Playing Smart changelabsolutions.org | kaboom.org 49 as parks or open space, in the project area. The agencies may also build or retrofit parks and community recreational facilities to meet the community’s needs. Public health officials and advocates can work with redevelopment agencies to ensure that plans prioritize and fund activities that improve opportunities for physical activity. Redevelopment has a controversial history in many communities, where the legacy of eminent domain – the taking of private property by the government – has strained the relationship between redevelopment agencies and residents. Keeping this history in mind, advocates can still take advantage of opportunities to get involved in the redevelopment process and direct redevelopment resources to support current residents. Indeed, many redevelopment agencies are looking for opportunities to improve relationships with community members, and directing resources toward joint use ventures could be a valuable way to regain public trust. Public-Private Partnerships A less traditional means of constructing or renovating public infrastructure is through a public-private partnership where a private developer71 builds or improves the facilities and then leases them back to the appropriate public entity – a school district or the local government. These partnerships can take many different forms, but typically the private sector partner finances, designs, and constructs the facility and enters into a long-term lease agreement with the government entity for a set period of time, usually 20 to 30 years. At the end of the lease period, under most partnership agreements, the school district or local jurisdiction has the opportunity to become the owner of the facility. Under these types of partnership agreements, the school district or local government pays for use of the facility from its annual operating budget. This is unlike the traditional means of financing capital construction or improvements, which require the public agency to issue a voter-approved bond.72 Some common private-public partnership arrangements are described below. While the following examples show how such partnerships can be structured to build or renovate school facilities, these same approaches apply to other types of public facilities or infrastructure (such as recreational centers, community centers, etc.): Capital Lease To build a new school, the developer constructs the facility – which it owns – and then leases it to the school district for a set period of time. At the end of the lease term, the school district may pay a token amount to purchase it. To renovate a deteriorating facility, the school district would sell the property to the developer to undertake the upgrades. Then the developer leases the property back to the district.73 Lease Purchase These are similar to a capital lease in that the private developer owns the school facility, which it then leases to the school district for 20 to 30 years. In this arrangement, however, the district’s lease payments go toward purchasing ownership of the school facility. Lease-Leaseback Under this type of arrangement, the school district enters into two leases. First, the district leases property it owns to a private developer (a site lease), usually for a nominal fee. The developer then builds or renovates the desired facilities. The district enters into another lease agreement with the developer, this one to rent back the newly constructed buildings (a facilities lease). This lease also describes the terms by which the district will assume ownership of the property at the end of the lease term. Additional incentives for public-private partnerships to construct school facilities have come from the federal government through the Economic Growth and Tax Relief Reconciliation Act of 2001, which makes it possible for private developers to issue low-interest, tax-exempt bonds called Qualified Public Educational Facility Bonds to fund public school construction and renovation, thus reducing a developer’s overall financing costs.74 In addition, states are adopting legislation that explicitly allows and even encourages public-private partnerships for public infrastructure projects.75 Depending on the agreement, the private developer can do the design work or design the school facilities with direct district involvement and according to community or state standards. Once construction is complete, the developer can be responsible for maintaining the physical structure while the district provides the core elements – teachers, administrators, and curricula – to
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