Leveraging Public Private Partnerships for Real Estate Development: - PowerPoint PPT Presentation

Presenting a live 90 ‐ minute webinar with interactive Q&A Leveraging Public ‐ Private Partnerships for Real Estate Development: Beyond Bridges and Roads E D l B d B id d R d Identifying New Project Opportunities, Structuring Deals, Navigating the Procurement Process and Financing THURS DAY, AUGUS T 15, 2013 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific T d Today’s faculty features: ’ f l f Guy Maisnik, Partner, Jeffer Mangels Butler & Mitchell , Los Angeles Larry Kosmont, President and CEO, Kosmont Companies , Los Angeles S S heri Bonstelle, Partner, Jeffer Mangels Butler & Mitchell , Los Angeles heri Bonstelle, Partner, Jeffer Mangels Butler & Mitchell , Los Angeles David Cincotta, Of Counsel, Jeffer Mangels Butler & Mitchell , S an Francisco The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .

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Leveraging Public-Private Partnerships Leveraging Public Private Partnerships for Real Estate Development Presented by: Larry Kosmont David Cincotta Jeffer Mangels Butler & Mitchell Kosmont Companies Sheri Bonstelle Guy Maisnik Jeffer Mangels Butler & Mitchell Jeffer Mangels Butler & Mitchell Jeffer Mangels Butler & Mitchell Jeffer Mangels Butler & Mitchell

Introduction Introduction Larry Kosmont, Kosmont Companies • Sheri Bonstelle, JMBM – Government/Land Use (LA) • David Cincotta JMBM – Government/Land Use (SF) David Cincotta, JMBM – Government/Land Use (SF) • • Guy Maisnik, JMBM – Real Estate (LA) • 6

Description of Existing Climate in 2013 Description of Existing Climate in 2013 • Description of Existing Market in General • Description of Existing Market in General • Description of CA post-Redevelopment - RDA Property Disposition - Local budgets, damaged government credit - Prop 30 revenues to balance State budget (temporary) - AB93 replaces Enterprise Zones AB93 l E i Z - Low bond rating to fund development (Fitch GO bonds) - 35-year history or reducing development funding (Prop 13, Prop 62, 35 year history or reducing development funding (Prop 13, Prop 62, Prop 218, eliminate RDA+TIFs) and increase in State, City and County taxes 7

Public-Private Financing Provides Mutual Benefits Public Private Financing Provides Mutual Benefits Public Entity provides: y p • Land • Public Funds • Low er Cost Financing • Project Incentives (density bonus) • Project Incentives (density bonus) Private Developer/Owner/Tenant provides: P i t D l /O /T t id • Development expertise • Preferred Tenants/Uses • Private financing Private financing • Assumption of risk The outcome for cities is job and tax revenue growth P3 D P3 Deals = Economic Development l E i D l t 8

Navigating the Process: Navigating the Process: g g g g Toolbox for Toolbox for Economic Development Economic Development 9

Real Estate and Property Real Estate and Property Public Owned Real Estate Types Former RDA real estate • Civic/Government Use real estate (civic centers, fire stations, • recreation) Surplus Property (City, School District, Utility, other) • Rights of Way / Streets / Alleys Rights of Way / Streets / Alleys • Parking Lots / Structures • 10

Real Estate and Property Real Estate and Property How Public Land is Valuable Resource 1. Land lends value to ED projects: • High commuting costs and transit lines have increased the “location value” of in-fill sites (e.g. parking lots, city / utility yards) ( g g y y y ) • “Owned” land values can be propped up by zoning/use actions that add value (density, reduced parking, hours of operation, height, other) • Utility hook-up and location valued by the private sector & end users y p y p • Potential to increase value & property taxes (stable revenue source) • Equity and/or lease revenue can be borrowed against 2. Many public agency owned properties are under-utilized but need work to facilitate marketability or reuse • Existing zoning may not support highest & best use g g y pp g • Often needs work (entitlements, assemblage, env. remediation) 11

Districts and Special Purpose Financing Authorities Districts and Special Purpose Financing Authorities Description of Districts Business Improvement Districts (PBIDs) • Special purpose non-profit that performs variety of services to improve image of an area & promote a business district often to supplement city services • Assessment on parcels/businesses Assessment on parcels/businesses • Managed by payors – usually a private non-profit corporation • Oversight by local government • Formed under two state laws – 1989 Act and 1994 Act • Voted by property owners by adopted by resolution of City or County Voted by property owners by adopted by resolution of City or County • Examples Downtown Center BID, Gateway to LA BID Tourism Improvement Districts (TIDs) – “Hotel Districts” • Funds raised through an increase in the TOT which is used to provide tourism Funds raised through an increase in the TOT which is used to provide tourism related services and programs in the district. • Approved by hotel operators • Local Government oversight 12

Districts and Special Purpose Financing Authorities Districts and Special Purpose Financing Authorities Description of Districts Parking Authorities • Commission-led local government entity (law enacted in 1949) • Manages parking operations and revenue citywide • May be used to acquire property and fund new parking facilities May be used to acquire property and fund new parking facilities • Landlord for parking leases and concession agreements • Established in 1990 to finance public works in suburban areas Infrastructure Financing Districts – A “D.O.A.” District • Established in 1990 to finance public works in suburban areas • Uses Tax-Increment Financing • Requires public vote for district formation and bond issuance Requires public vote for district formation and bond issuance • Cannot be used in prior RDA areas • Has only been used twice (Legoland and Rincon Hill in SF) 13

Districts and Special Purpose Financing Authorities Districts and Special Purpose Financing Authorities Description of Districts Community Facilities Districts (Mello Roos) • Special district legislation established in 1982 to help local gov’t finance needed community facilities and services through the levy of voter approved special taxes • Services: Services: • Police, fire protection / Improvement maintenance • Flood protection / Hazardous material removal New Types of Districts in California New Types of Districts in California Restaurant Improvement Districts • Assessment often based on number of employees • City of Newport Beach Wine Promotion Districts Wine Promotion Districts • Currently being investigated by several communities • Assessment based on tasting room sales • Funding for promotional activities to increase number of visitors and to attract new wineries to the area attract new wineries to the area • Napa and Temecula currently in process 14