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IV. Obstacles to Public/Private Partnerships

"It still holds true that man is most uniquely human when he turns obstacles into opportunities." - Eric Hoffer (1902-1983), U.S. Philosopher. Reflections on the Human Condition

Typical barriers to successful PPPs include building consensus, overcoming financial and institutional obstacles, and negotiating differences in culture. During panel presentations, Sheila Lynch (Northeast Advanced Vehicle Consortium [NAVC]), David Fairman (Consensus Building Institute), Michael Filipiak (MHF Associates), and David Glater (Volpe Center) shed different perspectives on these matters.

Financing, Governance, and Legal Barriers

Lynch, as moderator and presenter of the successful NAVC partnerships, offered several recommendations to ensure that fiduciary interests of the public sector are maintained in dealings with companies operating with dissimilar motivations. Suggesting a streamlined approach to launching and financing PPPs, Lynch became the first of several panelists to recommend the use of "other transactions," an innovative finance technique that relaxes the FAR procedures (see Box 3).

Glater’s discussion of partnering relationships and ethical considerations, Fairman’s presentation on consensus building, and Filipiak’s talk on profit needs of private firms, all emphasized the need for due diligence and issue resolution prior to project initiation. Many of these same points were later echoed by David Forsberg (Worcester Business Development Corporation); in particular, emphasizing the critical importance of developing a PPP master plan.

Lessons Learned from 10 Years of Public/Private Partnerships: NAVC

"What defines a
success may not be
what you originally
set out to do."

Sheila Lynch, Executive Director of the NAVC, a 501C3 non-profit organization, has a 10-year record in fostering PPPs. An association of private and public sector firms and agencies working together to promote advanced vehicle technologies in the Northeast, the NAVC is the principal multi-state, nonprofit funding mechanism for advanced transportation research, technology development, and demonstration in the region. It funds projects and studies with private industry that foster the advancement of clean fueled vehicle technology in the Northeast. The six New England Governors, the Governors of New York and New Jersey, and the Mayor of New York City appoint the NAVC Board of Directors. Each appointment consists of one private participant and one public participant.

Box 3
Other Transactions" Authority with the Department of Transportation

The TEA-21 conferred limited "other transactions" authority to DOT. Other Transactions (OT) are streamlined procedures exempt from traditional procurement and grant laws and regulations (not contracts, grants or cooperative agreements). OT policy is applicable only to actions authorized under TEA-21, and falls under the grant-related category. Unlike other agencies such the Department of Defense (DOD), the DOT does not presently have procurement related OT authority.

"Other transactions" are contractual mechanisms not subject to the statutes and regulations specifically applicable to Federal procurement or grants programs. Programs with OT authority need not use traditional grant provisions or FAR clauses; the parties are free to negotiate mutually agreeable provisions. Principles regarding the use of OT within DOT include:

  • A tool to encourage entities to participate in DOT programs that would not otherwise participate because of issues such as patent rights or cost accounting standards.
  • Not eliminating the applicability of all laws and regulations; therefore, legal counsel should be consulted when an OT agreement will be used.
  • DOT Operating Administrations (Oars) shall document the justification for selection of an OT agreement over other instruments, such as contracts, grants, or cooperative agreements.
  • Not eliminating the need for competition. Separate justification must be approved in accordance with OA procedures if competition is not obtained. Full and Open Competition standard in the Competition in Contracting Act does not apply to OT, and competition does not necessarily mean a formal source selection process.
  • Provisions which provide for sufficient government program oversight to insure the proper expenditure of public funds.
  • Oars that must designate an Agreements Officer(s) who has the authority to bind the government and act as focal point for changes or modifications to OT agreements
  • Oars shall ensure that whoever executes an OT agreement has the authority to obligate funds on behalf of the government.
  • Obligations made through OT agreements that must be reported via the Grants Information System and coded as an "other" type of instrument.

NAVC’s mission is to strengthen the Northeast economy by creating skilled technology jobs, reduce the region’s serious air quality problems by promoting the use of clean-fuel vehicles, foster transportation technologies that are sustainable, and reduce U.S. dependence on foreign oil. Through NAVC, manufacturers, researchers, utilities, universities, government agencies, and environmental advocates are linked, sharing information and ideas and collaborating on projects. In 1999, NAVC and the DOT’s Advanced Vehicle Program (AVP) launched a partnership to spur development of cleaner, quieter and more fuel-efficient vehicles. Four new NAVC projects received funding through the AVP in FY 99.

Along with DOT, the NAVC also receives funding from and manages projects for the Advanced Technology Program (ATP) of the National Institute of Standards and Technology (NIST). It provides funds to private industry for projects and studies that foster the advancement of clean fueled vehicle technology in the Northeast. Thus far, the NAVC has funded 92 projects totaling $57 million, including private cost share. Among its partnerships projects, the NAVC, Lynch pointed to an innovative arrangement, funded by DOT and led by a Rhode Island boat builder, TPI Composites, Inc. (TPI), to build a 29-foot medium duty, lightweight low-cost hybrid electric bus.

Spectacle Island is one of dozens of small islands dotting Boston Harbor. Historically used as a dump, and later abandoned to natural forces, Spectacle Island has emerged as a focal point of the so-called "Big Dig" transportation project now ongoing in the city. Needing a place to put the millions of tons of dirt excavated from a new tunnel, the city selected Spectacle Island. Through a PPP that included the NAVC, the consortium simultaneously designed plans for the creation of a nature park once the digging and enlargement of the island came to completion. Spectacle will become a model park for the 21st century. A new marina, visitors center, and trails, will open during the summer of 2003. A grid-connected photovoltaic (PV) system will be in the visitors center. Other features include an electric tram, electric bikes, electric maintenance vehicles, and electric boat. The visitors center will house an educational exhibit on energy use.

Assessing the NAVC’s project portfolio, Lynch concedes that like many fledgling organizations, the Consortium has also learned lessons from the occasional failure. She recounted the NIST ATP partnership on Sunrise. Developed by the NAVC with support from the NIST ATP and the Defense Advanced Research Projects Agency (DARPA), the Sunrise was a full-featured, all-composite electric vehicle. The Sunrise was a low-cost, one-piece construction, light body/chassis weight, and crashworthy vehicle. Under an FAR contract, there was a 50/50 cost- share arrangement. An approved budget, however, was later rescinded. Triggering a 3-year series of detailed audits involving 10 companies, enormous amounts of effort expended on all sides ultimately sidetracked the project. Using this example to show the complexities and potential obstacles of the FAR procedures, Lynch recommended that participants instead consider "other transactions" as an alternative way to build PPPs. Summarizing her principal discussion points, Lynch advised:

  • Do not expect private companies to operate like a government agency,
  • Do not give away money without first obtaining a vested interest for success from a company,
  • Make it easy for companies to participate if you want product results, and
  • "Other transactions" are an excellent tool for PPPs.

Partnering Relationships and Legal Considerations

"…traditional [contracting]
relationships [are like] very
big ships. Private public
partnerships [are] a way to try to
turn those ships."

David Glater, Chief Counsel of the Volpe Center, introduced the concept of "partnering relationships." He reiterated Sheila Lynch’s recommendation on the benefits of "other transactions (OT)." Partnerships, argued Glater, are an overlay on existing transactions. Glater, noting the existence in DOD of integrated product teams (government and contractor personnel) spoke of other transactions as procurement transactions. Invented to get companies to agree to terms that they otherwise would not, the OT technique proceeds with essentially no competition.

Glater compared traditional relationships to very big ships. Private public partnerships, he said, were a way to try to turn those ships. With different values and different motivations, the risks of conflicts of interest are high when government and private sector staff work side by side. In a follow-up question, Steve Lockwood, agreeing that Glater had raised some "very tough issues," asked Glater if there was any concentrated research on these issues. "This Symposium is it," he responded, much to the edification of symposium participants.

A Legal Definition of Partnerships

Glater affirms that whatever is meant by transportation partnering, no one is using this term the way lawyers have traditionally used it. In legal terminology, a partnership refers to a participant in a multiparty legal relationship, one created to carry on a business where participants agree to share profits and losses and decision-making according to their partnership agreement.36 Of the current set of PPP definitions, Glater regards the concept as an overlay or spin on traditional financial grant/contractual relationships between the public and private sectors, intended to modify how these agreements are implemented. Glater asked, "is there more to partnering than a positive attitude and a team-building mindset?" He provided a few examples of partnering relationships; some of which are discussed elsewhere in this document.

Building Consensus for Transportation Partnerships: Activities of the Consensus Building Institute (CBI)

Building consensus amongst participants in PPPs is crucial to all aspects of their life cycles. Conventional means of dealing with disagreements, particularly in the public sector, are increasingly inadequate. At every level of government, officials have discovered that the "decide-announce-defend" model of the past is unacceptable. Many are looking for new ways to generate informed agreements or to resolve disputes when they arise. In recent years, researchers and practitioners have developed new tools for problem solving. These are the tools of consensus building.

Consensus building involves informal, face-to-face interaction among representatives of stakeholding groups. It aims for "mutual gain" solutions, rather than win-lose or lowest common denominator outcomes. It complements traditional decision-making activities of agencies, courts, and legislatures and generates solutions that are fairer, more efficient, better informed, and more stable than those arrived at by conventional means.

Introducing this important topic, David Fairman, Vice President of the CBI, provided an overview of the origins of consensus building activities in the United States.37 Fairman characterized the Progressive Era from 1900-1920 as one that produced reforms that created the regulatory state. The Progressives aimed to insulate government officials from interest group and political pressure by limiting and formalizing interaction between officials and citizens. In the 1930s-1950s, as Fairman put it, the country experienced growth in scale, complexity and impacts of government projects and policies. In response, citizens and interest groups began to demand greater participation in government decision making. Next, he pointed to the revolution in public participation and open government reforms that marked the 1950s-1970s period. The explosion of public interest litigation, and the growth of organized interest groups at every level of government, in turn spurred social experiments in project and policy consensus building beginning in the 1970s and continuing until the present.

The goals of public sector consensus building are multifaceted. It supports well-informed, transparent, and representative public decision-making. It resolves disagreements among stakeholders. It attempts to maximize joint gains (economic, environmental, social, and political), while minimizing the need for tradeoffs. Finally, it helps in rebuilding relationships and institutions. To ensure project success, Mr. Fairman believes that several factors are required: (a) key stakeholders willing to seek consensus, (b) legitimate convenor, (c) a qualified facilitator/mediator who is acceptable to all stakeholders must be available, and (d) the necessary resources must be available (time, information, technical assistance, and funding). In Fairman’s view, a number of "process steps" are necessary to maximize the chances of building consensus. These steps include:

  • Assess issues and stakeholders, and design a process,
  • Convene stakeholders,
  • Confirm goals, ground rules and work plan,
  • Conduct joint fact finding,
  • Develop and explore options on key issues,
  • Develop and ratify "package" agreement, and
  • Implement with joint monitoring.

Fairman views transportation partnerships as particularly amenable to the consensus building process. Why is this true? First, there are several legislative mandates – such as ISTEA, the Clean Air Act (CAA), and TEA-21 – as well as other transportation planning requirements – that mandate public consultation and participation in key areas of transportation planning. Second, the complexity of transportation policies and projects means that no one stakeholder group is likely to have all the information and expertise necessary to manage the intertwined issues, multiple stakeholders, information and analysis, and risk and uncertainty. He also noted that many transportation policy and project initiatives have been caught in political deadlock because key stakeholders and their issues were not directly involved in decision making.

Fairman pointed to three examples of transportation projects occurring in the past decade that have employed the techniques of consensus building. He further classified these by the focus of consensus building:

  • Policy: Oregon Highway Access Management: Negotiated Rulemaking,
  • Program: St. Louis Bridges to Work: Integrated Planning, and
  • Project: Boston Bridge Design Review Committee (BDRC): Project Design.

Describing how it used the services of a skilled facilitator, Fairman noted how Oregon had effectively managed a highly complex rulemaking process by engaging key stakeholders and scoping issues at an early stage of rule development. In St. Louis, the Bridges-to-Work program brought together stakeholders whose primary interest was welfare-to-work and whose background was in social services with stakeholders (including local and state transportation agencies) whose primary focus is public transit. Together, they designed an integrated transportation plan to increase access to jobs for low-income residents.

Finally, the BDRC reviewed a range of options for bridge and tunnel crossings of the Charles River. Fairman noted that the limited success of the BDRC process suggests two important caveats to the use of consensus building. First, if consensus building does not begin until after major design and engineering decisions have been made, it is far more difficult to invent options that may better satisfy transportation, environmental, and economic concerns than if the process begins early in the design phase. Second, when the government agency convening the process has very strong views on the "right answer" to the question, it may not be appropriate to frame the goal of the process as consensus. Consultation and dialogue may be more appropriate and achievable goals.

Views of a Venture Capitalist (VC) – the Profit Motive

"…everything I've
heard here today is
from a completely
different perspective
from what I normally
deal with."

Michael Filipiak, President of MHF Associates, is a VC who maintains a very practical and businesslike view of partnership projects that are candidates for VC funding. His brisk commentary provided the audience with a snapshot of one principal barrier to PPPs, the strong cultural differences between the public and private sectors. Remarking on project financing and the needs of the private sector, Filipiak told the audience that "everything I’ve heard here today is from a completely different perspective from what I normally deal with."

Driving the point across that his fundamental concerns are balance sheets, income statements, and cash flow, Filipiak affirmed that "the profit needs to be there" for him to be interested in providing funds. He needs a detailed business plan to know how a project will be funded and what will be accomplished. If convinced, he will provide working capital, and equipment and fixed asset financing. Noting his need to report to company shareholders, Filipiak spoke of the range of bottom-line issues aimed at increasing the value of shares held by investors. Commenting on the types of partnering relationships with which he operates, Filipiak emphasized that he reports to a different group of stakeholders – most being big stockholders in the company. He has to explain to shareholders why he did not make money.

Filipiak makes his pay based on incentives, stating candidly, "I eat what I kill." Although VCs recognize that investment payoffs have varying time horizons to expected profitability, Filipiak asserted that he must know what his ultimate rate of return is going to be even if profitability is a few years away. His only concern is "Can I make money out of it – either in the short-, medium-, or long-term?"

"I eat what I kill…I don't
care about innovative as
long as I can make
money. The name of the
game is making money -
Innovation is irrelevant."

He explained that VCs and banks are concerned foremost with the ability to pay. They want to see collateral assets. Banks do not want to hear about a "great idea." "Banks do not want to finance start-up companies, even 5 years [in business] doesn’t cut it." Why is there such a conservative attitude? Filipiak explains, "All planners plan for success. Nobody plans for failure."

Alluding to earlier comments made by Bob Knisely, Filipiak noted the 1400 programs in the Catalog of Domestic Federal Assistance, which Knisely had labeled as "not innovative." Filipiak retorted that "I don’t care about innovative as long as I can make money. The name of the game is making money – innovation is irrelevant."

Can Venture Capitalists Help Public/Private Partnerships?

Consistent with his stated needs to make a profit, Filipiak sees a role for VCs in transportation partnerships. However, he only wants to know: (a) How much is he [the VC] going to make? and (b) When will he make it? Sooner is better. In addition, a VC needs an exit strategy once it can recoup its original investment with a profitable rate of return. A VC might also consider a transportation partnership involving a corporate partner. The corporation may have R&D ability or some other resource that the VC does not have. "Sometimes it is necessary to look beyond one player – to look at many players to make the deal work." Filipiak recognizes that a PPP can work, but it must satisfy his needs. A prospective partnership needs "to give him that information or the deal is dead." In response to an audience question concerning how often a public sector entity comes in with a business plan, Filipiak stated simply, "not very often."

Filipiak likes the idea of credit enhancements to make a partnership more attractive as an investment. "Give me one of those 1400 [domestic assistance] programs," he declared. He suggested examples of credit programs that would help him, such as state credit enhancements, tax benefits, industrial revenue bonds, and rural development guarantees. Generalizing this concept, Filipiak concluded that "It could be anything that helps to make it profitable to purchase assets, and to make the contributions required to reap huge rewards down the line."

Dinner Speaker: David Forsberg

David Forsberg, President of the Worcester Business Development Corporation (WBDC) addressed listeners from his position as an experienced facilitator of PPPs in eastern Massachusetts. The WBDC is a nonprofit, public purpose, private development corporation.

Doing the Public Good: Partnerships, Economic Development, and Jobs Creation

An innovative and leading force in the economic development of the greater Worcester community, the WBDC seeks to stimulate job creation and growth in the tax base. To achieve these goals, the WBDC works in cooperation with other divisions of the city. Forsberg provided the audience with several examples of economic development projects, in order to demonstrate the types of partnership activities and issues in which his company becomes involved.

His talk unveiled several overarching themes, including the pervasive importance of transportation to economic development partnerships, and the critical need to structure a master plan for all partnerships. Stating that the WBDC prefers not to be the principal developer in a project, Forsberg identified that as a strategy that ties up too many resources. He did nonetheless, emphasize his agency’s focus on "relationship building," rather than abandoning stakeholders as the partnership proceeds. The WBDC holds their hand throughout the process as part of an overall exit strategy.

"…Our motto is, if the deal
sucks, see us. If projects were
easy, the market would do them.
They would be routine business
deals. The reality of life in
urban Northeast is that deals
can't occur in the traditional
way, hence the need for
partnerships."

WBDC’s operating philosophy, Forsberg states, identifies strongly with the partnership model. Characterizing his agency as economic development "do gooders," Forsberg described numerous opportunities for the WBDC to expand the Worcester economy. These included a Brownfields project, the Central Business District Project in coordination with CIGNA Healthcare and Mass College of Pharmacy, and the CenTech Technology Park Development Project. With CenTech, WBDC is now credited with successful development of an industrial park and the facilitation of pioneering work in the biotechnology field.

Colloquially describing the essence of WBDC, Forsberg quipped that "Our motto is, if the deal sucks, see us." It does raise, however, a serious point about partnerships. "If projects were easy, the market would do them. They would be routine business deals. The reality of life in urban Northeast is that deals can’t occur in the traditional way, hence the need for partnerships."

The Brownfields Initiative38

Forsberg’s talk repeatedly emphasized the value and outright necessity of forming partnerships to achieve the greater good. Saying "We can’t do it alone," his instinct is always to find a partner. In demonstrating these lessons, the Brownfields project stands as an excellent example of WBDC’s philosophy and implementation strategies.

Worcester Polytechnic Institute (WPI) and private developers are currently partnering with the WBDC on a major Brownfields initiative in the Prescott/Grove area of Worcester, reclaiming approximately 12 acres just north of the Central Business District. This Brownfields initiative is being driven privately utilizing the tools and incentives provided by the 1998 State Brownfields Act.39 The WBDC now owns the property and will clean up the area, and devise a Master Plan to develop a new gateway into downtown Worcester. Flagship Bank and MassDevelopment are providing the financing. With the objectives of site preparation and redevelopment leading to jobs creation, the long-range goal is a privately driven, mixed-use strategy that will transform the Prescott Street area into a gateway park, with commercial, manufacturing, and recreational activities.

The WBDC can find partners, even if they are private partners. In the Brownfields project, the private developer partner knows that his bottom line will be less than it would be on a routine project. Because he had larger investment in the area, however, the developer was willing to take a lower rate of return on this particular project. Forsberg counseled listeners, stating, "private development brings private edge – this is very important." The other partner, WPI, wants to be a good institutional citizen. At the end of the day, it will be a major end user in the district and intends to build a facility. Enlightened self-interest implies that WPI needs a footprint and that footprint has to be clean.

Central Business District Project

With the arrival in Worcester of the Massachusetts College of Pharmacy and Health Sciences (MCPHS), the WBDC has partnered with MCPHS to assist their entry into the city. MassDevelopment is also providing financing on this project. WBDC is working closely with the City of Worcester and their downtown agenda. It is preparing a Foster Street corridor study, which will be a blueprint for healthcare and education-related development around the College. MCPHS has also purchased the Graphic Arts Building, next to the college, and has retained the WBDC to lead a development strategy for the building that will include commercial space and student housing.

CenTech Park

Forsberg spoke at length about another WBDC-owned property, a 121-acre industrial park in the town of Grafton, referred to as the Greenfield Site. He sketched out four time stages for the project, saying the story unfolded as partnership succeeding, partnership interrupted, partnership reestablished, and partnership taking off. Offering a strong endorsement for the PPP model, Forsberg declared: "If ever there was a project that proved that PPPs are essential to pulling off economic development, it’s this project."

"If ever there was a
project that proved that
PPPs are essential to
pulling off economic
development. It's this
[CenTech] project."

Formerly owned by the Commonwealth of Massachusetts, the WBDC acquired the Greenfield site at relatively low cost, with the goal of turning it into a state-of-the-art technology and biotechnology park. The WBDC had earlier opened the Massachusetts Biotechnology Research Park in Worcester in 1987. The Biotech Park is one of the largest and most successful biotechnology parks in the world, with nearly one million square feet of developed space. The park continues to expand both its tenant base and its geographic boundaries. The WBDC is now moving beyond the Biotech Park to develop CenTech Park.

WBDC also formed a partnership with the Tufts University School of Veterinary Medicine, after the school had dropped its involvement from the original plan. The towns of Grafton and Shrewsbury work closely with WBDC. The 121-acre CenTech Park abuts the Tufts University School of Veterinary Medicine and is just a 10-minute drive from the Massachusetts Biotechnology Research Park, the University of Massachusetts Medical Center, and the Worcester Foundation for Biomedical Research. Surrounded by a dozen colleges and technology companies, CenTech is a beneficiary of a well-trained local work force. The nearby Massachusetts Biotechnology Research Institute sponsors training in bioprocessing. WPI offers programs in advanced materials and environmental engineering, two fields viewed as growth areas in the future of CenTech.

Recounting a critical deficiency early in the project, Forsberg pointed to the lack of an adequate master plan to guide the project. WBDC did its own master plan and decided to market the land on its own. As an inducement to expand the tax base in the local economy, the WBDC made the strategic decision to charge only $70,000/acre when local market conditions supported $90,000/acre. The key ingredient, Forsberg cited, were private parties who then stepped up and paid for this land.

"Transportation programs and
infrastructure are almost always
a critical and controlling
dimension of the project. When
project overseers fail to
understand this and fail to talk
with transportation people who
have the money and ability to
become a partner in the project,
they aren't doing their job."

To alleviate the situation, the WBDC recommended the use of a PPP. In addition to Tufts, three developers in the area also became partners. Another crucial element of success, according to Forsberg, was the important partnership his agency established with the Massachusetts Bay Transportation Authority (MBTA). The March 2000 opening of an MBTA commuter rail station at the park was a great boost to the effort and "changed the whole equation," said Forsberg. Thus, CenTech will be a key stop on a commuter rail that links Worcester and Boston, making Boston labor markets, customers, and suppliers more accessible to the Park. Reflecting on the origins of this rail stop, Forsberg jokingly suggested that WBDC’s first private partner was really the person who parked illegally on a vacant lot on the 121 acres site, in order to catch the commuter rail to Boston.

Transportation is Critical to Success

Forsberg has discovered that "Every time he does a project, he has never been able to get away from transportation. Transportation programs and infrastructure are almost always a critical and controlling dimension of the project. When project overseers fail to understand this and fail to talk with transportation people who have the money and ability to become a partner in the project, they aren’t doing their job."

An advanced highway network links CenTech Park not only to the Boston area, but also to Providence, Hartford, New York City, and the rest of New England. The park is within sight of the Massachusetts Turnpike and very close to several other interstate highways.

Bolstering his arguments about transportation, Forsberg talked about of the Massachusetts Port Authority (Massport) and its World Trade Center project. Calling for the construction of a "Silver Line" under the Center, the proposal would create a very strong link between transportation and economic development in the urban area. This required consultation with transportation people early in the process.

Forsberg spoke of other exciting things going on in Worcester, specifically citing the Union Station project – a decrepit railroad station that was supposed to become an intermodal transportation center. Using ISTEA money, $38 million was spent in the restoration of a grand old building, which Forsberg calls the "Ellis Island of Worcester." He also characterized it as the "Shakiest development project [he] ever oversaw, but everyone loved it."

In the original plan, the Worcester Regional Transit Authority was the primary client while a private bus company was the second client. They sought to maximize the number of transportation uses, the goal being to create a critical mass of transportation users. They understood that all surrounding transportation infrastructure had to be changed. They also recognized the need to partner with the Massachusetts Highway Department, with a budget and timetable that would match the station: private partners, new parcels, and new configurations. There was great economic development potential. By reaching out to stakeholders, they hoped to bring in new players.

A PPP assignment strategy comprises bringing the right people to the table, and the correct type of governance configuration to implement that strategy. With Union Station, the clear message was to bring transportation players, economic development players, and the city to the table. Forsberg said, "The strangest thing happened – the intermodal transportation center became a boutique on steroids." Keys were handed to developers who obviously did not have transportation expertise. The dialog with private bus companies ended. Although disagreements about timetables broke out between the city and the Massachusetts Highway Department, Mass Highway still had the money, so thus won. Development rights around the station were then accorded to a new developer without any consultation with the existing owner.

"Transportation people do
not have the skills to do
the development piece
and development folks do
not have the skills to do
the transportation piece…
This is a partnership
waiting to happen."

As events there unfold, there may be a new corporation to run the project. For example, the Worcester Regional Transit Authority may operate in conjunction with a private developer. While this "would be a strange and interesting corporation," observes Forsberg, "It could still be done." Transportation people do not have the skills to do the development piece and development folks do not have the skills to do the transportation piece. Remarked Forsberg, "This is a partnership waiting to happen." The WBDC plans to do a master plan and an honest marketing study. As part of an implementation strategy, it will sit down with property owners and find the right type of developers with whom to partner. WBDC cannot do it alone.

Partnerships and the "Big Dig"

Forsberg gave yet another example of the transportation function – the surface artery project in Boston, otherwise known as the Big Dig. The opportunity is an exercise in a PPP that has already taken place, but where more has to happen to achieve its full potential. By creating a tunnel out of the current network of bridges and ramps, the project will create 30 new acres for the city of Boston. Forsberg emphasized how it needs be planned by a new PPP. It needs to be funded, maintained, and governed. Moreover, it also must protect the ability of the Massachusetts Turnpike Authority’s to move cars safely under the artery. "This is a once in a lifetime opportunity to bring all stakeholders to the table," Forsberg attested. The point is that it needs to be developed in a sensitive way. There are air rights issues. There is an opportunity to make money, and the Turnpike Authority has responsibility to its bondholders.

Final Words

Regarding the cliché that people
'need to think outside the box' -
thus forming a new structure to
handle or do unusual projects -
"Interestingly enough…when
that box is a coffin, sometimes
you have to think outside of it."

Forsberg believes that partnerships are good things and necessary things if you want to pull off a complicated real estate deal and create value for the community. In closing, Forsberg emphasized how every project at the WBDC is master planned. "There has to be a master plan for a development strategy," continued Forsberg, "You can’t just be flipping land for a profit." The civic bottom line is that a master plan protects the integrity of the public. He also cited the "need to think outside the box," thus forming a new structure to handle or do unusual projects. Cautioned Forsberg, "Interestingly enough, people need to think more about thinking outside the box…when that box is a coffin, sometimes you have to think outside of it."

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