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Document Sample
Partnerships in Urban
Property Development
Nigel Dubben
School of Surveying and Planning
Kingston University
Brendan Williams
School of Geography, Planning and Environmental Policy
University College Dublin
)WILEY~BLACKWELL
A John Wiley &. Sons, Ltd., Publication
Contents
*
Preface ix
About the Authors xiii
Acknowledgements xv
1 The Public and Private Sectors 1
The nature of partnership 1
The public sector 2
The state and private sector power 5
Centralisation of power by government 14
Power relationships with central area redevelopment 15
The state and the private sector - the 'hollowed out' state 18
The state, globalisation and the corporations 19
Government policy 22
Development of government policy 24
Exercise of state power 28
Government and private companies 31
References . 32
2 The Property Development Process 35
Introduction 35
The property market 36
The supply of urban built space 42
Finance and the development process 44
Life cycles in buildings and their property development
implications 46
Public policy choices in the property market 49
References 52
3 Partnership Negotiations Using Property Development Appraisal
Techniques 53
The development decision 53
Partnerships between public and private interests 54
vi Contents
Assessing options 58
Sensitivity analysis 59
Key inputs in negotiations 62
References 64
4 The Private Finance Initiative 66
History of the private finance initiative 66
The PFI process , 68
Justification for PFI [ 69
Financing of PFI projects ' ~~~ 72
Value for money and procurement in PFI projects 74
Risk and value for money 75
Policy responses 77
Design of PFI facilities 83
Project changes 86
Public sector ethos 87
Comparative case study 88
The PFI project 88
Progress with PFI project 88
The case study project 91
Comparison with PFI procedures 92
Cost time and performance ^ 93
Comparison with PFI project 95
Conclusion 98
CAPRICODE summary 99
References 101
5 Public-Private Partnerships in the Urban Development
Experience of Dublin 104
Background 104
Engaging in public-private partnerships: from urban
regeneration to PPP 107
Evolving public-private inputs in urban renewal in Dublin 109
The emerging role of public-private partnerships in 2008/2009 129
References 141
Website sources accessed 2007/2008 142
DOE Urban renewal Legislation 142
6 Property Funding Partnerships 143
Introduction 143
Debt or equity? 144
Lender's risk avoidance ratios 145
Corporate finance 148
Rights issues 148
Categories of project finance 149
Sale and leaseback 150
Rent-sharing leases 151
Contents vii
Side-by-side leaseback 153
Reverse sale and leaseback 154
Documentation for profit sharing leases 155
Rent-sharing leases-terms, risks and responsibilities 155
Letting policy 156
Capitalised sale and leasebacks 158
Profit erosion with priority yield 159
Timing 164
Funding structure j 164
Return and yield ~~~ 165
Mortgages and debentures 166
Profit sharing mortgages 168
Default by mortgagor 169
Forward sale or forward commitment 171
Debt structure 172
Interest rate hedging techniques 173
Other corporate lending 174
Other investment vehicles 174
The charge to interest 175
Profit erosion with priority yield documentation 176
Management reality and conflict of objectives 180
References _
_. 180
7 Development Partnerships and Landowners 182
Methods of site purchase 182
Options 183
Conditional contracts 183
Overage and clawback 184
Partnerships with local authorities 184
Process 185
The development brief 187
Content 188
The disposal documents 189
Refurbishment 203
Project A 208
Contracts and documents 209
Overage/lease and leaseback 212
Equalisation agreements 214
Types of agreement 215
Deals with landowners 216
Crystallising Section 106 costs 218
Joint ventures 219
Structures 220
Management of the joint venture company 220
Step in rights and joint venture termination 221
Example of joint venture with syndicated funding package 222
References 224
viii Contents
8 International Trends in Public-Private Partnerships 225
Evolving PPP programmes internationally 225
Use of PPP internationally 228
Accountability issues 232
Political accountability 233
National and international accountability 235
Guidance on setting up institutionalised public-private
partnerships 236
Risk transfer [ 236
References "" " " 238
Websites accessed 2007/2008 239
9 Economic Background and Future Trends 240
References 246
Index 247
