Become an Expert, Hire Experts
Embarking on a P3 involves a complex communication and decision-making process that requires expertise in a range of areas, from legal and financial, to design and construction, to cultural and institutional. University leaders must develop a thorough understanding of a given building program, its budgetary considerations, the institutional culture, and other factors that will impact the project’s success. These drivers must be reconciled in relation to one another and well-articulated within the financial and technical requirements outlined in the Project Agreement.
“In a traditional project delivery, we act as the planner, designer, owner, and operator. The P3 delivery method changes that greatly as we retain our role as academic planners and institutional owner representatives but must master the new skills required to successfully navigate the role of development and financial transaction partner. It is critical, as leaders, that we build teams with technical expertise and understanding of these new roles if we are to be successful in negotiating and delivering P3 projects for our campus” —Traci Ferdolage, San Jose State University (Formerly University of California, Santa Cruz)
P3 projects are typically led by a group of University leaders within the campus Administration, including people from Physical and Environmental Planning, Capital Planning, Space Planning, Design and Engineering, and Maintenance and Operations. Most of these professionals have led or participated in project delivery methods (e.g. Design-Bid-Build, Design-Build, CM-at-Risk) that do not require complex legal and financial real estate transactions and that do not usually last for more than two to four years.
To lead a successful P3, University leaders must learn to speak a new language and develop new subject matter expertise. They must also work with those within their organization who are responsible for real estate transactions. Additionally, the University team should be complemented by third party P3 Technical Advisors –– experts in real estate, law, finance, design, engineering, and construction — to assess feasibility, develop the Business Case, and procure and manage compliance with the P3 Project Agreement.
Key areas of expertise that leaders within the University must cultivate, both internally and with a team of Technical Advisors, include:
Cultural and institutional: Consensus-building, communications, and partnerships to identify objectives, align on goals, and inculcate an understanding of the new delivery model
Legal: Proficiency in in a complex and new real estate transaction
Financial: University funding, debt service, return-on-investment (ROI) analysis
Design and Engineering: Campus place-making and systems performance that identifies and delivers on social, economic, and environmental sustainability goals
Construction: Decision-making to maintain value and quality within budget and schedule parameters
Operations and maintenance: Performance over time, training of staff to achieve highest performance