Arizona contractors, architects seeking state help in public-private partnerships

Posted By Mike Padgett

Jan. 28, 2009

PHOENIX, Ariz. – Although it’s a handsome source of federal dollars, the $825 billion federal economic stimulus proposal discussed earlier this month by hundreds of Arizona contractors, architects and city planners is beginning to resemble a package with too many strings attached.

That’s why the state’s construction and design industry is seeking help from the Arizona Legislature. The goal is public-private partnerships to construct public projects, such as highways, schools, airport expansions and water treatment plants. One new state proposal, Senate Bill 1261, is designed to allow the state and its counties and cities to enter partnerships with the private sector. Typically, such public-private partnerships involve using private money to finance buildings or other projects that are leased to public agencies.

“By teaming the public sector and private sector together, we can fund public sector needs,” says Gary Aller, director of the Alliance for Construction Excellence at Arizona State University.

Recent examples of public-private projects include Arizona State University’s student housing in downtown Phoenix and the Arizona Department of Administration and Arizona Department of Environmental Quality buildings.

Despite the short time in which to apply for and commit the federal dollars, America’s suburbs stand to gain, says Douglas McCoach, vice president of planning and urban design at RTKL Associates, an international design and architecture firm in Baltimore, Md.

McCoach applauded the efforts of the more than 400 Arizona contractors, architects and city planners who met for a half-day conference Jan. 8 at the Airport Marriott hotel to discuss how to apply for the federal aid.

“I was actually impressed by the initiative there (in Arizona) to get folks together in a forum,” McCoach says. “That’s a good move. You have to assume that every single state in the union, and territories as well, is trying to figure out how they can secure funds. And what would really be interesting would be to compare agendas between states.”

McCoach, after 23 years with RTKL, accepted an invitation two years ago to join the planning staff at the City of Baltimore. At the end of last summer, he returned to RTKL. In his column in Forbes magazine last month, McCoach, wrote that America’s “edge cities” – of which more than 20 surround the City of Phoenix – stand to gain much from federal spending for infrastructure improvements.

“The scale of Obama’s planned infrastructure projects is grand, and the cost will be high,” McCoach wrote. “The time is right for this federal funding to help local municipalities take advantage of this rising cultural momentum. As their budgets become increasingly strained under the struggling economy, local officials do not have the funds available to maintain their current transportation systems, much less undertake sweeping new projects.”

“Unless funding is made available,” McCoach continues, “mass transit in America’s suburban communities may actually suffer as a result. It would be scaled back – just when, culturally, we are finally ready to embrace mass transit in a suburban setting.”

The federal stimulus measure, called American Recovery and Reinvestment Plan, is the topic de tour in Washington D.C. The goal is passage of an economic bill by mid-February. However, the spending and tax-cut proposal from President Barack Obama and Democrats is facing stiff opposition from Republicans, and the current guidelines could make it difficult to qualify for the proposal’s public works dollars, Aller says.

“I have been following the changes to the stimulus package and have become somewhat discouraged,” Aller says.

Changes to the $825 billion federal proposal have reduced the infrastructure component to about $149 billion. Under the current rules, Aller says the proposal requires applicants for the federal money “to be under contract within 120 days from the date the funds become available.” That can be insufficient time for state, county or city agencies to discuss whether to apply for the money, invite public comment and then invite and review bids from contractors.

“That (restricted time process) requires us to apply the dollars to existing projects which means we will have no real opportunity to leverage this money,” Aller says. “If we cannot leverage what little we get, it will be a flash in the pan.”

About 60 percent of the federal proposal is planned for new spending on education, Medicaid costs, increases in unemployment benefits, and expanding and repairing the nation’s infrastructure, including streets, highways, airports and utility systems. The remainder of the package, nearly 40 percent, consists of tax decreases.

Aller says the federal proposal is only one of several measures needed to end the current recession.

“We need to rally our great minds to find creative ways to grow, and we must grow,” he says. “We need to find ways to use every dollar to its best ‘leveraged’ advantage. We need a plan, a road map, to tomorrow – invest here for growth, cut there to fix the budget and borrow to fill in the gap. It seems all we are doing is cutting and expecting that to solve the problem.”

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Jan 28th, 2009

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