Public Private Partnership Infrastructure Funding

Municipal / Government Facilities Funding:

100% funding for educational, correctional and public services facilities such as city halls and sporting arenas, as well as waste water plants, transportation [ports, rails, roads, bridges and airports], hospitals and long term care facilities.

From $10 Million to more than $750 Million and more in some cases.

Our program provides all professional and financial resources needed to:

Acquire existing infrastructure/facilities. Expand, renovate and or improve existing infrastructure/facilities. Develop green field infrastructure and real estate facilities.

Eliminates the need for debt/bond financing, letters of credit and bond insurance.
Removing the requirement for equity and out of pocket upfront investment.
Bypassing the need for time consuming referendum votes or Congressional appropriations.
No debt service reserves associated with bond financing.
No debt or bond covenants.
Greater flexibility and customized lease payment terms.
Capital available in as little as 90 days from application and approval.
Removing limitations on the amount of financing available from bond capacity.
Eliminating concerns related to long-term capital market and interest rate fluctuations.

The private sector investor assumes the financial liability of the project costs and the government agency retains freedom and full control over the asset just as would occur in ownership. The only requirement and obligation of the municipality is a lease for real estate assets or an annual contract payment for non-real estate assets. These payments can be considered part of the operating budget instead of long-term liability/debt in most cases, if properly structured.

This method allows a contractor to build the project for the government without the government having to spend any of their money in advance. Associated costs can include architect fees, engineering fees, and consultant costs, all of which can be combined into the overall lease and amortized over an extended period of time as opposed to being upfront.

For decades, government agencies have been misinformed as to the future value of public sector assets. Most believe that these assets appreciate in value over time, just as commercial properties do.

However, this is a grave mistake and a false truth! The majority of public assets actually depreciate in value as opposed to appreciating. Ultimately at the end of the asset’s economic life most become liabilities rather than assets to the municipality.

This is likely one of the main reasons the U.S. Federal Government leases over 7,100 properties and assets as opposed to owning.

If ownership is still desired, the transaction can be structured to allow asset ownership to revert back to the municipality upon lease maturity.

Sample project types:

Administration or Municipal Buildings; courthouses, correctional facilities, city halls, community centers, etc.
Convention Centers or Tourism Related Developments
Sporting Venues / Stadiums
Hospitals and Healthcare Facilities (profit and non-profit)
Economic Development Focused Initiatives that involve real estate or other asset development needs
Airports and Public Transportation
Infrastructure, Public Works and Utilities; energy, water, sewer etc.
Public Housing
Universities and K-12

Using the Public Private Investment model more and more municipalities and government agencies are monetizing assets in sale-leaseback transactions to raise critically needed capital while retaining control over core assets.
 
In a sale-leaseback, the government sells the asset to a private investor for a lump sum price and in most cases is equal to Fair Market Value. Then the agency leases the asset back from the investor for 15 to 30 years. At lease maturity the asset may revert back to the government agency.
 
This is an effective way of raising substantial amounts of inexpensive capital without incurring additional debt or reducing services to the community.

Historically, municipalities and government agencies have relied upon bond financing to construct government buildings and to fund infrastructure projects. Deteriorating economic conditions, voter discontent and other issues have often stalled proposed projects.
 
We can provide flexible and efficient Turn-Key Public Private Partnership based financial alternatives enabling projects to proceed via credit-backed and lease structures on a timely and cost-effective basis.
 
Public Private Partnership Infrastructure Funding Transaction Profile:

Project Sponsor: Cities, counties, states, large corporations and all public agencies
Lease or Service Contract Terms: 10 - 30 years
Types of Real Estate Leases: NNN or Bonded, non-appropriation clauses acceptable (case by case).
Locations: Worldwide [some exceptions apply]
Size: $10 million to $750 million+

Public Private Partnership Infrastructure Funding Transaction Process:

LETTER OF INTENT or LETTER OF INTEREST (3-10 DAYS)
Submittal of basic project information. Following review, representatives might schedule an initial due diligence call to determine preliminary level of interest. This phase culminates with a Letter of Intent (LOI).

CONDITIONAL INVESTMENT LETTER (15-30 DAYS) Personal meetings and site visits are conducted. During this second level due diligence, project specific information, capital structure, costs, expenses and investment metrics are evaluated. Should the project meet investment criteria, a Conditional Offer Letter will be issued stipulating basic terms and conditions of project funding. If acceptable to the client, the Letter is to be returned within the required time frame along with any required expense deposits.

FORMAL COMMITMENT LETTER (30-60 DAYS)
Upon acceptance of the Conditional Offer Letter, the client will receive a comprehensive final due diligence checklist. Two complete sets of information will be required including all third party reports. Once final due diligence and underwriting is complete, a Committee Report and subsequent recommendation will be prepared and presented to the Investment Committee for approval to issue a Formal Commitment Letter.
FUNDING/CLOSING (15-30 DAYS)

Upon receipt of an executed formal commitment letter, a Master Closing Agenda, outlining all legal requirements for closing, will be issued. Documentation will be prepared and reviewed by respective counsel. A Closing Notice will be issued by counsel and closing/funding shall occur per the closing notice.