Public Private Partnership

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.

By Willie L. Patterson III
April 24, 2023

After decades of occupying a government owned decayed federal building, my agent determined it was time to acquire a state-of-the-art leased facility. The challenge was to secure a new facility without federal funds as our project was not funded. The lease terms were not attractive as it only provided a one-year firm term lease with nineteen option years for a brand-new 190 thousand square foot facility in the central business district. How does one convince a private investor to construct a facility with a lease that is particularly challenging to obtain financing from a bank—a project that would surely cost over $20 million dollars? To complicate the project, where can a building of this magnitude be erected in the central business district?

We approached the city to aid in the location of land in downtown to ensure we could remain in the central business district and not drastically impact restaurants by potentially moving almost nine hundred jobs to the suburbs or over the bay into a fast-growing county. We gained a third partner: the City. Now, it’s a three-layered team: city, private developer and the federal government. The Mayor pointed to city-owned land we could build our facility on adjacent City Hall—in the Civic Center parking lot. Thus began the solicitation process with an established location for the new facility.

A clear path to construction became more complicated than one would have imagined. First, we learned about the city government’s power and who has it in the city government. Immediately we learned that the Mayor did not have the authority to approve the project being constructed on city-owned property, but certainly could influence the decision. The City Council had the authority to approve a ground lease. Our next lesson was even more complicated as the location of the land chosen for the new building was situated in a historical district with numerous guidelines. The stakeholders were growing. Now we had to address the Downtown Development District (DDD) and hear their expectations for a new development in the DDD.

Afterwards, our developer submitted their design of the building to the city staff that review and approve new construction. The project had design deviations that did not comply with DDD development. Then it was on to our next stakeholder—the Architecture Review Board (ARB). The ARB had to review the project design and they were unhappy with the design. The ARB rejected the design and sent our developers packing back to the east coast. After a second round with the ARB, with design edits to the liking of the ARB, the design was approved.

Another navigation of local government review boards had to be addressed and project approval granted by the Planning Commission (Commission). The Commission was not thrilled with the project and refused to approve the project. The politics in the approval process resonated, leading the Mayor to meet with the Commission members and articulate the opportunity for the City to erect a new facility downtown, which had not occurred for decades. Our developer took the project back before the Commission and the project was approved. We were closer to approval, but still not there as another board approval was required.

Due to deviations from the DDD requirements, we had to face the Board of Adjustment (BOA). This Board is tasked with approving any deviation from development standards based on the selected zone. The greatest zone deviation challenge was the requirement for a fifty-foot setback of a federal building which was enacted after the Oklahoma bombing. The BOA had no appetite to approve our project especially when a city councilman who was not in favor of our project on city owned property decided to attend the BOA hearing and voice his opposition. The DDD activists also voiced opposition and they collectively urged the BOA to deny the variances requested by the developer. The BOA did not vote on our proposal but pushed the decision out thirty days. They sent our developer a list of questions they wanted answered prior to the next hearing. We arrived with our developer and the Senior leader of the federal agency. The hope was that the senior leader’s presence would aid in obtaining approval. After the hearing, BOA approved minor variances, but denied major variances which effectively would have ended the project.

However, our developer had invested over a million dollars in the planning and design of this project and they were determined to appease stakeholders. After collaborating with the staff of the city and our developer’s architect team, a revised design was submitted to the city staff. The city staff reviewed the submission and determined the revised design met all requirements for construction in the DDD zone. However, the revised design required approval again by the ARB. The ARB approved the project and we are now moving forward with construction.

As a public administrator, I learned valuable lessons:

1. Know your stakeholders.
2. Be flexible with stakeholders.
3. Know who has power and engage early and often for buy in and approval.

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Author: Willie L. Patterson III is a part-time Professor with the University of South Alabama. He can be reached at [email protected] Twitter: @Patterson1963

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