P3 Projects Helping Local Governments Build a Smarter Miami

Daily Business Review
May 18, 2018

The emerging field of public/private partnerships (P3s) was at the forefront of discussions on building cities of the future during the eGOV Summit, part of the 4th annual eMerge Americas tech conference held last month in the Miami Beach Convention Center. The conference brought together more than 15,000 attendees including government officials, urban planners, innovators, investors and other stakeholders from North America, Latin America and Europe.

A P3 model can be used to create incentives for private innovation that can benefit the public sector. Private firms are often comfortable absorbing risks in exchange for potential returns, and risks can be strategically allocated to the private sector in a manner that encourages innovation. For example, a private firm that is made to bear the risk of low ridership on a mass-transit system will have an incentive to incorporate the latest innovations to improve the ridership experience, such as coordination with “last mile” services such as Uber, Lyft, and bike- or scooter-sharing options.

This topic was specifically addressed during the conference’s P3 Smart Cities Roundtable. Moderated by Bilzin Sumberg Managing Partner-Elect Albert E. Dotson Jr., the panel specifically addressed opportunities for private innovation and capital to advance public infrastructure projects that can help transform existing urban communities into smart cities.

As panelist, Cissy Proctor, executive director of the Florida Department of Economic Opportunity, noted, the state has already implemented several initiatives and incentives aimed at encouraging new business and development in the technology sector and continues to develop additional programs to meet the ever-changing needs of today’s market.

Florida legislators are also taking a forward-looking approach with respect to new technologies, said Sen. Jeff Brandes, who represents the Pinellas County area. For example, in many cases the Florida Legislature requires that the state hold back on adopting new regulations based on speculation about which technologies will dominate in the future, because such predications rarely prove correct. The Brightline intercity passenger-rail system and Metrorail station redevelopments are among local projects our firm has been involved with that have benefitted from this approach.

Local government entities have, in recent years, restructured their procurement processes to encourage private innovation, often by adopting an outcome-desired approach that lets the private sector develop the best solution rather than specifying a particular means of achieving that outcome first. This approach very often results in cost reductions. A recent example is the people-mover at Miami International Airport’s E Terminal, which uses an outside-the-box cable car design to meet the airport’s performance objectives while only requiring one motor for the entire system (as opposed to one for each car, which is often the case).

The private sector will need to play a major role in creatively designing and financing the new smart transportation infrastructure required by Miami-Dade County’s SMART Plan, which includes a massive transit expansion project, said Alice Bravo, director of the county’s Department of Transportation & Public Works.

Private sector participants said they’re actively seeking opportunities to bring new technologies to the public sector. Jose Gonzalez, Senior Vice President at Florida East Coast Industries, cited the technological innovations behind Brightline, which was privately designed, constructed, financed and operated, but in close coordination with the public sector. As the most visible example of private innovation in the infrastructure arena, Brightline promises to be transformative for the local and state economies and may inspire more private investment in public infrastructure projects.

Jim Barbaresso, senior vice president at HNTB and an expert in smart infrastructure and driverless vehicles, spoke about the surge of development in this emerging category and enumerated some of the challenges in implementing these technologies, especially in regard to data control and management. Data can be an attractive source of revenue for smart cities projects, but he warned that its use needs to be carefully controlled and managed, particularly when considering privacy concerns.

It’s clear that both public and private sectors are actively searching for opportunities to leverage technology that will help cities work smarter and operate more sustainably. In general, eMerge Americas’ eGOV Summit forecasted a bright future for Miami’s continued maturation as a global city—one that is no longer simply a place where the affluent come to play but a true urban metropolis where real money is being put to work in the form of new business ventures, new development and new ideas.

As Miami continues to leverage its proximity to Latin America, relatively low barrier to entry, influx of young millennials and thriving urban core, we expect the next few years to be marked by sustained progress, with both public and private sectors continuing to place a high priority on expanding and diversifying Miami’s economy and innovating across broad spectrums of its ecosystem. There’s no doubt that Miami will remain known for its pristine sand and sun, but also its growth as a global hub for technology, innovation and investment.

This article is reprinted with permission from the Daily Business Review.

Javier F. Aviñó
Practice Group Leader, Land Development & Government Relations
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