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3 Keys to the Success of a Public/Private Partnership

| Tuesday March 22nd, 2011 | 0 Comments

At the 20th Annual Rocky Mountain Land Use Institute Conference this March, David O’Neal, Managing Partner of real estate development company Brynn Grey Partners, Ltd., and Michael Penny, Town Manager of the Town of Frisco, Colorado were featured on a panel discussing keys to the success of public/private partnerships.  The two are near experts on the topic, having recently and successfully co-developed Frisco’s Peak One affordable housing community.

The impetus for the project was a severe shortage of affordable year-round housing for Frisco residents in the 65% second-home community.  And while the project’s initial goals were well-received by the Frisco community, the plan became controversial when the town announced it would use town-owned land, formerly green space along a bike path, to construct the development.  Because the land was publicly owned, the public took on an unusually involved role in every step of the development process.  From this experience, O’Neal and Penny drew their 3 keys to success:

1. Get the right people… in the right roles

It is not enough to get the best, most experienced people for the job.  Instead, projects should also focus on getting those people in the best role for them. From the public perspective, it is essential to choose a developer or consultant who understands the many variables a town or city council must juggle, including public participation and tight budgets.  From the private perspective, it is essential to submit a bid that, while aimed at making a profit, remains cognizant of public concerns and budgetary constraints.

For the Peak One project, the Town of Frisco wanted to appoint someone who could communicate both with the public and with the developer.  Frisco chose Jocelyn Mills, Project Resource Manager, for the job.  Mills was adept at building community consensus and promoting real-time public communication while simultaneously understanding the needs of the developer.  When the town received seventeen bids for the project, Mills asked town residents to help her choose.  O’Neal’s zen-like approach to developing won out.  With the two key parties in the roles that they were best suited for, the project became destined for success.

2. Create well-defined outcomes, not processes

Both O’Neal and Penny were quick to point out that, once completed, no one ever remembers or cares about the steps it took to complete a project.  Because such processes are ultimately absorbed into the success or failure of a project, the two agreed it is far more useful to focus on the ends rather than the means.  O’Neal and Penny put forth two ideas to help projects stay focused on the ends:  first, establish a non-binding memorandum of understanding (MOU), and second, do not over-compromise.

An effective MOU should include a comprehensive vision statement, a description of any code changes necessary to realize the vision (as Penny remarked, “the code has to get out of the way of the vision”), and the several roles each party will be required to assume.  O’Neal and Penny found the non-biding nature of such an MOU enables all parties to make the decisions they must, without sacrificing the overall vision.  The MOU started to take on “moral authority” of its own, and the end result ended up looking very much like the initial nonbinding agreement.

Moreover, compromise is not always the key to success.  A partnership that becomes bogged down in compromising on every minor point gets distracted from the larger end.  O’Neal and Penny pointed out that if they had compromised on the width of the alleyways in the neighborhood (O’Neal wanted them wide for quality of life reasons; Penny wanted them narrower so the town wouldn’t be responsible for snow removal), they would have ended up with irrational mid-width alleys.  Sometimes it is best to concede a small point in order to keep moving toward the end goal.

3. Foster an environment of openness and trust

The public and private sectors come to the table with different perspectives. Developers are inevitably motivated by profit.  And for many entrepreneurs, success can arise out of even the greatest failure. The public sector is motivated by serving its constituents and ensuring the success of the project. For them, failure is not an option as public accountability extends far beyond what a developer might face with its financial shareholders. Therefore, there is a huge differential between how each party perceives risk.

O’Neal and Penny urged to let assumptions go, resist being creature of habit, and get to know the other side’s motivations and goals. From there, it becomes far more possible to create an atmosphere of trust and communication. Because at the end of the day, it is a partnership.

Allison Pofit Altaras is a first year law student, outdoor enthusiast, and fledgling science fiction writer.


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