Public Transportation Guidebook for Small- and Medium-Sized Public-Private Partnerships (P3s) (2017)

Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

1 Public transit agencies across the United States are laying the tracks of innovation by forming partnerships with the private sector to improve existing services and more effi- ciently deliver new services and facilities. Transit agencies and the transportation industry are generally familiar with large-scale P3 capital projects that have been executed across the country due to the publicity and existing research and literature reviews. However, there are numerous small- and medium-sized public-private partnership (P3) initiatives being implemented by transit agencies of all sizes. This guidebook aims to broaden the litera- ture on small- and medium-sized P3s by profiling successful initiatives across the country and documenting lessons learned and best practices for other agencies. The findings of this research have been applied to produce a checklist for P3 initiatives, an interactive Microsoft Excel tool for identifying, evaluating, and screening opportunities for small- and medium- sized P3s. Objective of the Guidebook The objective of this guidebook is to serve as a resource for public transit agencies in the United States to better understand, evaluate, initiate, plan, and implement small- and medium-sized P3 initiatives. The guidebook addresses why and when to consider P3s for small- and medium-sized initiatives, what types of initiatives to be undertaken, and how to effectively undertake these initiatives. Definition of a P3 This guidebook applies a detailed definition for P3s that addresses both the scope of the services and the types of risk transferred to a private partner. A P3 is defined as a contractual agreement formed between a public transit agency and a private sector entity that provides a service to the transit agency and transfers some level of risk associated with the activities of the transit agency to the private sector. Need for the Guidebook Small- and medium-sized P3s may involve a public transit agency working collaboratively with, or contracting to, a private entity to renovate, construct, operate, maintain, finance, or manage a transit facility or system. While existing research identifies examples of P3 initia- tives and why they may or may not be applicable for public transportation, such research is limited because the examples tend to be for large-scale P3 initiatives. Little information S u m m a r y Public Transportation Guidebook for Small- and Medium-Sized Public-Private Partnerships (P3s)

2 Public Transportation Guidebook for Small- and medium-Sized Public-Private Partnerships (P3s) has been gathered to describe small- and medium-sized P3 initiatives associated with public transportation or to offer best practices for identifying, planning, and implementing such efforts. In an effort to fill this gap, this guidebook offers practical approaches and methods for identifying, initiating, planning, and implementing small- to medium-sized P3 initiatives associated with public transportation. Drawing on existing and planned initiatives and a literature review, this guidebook • Defines the different types of small- and medium-sized P3s; • Identifies the potential benefits and risks of different types of small- and medium-sized P3 initiatives; • Assists public transit agencies in identifying, evaluating, and screening opportunities for small- and medium-sized P3s, including whether conditions are favorable for attracting private sector interest; and • Identifies barriers and challenges to planning and implementing P3s and how they may be overcome. Description of Checklist The P3 Project Screening Checklist is an interactive Excel tool that was developed through the findings in this guidebook. Findings included in the checklist were developed through interviews with public transit agencies and private entities. The research team used the various lessons learned to design a tool to present the user, the public transit agency, with an over- all evaluation of the P3 initiative based on the transit agency’s objectives. This dynamic tool can help public transit agencies assess the appropriateness of delivering a transpor- tation project as a P3 and fosters early stakeholder collaboration during the checklist process. The checklist is described in full throughout the guidebook and is provided as a Microsoft Excel spreadsheet on the TRB website at www.trb.org/Publications/Blurbs/ 175901.aspx. Description of Case Studies This guidebook presents eight case studies, selected from a variety of geographies in the United States, to capture the current state-of-the-practice in the public transportation industry. The case studies were of all sizes (project size and public transit agency size) and at least one case study fell in one of the given categories of P3 initiatives. The P3 categories and case studies investigated for this study are described below. • Capital Improvements include the transfer of some combination of design, construction, finance, and often operations and/or maintenance risk to the private sector. – Massachusetts Bay Transportation Authority (MBTA) Boston Landing Station – Metropolitan Atlanta Rapid Transit Authority (MARTA) Dunwoody Station extension • Operations and Maintenance (O&M) involves outsourcing the O&M of transportation and other services, including O&M concessions, partnerships with taxi and transporta- tion network companies, and maintenance concessions. – Pinellas Suncoast Transit Authority (PSTA) Direct Connect pilot program – International and domestic perspectives profiles

Summary 3 • Real Estate partnerships help to develop real estate at transit facilities. Options include joint development, air rights, station access, long-term leases, easements, and vending and retail concessions. – Anaheim Regional Transportation Intermodal Center (ARTIC) concession management – Regional Transportation District (RTD) of Denver Depot Square Bus Station • Marketing Agreement includes sponsorship or joint marketing of products or services related to the transit agency (e.g., fare cards, real-time display monitors), naming rights, and advertising. – Hillsborough Area Regional Transit Authority (HART) advertising technology – Rural Transit District—Ark-Tex (TRAX) sponsorship • Innovative Technology partnerships for new technologies related to public transporta- tion services include energy savings, fare payment, real-time information technology, and Wi-Fi and wireless service. – New York Metropolitan Transportation Authority (MTA) Wi-Fi and wireless service The following list synthesizes the findings from each case study for each category of P3: • Capital Improvements – Assemble a skilled team, – Select an appropriate contract method, – Leverage previous P3 experience, – Determine each partner’s responsibilities and costs up front, – Encourage early stakeholder involvement, – Promote transparency between the private and public partner, and – Embrace flexibility throughout the project phases. • Operations and Maintenance – Encourage early stakeholder involvement, – Understand the surrounding marketing, – Leverage a partner’s skill and experience, – Assemble a skilled team, and – Be open to innovation. • Real Estate – Establish and maintain one critical point of contact, – Leverage a partner’s skill and experience, – Determine each partner’s responsibilities and costs up front, – Ensure full support from all stakeholders involved, – Solidify the project’s goals and parameters, and – Confirm all elements of the project in early stages. • Marketing Agreement – Solidify the project’s goals and parameters, – Determine each partner’s responsibilities and costs up front, – Be open to innovation, – Secure a project champion, – Promote transparency between the private and the public partner, – Find stakeholders that share mutual project objectives, – Ensure full support from all stakeholders involved, and – Leverage previous P3 experience. • Innovative Technology – Solidify the project’s goals and parameters early on, – Maintain a critical point of contact and foster relationships, – Be open to innovation, – Leverage a partner’s skill and experience,

4 Public Transportation Guidebook for Small- and medium-Sized Public-Private Partnerships (P3s) – Determine each partner’s responsibilities and costs up front, and – Promote transparency between the private and the public partner. Each interviewee was presented with 10 elements of a P3 and asked to rank how critical each element was to the success of the case study. These responses, combined with reported lessons learned, are synthesized as the best practices. The findings are detailed into nine best practices public transit agencies should understand and strive to adhere to when developing new small- and medium-sized P3s. These best practices include, but are not limited to, the following: • Identifying project champions early in the P3’s development, • Leveraging assets unique to a public transit agency, • Understanding risk and how to transfer the optimal amount to a private partner, and • Clearly defining project objectives and specific goals for the partnership before a private partner is involved. Conclusion This guidebook identifies the challenges that may be encountered by small- and medium- sized P3s and the factors that lead to their success. While small- and medium-sized P3s may be similar in some ways to large P3s, there are important differences that should be recognized as detailed in this guidebook. This guidebook functions as a resource for public transit agencies to find the advantages of partnering with a private entity to deliver a transportation project. P3s can be advanta- geous to public transit agencies, considering projects may be able to deliver and perform more efficiently, less expensively, and with less risk involved for the public partner.