1. Stretching the limits of p3, Non-traditional applications ARTBA’s 28th Annual P3s in Transportation Conference
Alexandra J. Lauzon
July 15, 2016

2. Key Policy Questions
The key policy questions facing state agencies and localities are similar across different infrastructure needs and sectors.
How do we respond to growing needs of infrastructure – renewal, repair, development, construction?
What is the optimal level of public sector spending on infrastructure?
What is the relative importance of private sector investment in infrastructure?
Are taxes and tax-exempt bonds as prime financing mechanisms adequate?
Are new roles required for different levels of government?

3. The P3 Delivery Method is a Tool
State agencies and localities can consider the P3 delivery method as a tool when tackling key policy questions.
Supplement traditional funding and project delivery methods
Deliver projects quicker, especially when public entities have limits on traditional funding sources (tax revenue or bond programs)
Include lifecycle costs in the P3 scope (operations and maintenance)
Share and transfer risk with a private partner
Attract private financing to supplement public funding
Bring private sector innovation and financial discipline to the project

4. Successful P3 Projects are Alike
Champion the project and process
Sustain political support through broad stakeholder outreach and education
Highly Motivated Government Sponsor
Clearly defined public and private roles and responsibilities
Broadly available through a process that balances transparency and efficiency
Appropriate Project Agreement
Reflecting broad consensus on need and objectives
Clearly Defined, High Priority Project
Successful P3
Certainty of completion driven by broad public and political awareness and support
Project Predictability
Advance preparation including key public and private stakeholders
Clear decision-making roles and timetables, communicated to key stakeholders
Transparent scoring and selection of winning team
Clearly Defined, Fair Process
Policymakers’ commit predictable revenues
Public understands value received in return for user fees or availability payments
Economically Viable

5. VAP3’s Role in Virginia’s P3 Projects
Identify and screen potential P3 projects and concepts within the P3 Pipeline
Act as a resource to agencies and localities interested in a potential P3 project - champion, catalyst, and guide
Facilitate the development of P3 projects - pragmatic and collaborative project managers
Develop consistent and fair P3 procurement and project development processes – guidelines facilitate closure
Evaluate the P3 project technical and financial feasibility - focus on best value and public benefits
Educate and communicate the role of P3’s in program and project development - steady flows of information

6. VAP3’s P3 Project Delivery Framework

7. Solar Energy Development Project
VAP3 is working in collaboration with the Virginia Department of Mines, Minerals, and Energy (DMME)
The project purpose is to:
advance the Governor’s renewable energy goals
identifying opportunities to optimize the use of state-owned assets
diversify Virginia’s energy mix by developing solar energy systems
Current focus is on distributed sites (< 2 MW) where the solar power is consumed by state facilities on site
The Project is progressing in multiple phases:
“Early adopters” - three solar systems for different state agencies bundled together
“Second Generation” - larger number of systems combined into bundle packages

8. Solar Energy Development Project
P3 delivery method
Private partner designs, builds, finances, operates and maintains the solar energy systems
Federal incentives include
Investment Tax Credit for 30% of the total capital cost of solar energy systems
Modified Accelerated Cost-Recovery System accelerating system depreciation over a five-year period
Private partner could take advantage of incentives in its financing structure
DMME Clean Energy Development and Services Program
Repurposed of U.S. Department of Energy American Recovery and Reinvestment Act State Energy Program funding
May be used as public subsidy to offset the cost of the project and ensure the agencies pay no more than what they currently pay for electricity

9. Commerce Road Corridor Redevelopment Project
Joint effort to restore economic vitality to the corridor – Port of Virginia, City of Richmond and VAP3
Capitalize on the Port of Virginia’s 40-year lease with the City of Richmond
Leverage the benefits of the Richmond Marine Terminal
Identify potential redevelopment strategies that effectively leverage public resources to attract private investment

10. Commerce Road Corridor Redevelopment Project
Utilize the P3 Project Delivery Framework to evaluate the project opportunity and develop a roadmap for project development
Facilitate communication and collaboration with the key stakeholders
Coordinate with potential public and private partners to better understand the project potential
Detail-Level Screening executed by the Port of Virginia on July 8, 2016
Currently, the project is transitioning into development and moving forward with the two key recommendations in the Detail-Level Screening Report:
Formally assembling the Project Team and governance structure; and then
Taking the steps necessary to advance through the development process

11. Air Rights Project
VAP3 is working in collaboration with VDOT and Arlington County
The project purpose is to explore ways to maximize value of existing public assets by making selected Air Rights over I-66 available for development in and around transportation facilities
Values generated in the form of revenues or benefits could be in the range of $15 to $25 million per site.
Jackie Cromwell

12. VDOT Cell Tower Project
Rapid changes underway in telecom, growth in demand for data, and non-traditional players are driving changes in cell tower industry
The project purpose is to:
Capitalize on the opportunity presented by the rapid changes in the telecom industry
Grow the VDOT cell tower program to boost revenue from non- core assets
Harness private sector market understanding for locating, operating and maintaining cell towers
VDOT, with VAP3 assistance, is currently developing an RFI:
The intent is to initiate engagement with private sector to clarify opportunities ahead and suggest changes needed to attract investment, share risks, and increase revenue

13. Current Pipeline of P3 Projects
Candidate P3 Projects:
Hampton Roads Crossing Improvements
Route 460 / 58 Connector
Interstate Lighting
Advertising / Sponsorship Opportunities
New DMV Customer Service Facilities
Toll Credit Program
Regional Airport runway maintenance
Conceptual P3 Projects:
Existing Park Facilities enhancements
New Park & Ride Facilities
Rest Area Truck Enhancements
Biofuel energy development
Availability Payment concept
Crowdfunding concept
Design-Build Finance concept
Broadband within Right of Way

14. Virginia Office of Public-Private Partnerships
THANK YOU
Virginia Office of Public-Private Partnerships
Alexandra J. Lauzon, Deputy Project Manager
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