Public-Private Partnerships and Implementation

Most major community and economic development efforts require public-private partnerships to overcome land assembly, site remediation, nascent market, infrastructure and construction cost issues. SB Friedman is a leader in establishing public-private development partnerships and structuring and right-sizing public-private finance transactions for development, redevelopment and infrastructure projects. We help clients create the shared vision crucial to success, recruit development partners, structure transactions, and support the financing process.

SB Friedman routinely works with such major tools as tax increment financing (TIF) and New Markets Tax Credits as well as special taxing districts to provide resources for projects that would otherwise not be able to proceed. These include multi-use developments, community facilities, industrial expansions, retail centers in underserved areas, affordable housing, and historic properties. Importantly, the firm often works on the public side of these transactions, helping establish a fair and appropriate structure in the public interest. SB Friedman is a registered Municipal Advisor able to advise in the inclusion of public securities (bonds, notes) in complex multi-layered transactions. In the past 12 years, the firm has played a significant advisory or analytical role in $2.3 billion of public funds in over $7.3 billion of transactions.

Services

Many states can create and/or enable the creation of special taxing districts in limited geographic areas to support development goals. We advise communities on the establishment of these districts and incorporate such considerations as boundary definition and eligibility, competitive considerations (when the district includes an increase in tax rate), and fiscal implications for other taxing bodies. We also help formulate plans to guide the use of these districts and support community outreach and education regarding these special districts.

New Markets Tax Credits (NMTCs) are a flexible financing tool used to support commercial, industrial and nonprofit-sponsored development projects and operating businesses in economically distressed areas. In aggregate, NMTCs can generally be used to raise additional capital for a project equal to roughly 20-25% of total project costs.

Governmental entities often struggle with the question of how much financial assistance to provide to development projects, especially where there is little local precedent for evaluating developer requests. SB Friedman is noted for our rigorous “but for” or “gap analysis” approach to underwriting and sizing public assistance. Through our analysis, we identify the key project/site characteristics that are challenging the financial feasibility of the project – whether extraordinary site costs, challenges related to infill development, achievable rents or other factors.

We support our clients’ efforts to obtain incentives and development entitlements from governmental entities. Our services include: identification of potential funding sources, preparation of applications to governmental entities; negotiation of assistance; tax, fiscal and economic impact estimates and cost-benefit studies; and market and financial feasibility studies. We have extensive experience with such tools as Tax Increment Financing (TIF) and New Markets Tax Credits.

As the state and federal share of funding for transportation projects continues to diminish, there is an increasing need for innovative financing techniques such as value capture for transportation projects. Value capture financing is one way to generate upfront local funding by capturing a portion of the real property value increases that would be generated by transportation improvements.

Finding the right development partner is critical for a land owner seeking to get the highest-quality development, provide for land stewardship, and achieve goals, in addition to negotiating a good price. The firm has extensive experience in recruiting developers on behalf of public, corporate and not-for-profit land owners. Our approach adds value to the property by creating a “believable fiction” as to its potential development, sometimes seeking new entitlements, and then marketing the site.

Public-private development transactions require careful analysis and structuring in order to give all parties the best chance for success. We are experienced in analyzing the risks and benefits in these arrangements, and assisting our clients in striking a fair balance in how they are allocated.

In support of bond offerings, bond refundings and other financing mechanisms (e.g., TIFIA loans), SB Friedman prepares detailed annual tax increment/sales tax/project-related revenue projections over the life of a special district or anticipated financing term.