Public-Private Partnerships Present Potential for Progress in Higher-Ed
Customized financial options can unlock a world of talent and resources to improve projects and speed up the process
With the rising costs of higher education, lack of public funding and number of new residents moving to Colorado, a need has emerged for improved higher education infrastructure that serves students and faculty on university campuses. But like so many industries, Colorado is decades behind in keeping up on these projects — whether it be deferred maintenance of existing facilities or the completion of new construction projects like affordable student housing. This is largely due to the fact that public funding in higher education is generally allocated to research programs or grants and, because many of these infrastructure projects don’t fit into this category, they receive little to no funding from the institution. Many universities around the country are realizing that Public-private partnerships (or P3s) that leverage local and regional players may be the answer. Once thought to be just for toll roads, it is becoming clear that the education sector needs to utilize alternative financing options to fund local and regional education projects as well.
Increasing the private sector’s role may have several potential advantages over traditional public delivery of education. When implemented correctly, private sector involvement can increase efficiency and choice, expand access to education services, and give local and regional players the chance to bring their expertise to a project to develop, operate and maintain that asset for the entire lifecycle of the project. This helps save on operational costs over time and ensure the asset’s long-term success. Public-private partnerships also enable a more work-force ready labor pool and help cover some of the costs to universities that are getting little from the State. By utilizing the local expertise of these regional players the job can get done in a more cost timely manner.
Many universities across the country are partnering with private business and using private equity to develop customized programs and even co-sponsor construction of new buildings. The University of Kansas utilized a P3 to develop needed student housing on campus through an innovative financing partnership. More locally, Colorado State University is looking at alternative financing options to build its new Foothills Campus.
Public-private partnerships also allow governments to take advantage of the specialized skills offered by certain industry members and to overcome operating restrictions that may prevail in the public sector. Academia is best at teaching students and contractors are best at building, developing and maintaining infrastructure. Companies, like Saunders Construction, know how to look at the lifecycle of a given project and determine where the risk is and where the dollars are best allocated. They also have experience creating and managing these P3s, including the Great Hall project at Denver International Airport, recently approved by the City and County of Denver.
Public-private partnerships can be delivered during times of critical need, rather than waiting until public funding may or may not become available. Through customized financing options, the ability, talents and resources become available to take a prominent role in the project. Saunders Construction, for example, is a local expert that not only builds education facilities, but understands the costs of maintaining them over their life span. This can apply to all types of social infrastructure and be customized to the client.
Public-private partnerships are the future of delivering critical infrastructure for colleges and universities across the country, providing higher education institutions with new tools and ways to address their infrastructure challenges.