Downtown Albuquerque, New Mexico. Here’s a great example of how development/investor support groups partnered with municipal support groups to form a public-private partnership development team.*
For a $30-million, 266,000-square-foot mixed-use project in downtown Albuquerque, designed by visionary planners (part of the developer support group), the private sector team contributed $6 million and the public sector (the city) contributed $12 million in the form of land, parking structures, infrastructure improvements and tax abatements.
Using a CoolTown-endorsed three-phase financing methodology, conventional private sector real-estate investors and lenders will receive most of the cash flow from the project’s first five years; the private sector development group will take most of the second-phase revenues (years six through eleven). The city of Albuquerque, which does not have short-term return on investment pressures like the private sector does, will receive some of the cash flow in the second phase and evenly split the revenues with the private sector development group in years 13 to 20. The city will also realize whatever growth in tax revenues the project creates – projected at $48 million over 28 years.
Read more about the program and its author, Chris Leinberger, here for CoolTown Studios’ own ongoing research on public-private partnerships, and here to actually find a private sector partner.
The results? Albuquerque’s downtown has become the fast-growth hot spot in New Mexico.
*It would have been a CoolTown if the tenants and university were involved.