Public-private partnerships and the design firm

Posted by & filed under BDP Blog, Published Articles.

By Andrew D. Mendelson, FAIA, Chief Risk Management Officer, Berkley Design Professional

April 11, 2019

Adapted from an article authored by Suzanne H. Harness, J.D., AIA for Berkley Design Professional

Recognizing that traditional public funding will not always be available, governmental agencies are using innovative public-private partnership (P3) models to incentivize their private-sector partners to deliver much needed local projects. For many engineers, P3 is already a familiar method of project delivery for infrastructure such as roads, bridges, tunnels, and transit. Architects are now finding that local communities are also considering P3 for other types of building projects, including athletic facilities, museums, convention centers, parking garages, courthouses, libraries, and affordable housing.

Simply stated, a P3 exists when a public entity retains a private entity to finance, design, and build a project that will deliver a benefit to the public. Often, the P3 consortium will be responsible for maintenance and operations over an extended period of time, up to 30 years. One thing is certain: private entities—and their investors and lenders—will only support P3 projects when they have confidence that the revenue stream will deliver an acceptable return on investment. The developer is then under tremendous pressure to deliver the promised financial return to investors.

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