Public Private Sector Partnerships Perspective from dealing with municipalities and institutions (e.g., Colleges/Universities) Do they always have to involve all 4 major elements? Perspective from dealing with municipalities and institutions (e.g., Colleges/Universities) Do they always have to involve all 4 major elements?  Build  Design  Finance  Operate Are they for everyone? Are they for everyone? Are they always Government, Institutional and Private? Are they always Government, Institutional and Private?

City of London – Public City of London – Public  Ellis Don Contractors (Build)  Global Spectrum (Operators)  BBB Architects (Design) Financing: Total Capital Cost $47 million Financing: Total Capital Cost $47 million  City of London, Province/Federal, Private Sector Equity/Debt 9000 seats 9000 seats  Home of OHL London Knights  Total # of Event Days 130 (concerts, community events, other sporting events) London Sports & Entertainment John Labatt Centre

Benefits to the City Benefits to the City  One of the key elements of Downtown Revitalization  Single entity to build, design and operate facility London Sports & Entertainment John Labatt Centre

Reasons for Success Reasons for Success  City Clear on Objectives  City undertook necessary background studies  REALISTIC EXPECTATIONS  Strong Advocate / City Hall  Experienced Private Sector team with proven track record in design, construction and operations  City willing to take on some of the operating risk together with Private Sector team  City able to independently confirm capital costs represented fair value London Sports & Entertainment John Labatt Centre

Student Community Colleges Seneca College, Niagara College, Sheridan College, Algonquin College Seneca College, Niagara College, Sheridan College, Algonquin College  New concept for Colleges to provide residential student accommodation on campus  Consistent with mandate to provide Specialization of Programs

Seneca College, Niagara College, Sheridan College, Algonquin College Seneca College, Niagara College, Sheridan College, Algonquin College  Successful Model Developed Over Time  Original Design / Build / Finance / Operate Model didn’t work  Realty Tax, Development Charge and Municipal Approvals Consideration did not permit simple model of selling/long term leasing of land to private sector proponent to be economically viable Student Community Colleges (cont’d)

Generalized Model Generalized Model  Design / Build Consortium (Architect / Contractor)  Design / Build - Fixed Fee / Partnering with Experienced Operator  College arranged their own financing College arranged their own financing

Student Community Colleges (cont’d) Benefits to Colleges Benefits to Colleges  Received turnkey student residences at competitive price  Allowed them to provide student accommodation previously not available  Management of student residences provided by experienced outside operator who was also able to realize third party revenues

Student Community Colleges (cont’d) Reasons for Success Reasons for Success  Colleges able to finance cheaper by their own sources 50 to 100 B.P.S. less that lenders to the private sector consortium  Colleges did necessary background to clearly understand the market potential and price points student willing to spend for accommodation  REALISTIC EXPECTATIONS

Student Community Colleges (cont’d) Reasons for Success Reasons for Success  Design / Build teams able to work effectively to produce desirable economic and fair market price  Operator proven record of managing similar facilities and ability to attract third party revenue that College probably not able to attract at least in the short to mid-term  College able to independently confirm capital costs represents fair value

Development Charges Are they a Public Private Sector Partnership? Development Charges Act allows municipalities to recover growth costs from developers Development Charges Act allows municipalities to recover growth costs from developers Development Charges 1997, Bill 98: “An Act to promote job creation and increased municipal accountability while providing for the recovery of development costs related to new growth” Development Charges 1997, Bill 98: “An Act to promote job creation and increased municipal accountability while providing for the recovery of development costs related to new growth”

Development Charges (cont’d) Act benefits both municipalities and developers and ultimately the end users of the new development by providing for timely installation of needed services Act benefits both municipalities and developers and ultimately the end users of the new development by providing for timely installation of needed services  Hard Costs include: - Water - Sewer - Roads  Soft Services include (only 90% of these growth related costs are DC eligible): - Transit - Libraries - Parkland Improvement - Indoor Recreational Facilities

 Certain facilities currently excluded: - City Halls - Tourism Facilities / Convention Centres - Cultural Centre (e.g., theatres, art galleries) - Hospitals  Interest Cost i.e., interim financing cost to provide these facilities in advance of development (revenue) – an eligible expense  In this sense, Development Charges represent Finance portion of PPP Development Charges (cont’d)

 In addition, DC contemplates front-end financing / services in lieu provided by developer. This represents Build and in many cases, Design elements of PPP. - Costs generally subject to independent verification or competitive bids through tender process.  Several municipalities in addition to DC Act eligible costs have been successful in negotiation of: - Payments for Non-DC eligible services, e.g. performing arts centre, hospitals, 10% soft service mandatory discount - Cash Flow Assistance (Repayable Loan Payments) in addition to Front End Financing Requirements for Certain Facilities

Development Charges (cont’d)  Developers agreed to these as conditions of obtaining municipal approval and allowing their development to accelerate in the planning and servicing process  Benefits to the Municipality - DC part of the way business is done - Extended DC regime provides in some cases monies not otherwise available and source of funding / financing not otherwise available

Development Charges (cont’d)  Reason for Success - Long history of lot levy / DC regimes - Municipality undertakes necessary background studies  REALISTIC EXPECTATIONS - Developers keen to get their projects to the market

CONCLUSIONS Not for everyone Not for everyone Need: Need:  Willingness (benefits) of both parties  Strong advocates on both sides  Understanding that PPP are not a panacea  REALISTIC EXPECTATIONS  In certain cases adopt only really beneficial elements of PPP  Risks / Rewards to both parties  Ability to independent confirm fair market prices for buildings provided