Voting for a Public Private Partnership: Change Agent Kniech

Change Agent: Robin Kniech, Denver City Councilwoman

Expected to be completed by 2021,

the project will not involve the use of any taxpayer dollars. It’s slated to create 400 to 450 construction jobs, more than 800 permanent jobs and generate an additional $3.5 million in annual taxes and general fund revenue for Denver.

When the City Council of Denver signed off last August on the $1.8 billion public-private partnership deal to update Denver International Airport’s Jeppesen terminal, Councilwoman Robin Kniech voted yes.

But she did it with an element of caution.

“There are legitimate concerns about giving up control of a public asset,” Kniech said. “It’s important to retain public ownership. Period,” she said. “Also, there are concerns about risks and failures.”

After reviewing the contract, hearing from her constituents, and meeting with the private partners, Kniech determined that while perhaps not perfect, the deal was satisfactory.

In particular, it addresses her concerns that the city retains ownership of the terminal and the private partners only design, build, and finance it. That they be required to follow the city’s contract standards, especially with regard to minority sub-contracting and creating local job opportunities during the project design, construction, and management phases.

“I am satisfied that we have the ownership and the ordinances to protect the community,” she asserted.

Following years of misgivings about such deals, Kniech is among a growing number of lawmakers warming up to public partnership with private entities, commonly known as P3s, to build public infrastructure projects.

P3 fell out of favor in the early days when it was tied to tolling, at a time when public resistance was strong against anything perceived as an added tax or fee.

Click here to see the list of 10 notable P3 projects in the US

Today, not all P3s involve taxpayer dollars.

DIA’s 34-year P3 structure calls for the private entities, led by Madrid-based Ferrovial Airports and Centennial, CO – based Saunders Construction, to renovate the Jeppesen terminal and  manage the security and concessions. The newly renovated facility will accommodate 80 million passengers annually.

Robin Kniech, Denver City Councilwoman

Expected to be completed by 2021, the project will not involve the use of any taxpayer dollars. It’s slated to create 400 to 450 construction jobs, more than 800 permanent jobs and generate an additional $3.5 million in annual taxes and general fund revenue for Denver.

The private partners will be repaid for their initial investment with 20 percent of concession revenues and payments from the airport. The airport will fund its costs through revenue bonds, cash reserves, and other sources.

For Kniech, the first open member of the LGBT community to serve on the City Council, it was important to ensure the DIA deal was “equitable” and aligned with the city’s rich history of investing in civic infrastructure to fuel economic growth.”

If she ever were to vote for another P3 project in the future, Kniech said she would do things differently:

First, she would insist on a “Value for Money” analysis by an independent, third party to obtain better insight of the city’s gains. Second, she would seek regular briefings with the private partners.

“Investment in infrastructure is not just about dedicating resources toward the construction of an asset,” Kniech said. “It is about stimulating the local economy, creating jobs, and building equitable assets which improve the quality of life of the community.”

“I’d love for Denver to be perceived as a city that is prudent and progressive when it comes to investing in infrastructure.”

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