In prior posts, we have written about the federal government’s new focus on public-private partnerships in order to leverage its grant money with private investments, as well as the future of transportation-related PPPs in the Miami area. Those trends continue, as evidenced by the U.S. Department of Transportation’s recent award of a $11.4-million transportation grant to UniversityCity, an Florida International University-led P3 transportation project that will ultimately connect FIU’s Modesto A. Maidique Campus, on the west side of Miami-Dade County, to the Miami International Airport and the Miami Intermodal Center, which is connected to the Metrorail system.
P3 Funding for Transportation Projects
The UniversityCity project will include public-private real estate development components, which can help fund the public transportation elements of the project. Because public transportation rarely generates a positive income stream that can be split between the government and a private partner (bus systems, for example, typically collect between only 20 and 30% of operating costs in fares), P3 transportation projects are often paired with other, compatible components, such as real estate developments in order to help subsidize the non-revenue-generating transportation components. The Miami Intermodal Center, which UniversityCity will be connected to through BRT (bus rapid transit—essentially a bus that operates like a train, running in dedicated lanes and making infrequent stops), similarly utilizes compatible revenue-generating uses, such as joint real estate development and a rental car center, to stay in the black. And, in general, government agencies, including other local colleges and universities, are increasingly looking to public-private partnerships for real estate development, as evidenced by Miami-Dade College’s recent announcement of a P3 development for its medical campus.
In the coming years, in part due to the federal government’s focus on P3s and in part due to the region’s increasing need for new transportation infrastructure, we can expect to see an increasing number of transportation-related P3s, and hopefully an increasing diversity of compatible uses and other financing schemes to make public transportation more viable financially.