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Comparison of International P3 Model, 63-20 Corp and Hybrid Lease

The Great Debate:. Comparison of International P3 Model, 63-20 Corp and Hybrid Lease. Public-Private Partnerships. What is 63-20?. Operations. Ownership. Private Performance Based. Through an “on-behalf-of” not-for-profit. Maintenance. Financing. Privately contracted

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Comparison of International P3 Model, 63-20 Corp and Hybrid Lease

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  1. The Great Debate: Comparison of International P3 Model, 63-20 Corp and Hybrid Lease

  2. Public-Private Partnerships What is 63-20? Operations Ownership Private Performance Based Through an “on-behalf-of” not-for-profit Maintenance Financing Privately contracted Dedicated repair and replacement reserve 100% Tax Exempt Debt Development Private Build-to-Suit Integrated Delivery Incentives to perform Occupancy Costs Lowest in the industry National Development Council

  3. The Development Process Development Phase Design Phase Public Agency Public Agency Lease Special Purpose Entity Special Purpose Entity Architect & Engineer Developer Architect & Engineer Developer General Contractor-Construction Manager General Contractor-Construction Manager Sub-contractors Sub-contractors National Development Council

  4. Typical PPP structure Governmental Sponsor DBFOM or DBFM Agreement Availability Payment Equity Provider Project Company/Developer Senior Debt Provider Senior Debt Agreements D&C Contract FM Agreement Interface Agreement Design & Construction Operations & Maintenance (including life cycle)

  5. Attributes of typical PPP structure Strong balance sheet – credit rating + Efficient Risk Allocation + Payment Guarantee (assuming performance) + Parent Company Guarantee + Security = • Non-recourse project financing • License structure – no charge in ownership • Significant risk transfer • Strong value proposition Investment Grade Transaction

  6. Hawkins Developer Lease/Hybrid Model Delafield & Wood LLP • Lease of Commercial Development Rights in connection with Implementation of Public Infrastructure • Ex. – Commercial Development Lease in connection with Courthouse Project • Alternative/Offsetting Source of Funds for Public Infrastructure Development • Economic Development Considerations • Developer Lease could be a Component of either International Model or 63-20 Model • Nature of the Entities: Commercial Development vs. Public Infrastructure Development • Risks Associated with Commercial Development • Cost of Capital

  7. Comparison Summary

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