NAIOP New Jersey: "CEO Perspective - The Power of P3s"

Chapter Meeting Discussion Focuses on Impact of Successful Public/Private Partnerships
By: NAIOP NJ
 
PARAMUS, N.J. - Oct. 10, 2014 - PRLog -- A major mixed-use development in Somerset County, corporate-driven redevelopment in Camden, expansion in the academic community - the common tie is that they entail significant public/private partnerships (P3s), and they provided the agenda for "CEO Perspectives: The Power of P3s" at NAIOP New Jersey's September chapter meeting. The event was held at the Renaissance Woodbridge in Iselin.

"The impact of P3s on local real estate markets and the economy is getting development done," said Michael McGuinness, CEO of the commercial real estate development association.

"Our speakers can single-handedly change the economy by buying property at the right price and successfully partnering with towns and municipalities," said discussion moderator Edward Walsh, principal and managing director of Avison Young. "Without those partnerships, many of these projects would be impossible to complete."

For the New Jersey Center of Excellence, a 110-acre mixed-use development on the site of the former Sanofi campus in Bridgewater, "partnering means getting help with zoning and permitting," said Peter Cocoziello, president and CEO of project developer Advance Realty Group. To make its case, Advance took a different approach in the suburban setting: "We took a very close look at the demographics and the overlay of economics, and determined that the town had lost 30 percent of millennials and had seen an increase in Asians, impacting local incomes and ratables."

The result: Rather than a traditional office campus, the site is being reborn as a mixed-use town center. "Millennials are looking for shopping, recreation, a walkable campus and other amenities, and we want to create a place where these young people - and the companies that employ them - want to be."

Rebirth is also on the agenda in Camden, with Campbell Soup Co. taking a lead role in the P3 equation. Noting that his company has been headquartered in Camden for 100 years, and on the same site for 50 years, "we decided to improve our headquarters campus, investing $150 million," said company Vice President Richard Landers. Much of the surrounding marketplace has been blighted, "and our board took the next step, serving as master developer for an office park surrounding our headquarters."

In Camden, the P3 is multi-tiered, with Campbell's partnering with the City of Camden and through such programs as the Economic Opportunity Act of 2013 (EO13) and Camden's designation as a Growth Zone by the State of New Jersey. "Those programs provide companies with major tax benefits and have been successful in attracting and retaining businesses, and are helping Camden compete with Pennsylvania," said Landers.

The result of Camden's P3: "Almost $1 billion of investment to date," said Landers. "There have been a lot of challenges, and we continue to look at development as a ground-up idea."  Also part of Camden's, P3 effort: a revamped police force and education reform, including plans for five to 10 new schools.

"The bottom line is that the boards of Fortune 500 companies, like Campbell Soup Co., are looking to work with communities to make things happen," Walsh noted.

Education Another Venue

Education is also a venue for P3s, particularly New Jersey's higher education community. "There have been dramatic changes at the state level," said Dr. Christopher Molloy, senior vice president of research and economic development at Rutgers University. Specifically, he noted such major landscape changes as the absorption of UMDNJ, the state's medical university, by Rutgers, and by Rowan University's Cooper Medical School. Both Rutgers and Rowan are state institutions.

"As a result, we are looking to work with private developers to establish research centers on our campuses," Molloy said. "We are also working to develop healthcare facilities - New Jersey now has a platform to launch public/private partnerships in these areas, and build out in a constructive way."

"What do you look for in a developer?" Walsh asked.

"We are looking for someone with the vision for an innovative project," Molloy responded. "We look for experience, as well as the ability to provide students and alumni with jobs."

In Camden, Rutgers and Rowan are also partnering with Campbell's and the city in the Coopers Ferry Partnership, an economic development effort that has outlined an institutional plan for the city's downtown, including an office park and retail and residential development. "We can't underestimate the impact of public/private partnerships on economic development in Camden - and the state," said Landers.

"Rutgers is committed to a presence in Camden," said Molloy, noting the location of one of the state university's major campuses there. "There will be new development on-campus - opportunities for build-outs," he said, citing ongoing development on the university's New Brunswick-area and Newark campuses as well. "We are interested in development and leases on build-to-suit spaces," he said, noting a special focus on medical/healthcare, data and engineering. "We want to reach out and touch corporations to achieve that."

Reflecting that much of the discussion has been about the P3 impact on urban locations, Cocoziello admitted that the suburbs, particularly as they pertain to office space, are a "challenging situation," hence the town center approach at the New Jersey Center for Excellence in Bridgewater for competitive reasons.

Beyond that, "because of changes in technology and mobility, migration from the suburbs to urbanized areas, reduced office space requirements and rapidly aging buildings, the current 25 percent vacancy rate has been a long time coming," Cocoziello said. "We need to figure this out," he added, noting the potential for repurposing buildings and sites, and the need for P3s to get the job done.

Home Rule Still a Challenge

One negative in the P3 equation: "Home rule is holding the state back," he said. "Adjacent communities should be working together. They have to understand their communities' needs and work together."

"People don't necessarily think about what you get in return, in terms of the economy and a multiplier effect of working together," Landers concluded. "There is not enough publicity about the impact on our communities."

"New Jersey government officials finally seem ready to embrace the fact that successful P3s create opportunities for innovative approaches to financing, and developing and maintaining infrastructure projects, often in ways that are better, faster and less costly," said McGuinness. "Our speakers today have a proven track record of making things happen, and we thank them for their insight."

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Source:NAIOP NJ
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