National Real Estate Investor
The overall architecture of Trump’s plan marks a major change in the federal government’s traditional role in funding infrastructure, passing off the financial burden to state and local governments and ultimately private investors, with less project funding coming from federal coffers.
Palo Alto, Calif.-based Partner William Eliopoulos told National Real Estate Investor there is a strong movement to build infrastructure through P3s, but this funding mechanism is most often used for projects that generate significant revenue, such as student housing, publicly-owned healthcare facilities and airports. Transportation projects, including toll roads and bridges and light rail construction often require bond financing because they don’t generate enough revenue above operational and maintenance costs to pay back private investors.
Eliopoulos notes that public entities are getting very creative to secure P3 financing for public projects that generate little or no revenue, such as civic centers, prisons and courthouses. The city of Long Beach for example is underway with a P3 project to develop a new civic center including a city hall, library, park and underground parking structure.
The most interesting piece of Trump’s infrastructure plan, according to Eliopoulos is the $20 billion earmarked for bold, transformational projects, like San Francisco’s proposed city-wide broadband Internet project. This project, which will require voters to approve funding in November, would provide much faster Internet bandwidth than currently available in the city and provide it to every resident and business too.
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