Exciting Discussions Coming Out of P3 Connect
August 03, 2015 | By Wayne O'NeillWhen I attended the P3 Connect National Conference for Public-Private Partnerships in Boston in July, I came away feeling really excited.
The P3 Connect organization is unique in that it combines the financial perspective and the client perspective. What I noticed right away is that the discussions were much more focused on solving the business problem than simply using the public/private structure.
There seemed to be a consensus with people from both sides – development and capital markets – that the conversation needs to move more toward what problem the client is trying to solve. Not what financing they need, not what real estate they need, not what kind of building they need – but what the underlying problem is.
This was so refreshing.
When the topic of higher education came up, for example, the subject of deferred maintenance got a lot of attention. Right now, for so many institutions, that deferred maintenance is getting sloughed off and ignored. It’s a political hot potato. But in three different panels that I engaged with, they talked about how to minimize the impact of deferred maintenance. They also talked about how to roll it into a public/private partnership infrastructure package that also contains new buildings.
This is the kind of conversation that needs to happen for real change to occur and real growth to happen.
These conversations address the real problem. The real problem is not “we don’t have money to build a new business school” or “how do we use some other form of development?” That’s not the most important thing with P3 – because it’s not a project, it’s an asset. And an asset has to be leveraged, taken care of and maintained. P3 is not a rental agreement, it’s a concession agreement. That’s not just wordplay – it’s a change in thinking.
Whether you’re talking about higher education and student housing, or you’re talking about changing a healthcare campus, the real issue is about solving the business problems these institutions have. It really struck me that this solution-focused discussion was rampant at P3 Connect. There was so much creativity and passion coming out.
I especially saw this passion in the higher education space. People with financial interest, development interest and user/owner interest were collaborating and clearly trying to make a difference. They were trying to make education more meaningful and connect with students to deliver value that leads to careers (not just jobs).
This is the shift I’m seeing happen, and it’s extremely encouraging: Stakeholders are viewing P3 projects from a solution and asset standpoint.
In higher education, that means changing college campuses so they’re places that students want to spend 4-6 years of their life. So they’re places where students get trained to make more money.
In accountable care, that means creating an environment or building a campus that is focused on health delivery – not just “how do you get more money from sick people.”
This is different thinking. It’s P3 as an asset mentality.