Academic journal article Planning for Higher Education

P4: The Role of Planning in Successful Public-Private Partnerships (P3s): Adding That Critical P to Your Process

Academic journal article Planning for Higher Education

P4: The Role of Planning in Successful Public-Private Partnerships (P3s): Adding That Critical P to Your Process

Article excerpt

Before your institution decides to pursue a [P.sub.3], make sure you've considered the fourth P--Planning--and how the [P.sub.3] aligns (or doesn't) with your campus master plan.


PUBLIC-PRIVATE PARTNERSHIPS--in which public and private sector entities partner to deliver a service or facility for the use of the general public--are spreading in the United States and elsewhere as cash-strapped public entities seek investment funds from private sources. In a recent report, Moody's Investors Service (2016) noted that U.S. higher education entities are expanding their use of [P.sub.3s] beyond student housing to include other types of university facilities. However, university officials also warn that a [P.sub.3] approach is no "magic bullet." Careful upfront planning can be the difference between a successful project and disappointment.

Further, it is important not to let immediate challenges and opportunities cause one to lose sight of long-term obligations. Institutional real estate holdings and campus ecosystems are prized assets, ensuring the long-term welfare of students and the entire community for decades, even centuries, to come.

In this article, we underscore the importance of taking this long view and share lessons learned regarding finance, planning, and negotiation at institutions that have undergone a [P.sub.3] process. We also offer additional best practices regarding campus master planning to ensure a successful [P.sub.3] process while maintaining the campus's long-term integrity.

Challenged by tight finances and the need for new and renovated facilities, many higher education institutions are pursuing [P.sub.3s]. The stated benefits are numerous. Most fundamentally, institutions get needed facilities built while limiting the amount of new debt they take on. Financial risks and sometimes even management concerns can be shifted to the private sector.

Leadership quotes touting the benefits of the deals are common. "Every extra dollar we can generate or save is one less dollar from the students, their parents or Texas taxpayers," said Texas A&M University System chancellor John Sharp in 2015 as he announced a [P.sub.3] for student housing. "Besides the revenue it generates, the... project also puts the debt and the risk on the books of the private sector" (Texas A&M University 2015, [paragraph] 7).

Yet for every [P.sub.3] that comes to fruition, many do not. Even those that do come to fruition include compromises. That's because such deals are financially complex, last a long time, and involve a tricky set of trade-offs and benefits. Institutions often give up control over land or property management for decades. With student housing, they give up revenue streams. Institutions may have to budget differently, spend maintenance funds differently, and deal with management changes over the life of the contract. "Not a magic bullet." "Not free money." "Long term." These are some of the key phrases higher education officials have used in describing [P.sub.3s].

That's why we think [P.sub.3s] really should be called [P.sub.4s], with the fourth P for Planning. This involves planning beyond budgets and finances to account for institutional goals, land use, facility design, campus flow, campus feel, life-cycle cost, maintenance, and academic goals. More than once, as master planners and architects, we've seen a campus master plan--the road map for an institution's long-range development--get leapfrogged in the process of putting a [P.sub.3] in place. This often results in compromising the design integrity of the campus ecosystem and reduces the project's likelihood of success. Elements often compromised that affect the campus context include building siting, scale and proportion, style, material quality, and links between buildings and the campus landscape. Each new campus facility, a new student housing complex for instance, can impact the entire campus in terms of access to classrooms and study areas; student life and culture; vehicular, pedestrian, and bicycle traffic; energy use; and even drainage patterns. …

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