Preparing for Public/Private Partnership Negotiations: What to Expect from the Developer
When going into the negotiation phase for a public-private partnership, it is important to remember that a viable project is in everyone’s best interest. Of course there will be discussions about rents, parking, design elements, construction materials, and operations, but there are also some other common negotiating points that are often misunderstood or not expected. Surprises may be fun when it is your birthday, not so much with a highly complex and strategic project. Addressing issues early can help to avoid complications later. 4 Common Issues to Address Here are some issues to consider early on: 1. Applicability of Existing University Contracts Unless communicated early to the developer, it is likely the developer may assume they are at liberty to use their own contracts for vending, laundry and other project services and amenities. With these contracts comes some understanding or assumption of cost (or cost avoidance) and project revenues. If the university has entered into master agreements which are, or will be, applicable to the project, this should be communicated early. 2. Limitations on Eminent Domain and/or Buyout Clause Due to varying appraisal methodologies and the fact that some developers may create a financial structure that does not properly compensate […]
