Debate public-private deals before they’re set in concrete
Written by Michael Lewis on August 20, 2014
Governments are signing more public-private partnerships, a healthy trend – that is, if deals serve a public interest and don’t crowd out pressing needs.
Last week we wrote about two such deals: Swire shut down the Eighth Street Metromover station to meld it into its vast Brickell City Centre, and the Miami Parking Authority is talking of building thousands of parking spaces for a Miami Worldcenter.
In the case of Brickell City Centre, developer Swire is paying to add a third level to the station and blending the stop into its project.
At Miami Worldcenter, which seeks tax increment financing, the city would build and run parking that a developer usually provides – as Swire is doing in Brickell.
The Swire link to Metromover is a done deal, though details are sketchy.
But the Miami Worldcenter parking remains a concept, which makes it timely to study just what the public – which government represents – should expect when it invests in a private project.
Before such a deal, we should debate whether the project serves a public interest, whether the public and government are getting adequate payback, whether money and resources the public side invests could be better used elsewhere, and whether the project is a community need or just a business venture.
Add one more question: Is government there merely to jumpstart a faltering project?
If both the community and the business entity need the project to succeed, that might create a win-win. But if the developer alone needs the win, why should the public sector be involved?
It’s hard to analyze public involvement in either of these massive projects, because neither has been publicly vetted. That’s a pattern here: such deals are hashed out in private and only unveiled when final approval is pending, far too late to debate the policy questions we’re raising.
A refreshing exception was the dealing between Miami International Airport and Odebrecht, the firm that was to have developed a mixed-use, 33-acre Airport City there. Negotiating talks were public and recorded for those who couldn’t be present. A political storm, not those open talks, caused the project to crash.
As we revealed last week, officials of multiple county and city bodies have been meeting privately with Miami Worldcenter to cut public-private deals at the long-awaited project. Since talks are closed, we have no idea what criteria officials are using to decide whether an accord would be appropriate.
But transparency in public-private deals is vital, a two-month-old report by the International City/County Managers Association finds.
The association, which is the think tank for the nation’s city and county administrators, examines the “inherent complexities” via a paper titled “Public-Private Partnerships: Tips for Success.”
Among the association’s concerns with such deals are the “sustainability of projects, the motives of partners, the investment of local resources, and partners’ influence in determining whom local government serves.”
Who is served is vital. Miami might be the nation’s fourth poorest big city. Should its resources be spent in major mixed-use projects for upper-income users or are bigger needs unmet elsewhere? On the other hand, would thousands of city-provided parking spaces create jobs for poorer residents? Should that be a top priority?
The association finds some such partnerships do indeed miss a community’s core mission and “they might even present a conflict with that core mission.”
“Addressing community needs is a powerful motivation for city and county administrators….,” the policy paper says. “Yet responding to community needs may not carry the same importance for a potential partner.”
Is that the case at Miami Worldcenter, or is the project central to the city’s future and therefore a priority?
That’s the type of question public debate should hash out well before the city engraves plans in a parking building’s concrete. Indeed, the policy paper suggests that details of such partnerships be aired in the press “from the outset.”
Of course, it’s easier to do everything behind closed doors. Public debate is messy. But then, so are open government and democracy. We should demand openness.
One point the policy paper misses is fairness in public-private deals. Even assuming a need, a $3 billion public investment in a Miami baseball stadium from which the public gets no money makes a mockery of “partnership.”
Before any public-private deal rumbles very far down the road it should be vetted in public to see if it meets criteria the respected management think tank carefully laid out – and then decide whether the public would get a good deal. The time to start is now.