We depend on public infrastructure to deliver our water, remove our waste, light our homes, support our vehicles, and generally keep our lives functioning. Given that the bulk of our public infrastructure is deficient or obsolete and that municipal coffers are running dry during this current economic downturn, it is vital that municipal issuers find innovative funding sources for infrastructure repair and replacement. To that end, issuers are increasingly partnering with private developers in so-called "public-private partnerships" to share both the costs and the benefits of infrastructure development. For example, Goodwin Procter attorneys recently helped the City of Los Angeles partner with developers to subsidize the L.A. Live! development in downtown Los Angeles, a multi-billion dollar entertainment and lifestyle development. Los Angeles used its charter city authority to allocate millions of dollars in future revenues from hotel occupancy taxes to the project. Goodwin has helped many other cities, including Buena Park, Burbank, Irvine, Long Beach, and San Francisco, to successfully partner with developers to subsidize the construction of various infrastructure projects by pledging anticipated increases in tax increment, sales taxes, and other revenues to secure bonds or to reimburse development costs.
Alert December 29, 2008