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P3 Project Structuring Guidelines for Local Governments: The District of Columbia P3 Program—A Case Example

TitleP3 Project Structuring Guidelines for Local Governments: The District of Columbia P3 Program—A Case Example
Publication TypeCase
Year of Publication2018
AuthorsBennon, M, Kim, J
Keywordsliving cities, p3, Working Paper

This study was completed as part of the Living Cities and Citi Foundation City Accelerator initiative and with the support of the City of Washington, D.C. (“the District”), one of the four cities selected for the Infrastructure Finance Cohort. The District’s Office of Public-Private Partnerships (OP3) is charged with identifying private sector partnerships to finance its critical infrastructure. This study is intended to support OP3 in developing practical guidelines to help structure and use public-private partnerships (P3) for infrastructure delivery. As one of few dedicated municipal P3 offices in the United States, OP3 will serve as a model for other cities across the country. The guidelines developed in this study will likewise serve as a useful tool for OP3 and other cities as they explore using P3s to meet their municipal infrastructure needs.

Compared to their federal and state counterparts, cities face unique challenges when implementing P3 projects. Many cities today are constrained financially not only due to their limited taxing authority but also from several recent trends that have had compounding effects on municipal finances—the diminishing role of the federal government in infrastructure funding, skyrocketing legacy mandates, increasing volatility in tax revenues, and aging populations with increasing needs for social programs and entitlements. Cities are also limited in their internal capacity to manage complex procurements such as P3s for major infrastructure projects. Their infrastructure assets are diverse—schools, city halls, police stations, detention centers, health clinics, water and waste treatment plants, lamp posts, fiber optics cables—and coordinating an integrated strategy across multiple agencies is a significant burden on already constrained administrative resources.

Yet these challenges also create a unique set of opportunities. The diversity of city assets offers more ways for the private sector to participate in infrastructure delivery and, as already proven outside the U.S., more ways for cities to innovate or to bundle multiple projects to gain efficiency and economies of scale. As demonstrated by the Long Beach Civic Center (LBCC) project, there are also ways for cities to leverage their existing assets, such as unused public property, to help defray the financial burden of projects and enhance their viability as P3s.

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