P3 Trends: Rise in Private Placement Financing of Mid-Size P3s

P3 FinanceIn the last twelve months, four national public-private partnerships (“P3s”) have been financed in the U.S. private placement market, accounting for over $800 million in project cost financing. While there has been a shift towards private placement investors as a P3 financing source, the market activity in the last year has confirmed investor appetite in P3s, particularly those with availability payment-based compensation structures.

Private placements are securities offerings to limited numbers of sophisticated investors. These offerings are exempt from registration under the U.S. Securities Act of 1933. Conservative, long-term investors, such as insurance companies and pension funds, tend to dominate the U.S. market. While private activity bonds and TIFIA loans present cheaper financing options, they are not available as financing sources across certain asset classes, including social infrastructure and smart city initiatives. Many features of the traditional private placement market align with financing features of the P3 market. For example, private placement investors favor long-term debt, with tenors of 30 years or more depending on the project, far exceeding the short tenors available in the bank finance market. In addition, as private placements in the P3 context are typically closed with a small number of investors, the project benefits from more flexibility in financing terms and, if needed, a simplified process for amendments and waivers over the life of the project, as compared to similarly-tenored bond financings. Finally, because of their long tenors and fixed credit spreads, private placements minimize project refinancing risk. Continue Reading

National P3 Update: Higher Education and Social Infrastructure

social infrastructureWe have written about how the public-private partnership (P3) project delivery model can and should be used to meet infrastructure needs. Because P3s are constantly being considered and tested all over the country, we wanted to provide an update on the status of these projects so that interested stakeholders can easily keep an eye on the market overall. Our first installment of the National P3 Update will focus on higher education and social infrastructure P3s. We will issue more updates on these projects, as well as updates on projects in other industry sectors. Continue Reading

Miami-Dade County Zoning: Administrative Requirements of Workforce Housing Bonuses

Workforce Housing Development ProgramIn 2007, the Miami-Dade County Board of County Commissioners adopted Ordinance No. 07-05, which created a voluntary Workforce Housing Development Program in order to encourage development of land available for residential use targeted towards the workforce income group. The program allows real estate developers to obtain density and intensity development bonuses by providing either workforce housing units (WHUs) or a monetary contribution to the Miami-Dade County Affordable Housing Trust Fund. In 2016, the Miami-Dade County Board of County Commissioners adopted Ordinance No. 16-138, which updated the Workforce Housing Development Program by amending certain provisions of the County’s existing voluntary program by enhancing the bonuses and incentives available under the program. Continue Reading

Are P3s the Answer to U.S. Infrastructure Issues?

infrastructureAfter last month’s meeting with Democratic leaders in the House and Senate, President Trump’s $1 trillion infrastructure plan has become $2 trillion. As the legislature continues to digest the plan, many are beginning to raise questions about the plan’s viability. The fundamental issue is a predictable one–$2 trillion is a big number, and legislators are having trouble deciding how to pay for it.  Continue Reading

South Florida Opportunity Zone Forum

Opportunity ZonesOn June 5th, ULI SE Florida/Caribbean and Bilzin Sumberg hosted the South Florida Opportunity Zone Forum. Attendees gained valuable insights into the forces shaping our industry and were the first to hear about the results from our recent South Florida Opportunity Zone survey while networking with the people making the most important opportunity zone deals.

The Forum touched on topics including: strategies to unlock transformative economic potential and create lasting change in South Florida’s blighted neighborhoods; IRS and Florida’s legislation as it pertains to the governance of Opportunity Zones and related investment issues; the greatest benefits and obstacles for investing in an Opportunity Zone; and which asset classes are most ripe for development on OZ legislation. Continue Reading

Coral Gables Zoning Law: New Electric Vehicle Charging Station Laws

Electric Vehicle Coral GablesIn 2016 the City of Coral Gables introduced its new Green Fleet of 20 electric Nissan Leaf vehicles. The City of Coral Gables currently has a total of 43 electric vehicles in its fleet which is one of the largest government electric vehicle fleets in the State of Florida. The City’s goal is to have a fleet of 78 electric vehicles by fiscal year 2021. It should come as no surprise then, that the City of Coral Gables is now joining municipalities across Miami-Dade County, and the country, in encouraging the installation of electric vehicle (EV) charging stations in new real estate development projects.

The City of Coral Gables recently amended its Zoning Code to obligate that 2% of required off-street parking be reserved for EV charging stations for almost all new commercial projects in the City.  The 2% EV charging station law applies to all real estate development projects that require twenty (20) or more off-street parking spaces are required for a commercial project. Continue Reading

Zoning Appeals Law Update: Miami PZAB Applies Incorrect Waiver Standard

demolitionIn CUBE 3585, LLC, v. CITY OF MIAMI, et al., Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County[i], an appeal was filed by Cube 3685, LLC (“Cube”) from proceedings involving application for a zoning waiver[ii] for a demolition permit with the required tree survey to demolish the single-family residence (cottage).

The City of Miami Zoning Administrator (“Zoning Administrator”) approved the Waiver with conditions under section 3.3 Appendix A of Miami 21 Zoning Code (“Zoning Code”)[iii] to allow the demolition. That decision was successfully appealed, under Article of the Zoning Code to the Planning, Zoning, and Appeals Board (“PZAB”) of Respondent City of Miami (“City”).

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Miami Zoning Appeals Law Update: City of Miami Departs Essential Law Requirements

Coconut Grove PlayhouseIn Miami-Dade County v. City of Miami, Circuit Court, 11th Judicial Circuit (Appellate) in and for Miami-Dade County (Case No. 18-000032-AP-01) [26 Fla. L. Weekly 800b], an appeal was filed by Miami-Dade County (the “County”) from proceedings stemming from plans to renovate the Coconut Grove Playhouse. The Court ultimately ruled that the City of Miami departed from essential requirements of the law when it found that city residents were an “aggrieved party” and therefore had standing to challenge the City of Miami’s Historical and Environment Preservation Board decision. Further, the Court also importantly found the County was not afforded procedural due process as the County was not afforded notice of the relevant hearing and an opportunity to be heard during the proceeding. Adequate notice requires that the scope of the hearing be properly identified and therefore, the City exceeded the scope of the hearing by including the interior of the building in its decision to grant the appeal. This violated the County’s procedural due process. Continue Reading

Case Study Series: Benefits of Coral Gables Shared Parking Ordinance

parkingUrban cities and developers alike are taking advantage of the modern utility and benefits of shared parking. Particularly in mixed-use projects, shared parking can deliver more affordable development, reduce construction waste, improve building aesthetics, and also reduce traffic. In the world of real estate development where solutions to housing affordability, massing aesthetics, and construction waste are difficult to find, shared parking assists in all these core challenges.

As a land use strategy, shared parking plainly optimizes parking capacity and prevents costly construction waste. As a result, shared parking can be used to greatly lower the costs of real estate development by lowering the amount of parking required especially for mixed-use real estate developments. Additionally, shared parking also has significant aesthetic benefits by reducing the bulk and mass of structured parking garages. Continue Reading

South Florida Investment: Opportunity Zones Survey

Opportunity ZonesWith the issuance of the long-awaited Opportunity Zone regulations by the U.S. Department of the Treasury on April 17, 2019, real estate investors, owners, and operators in the State of Florida are anxious to seize the “opportunities” afforded by the Opportunity Zone program, which will offer participants significant tax benefits.

While the Opportunity Zone program appears to hold a lot of promise, there are many uncertainties and nuances under the newly issued Opportunity Zone regulations, including the interplay between such tax benefits and other incentive programs, and the impact on investors, owners and operators currently engaged in business within designated opportunity zones.

Bilzin Sumberg and ULI SE are conducting a brief, 13-question survey among developers, investors and other professionals who specialize in real estate and finance in Florida, to delve into how the industry is thinking about the program. Continue Reading