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Raleigh, N.C., Considers Public-Private Partnerships for Improving Infrastructure

City staff and council members are crafting criteria for companies that want to enter cost-sharing projects with the city.

by Paul A. Specht, The News & Observer (Raleigh, N.C.) / January 17, 2017
David Kidd/e.Republic

(TNS) — A large local developer wants to pay its way to the top of the city’s list of sidewalks to build.

Raleigh-based Highwoods Properties, which is the biggest office landlord in the Triangle, wants a sidewalk along Highwoods Boulevard between Atlantic Avenue and Capital Boulevard, but doesn’t want to pay for the entire project on its own. So the company is seeking help from the city, which has a sidewalk-building program.

The problem for Highwoods: Raleigh’s program doesn’t see the street, just outside the Beltline in North Raleigh, as a priority, ranking Highwoods Boulevard 123 on its list of 217 city streets that need pedestrian improvements. At its current pace, the city likely wouldn’t get around to building the sidewalks itself for about a decade.

Now, Raleigh city council members are considering not only Highwoods’ proposal – to share the $600,000 construction expense, as well as undetermined design and land acquisition costs – but how they should respond when offered a chance to enter a public-private partnership. Raleigh has no official guidelines or criteria for entering such partnerships. The city enters them, but not on a regular basis and hardly – if ever – in reference to a sidewalk.

“I think there’s sensitivity around the whole issue,” Mayor Nancy McFarlane said.

“We don’t want people with money to go to the top (of a list) just because they can afford it,” McFarlane said. “On the other hand, we want free money.”

City staff and council members are now on their way to crafting criteria for companies that want to enter cost-sharing projects with the city. They held a meeting Tuesday, when staff proposed that private proposals meet at least five of 11 measures to be eligible for city funding.

Proposals could enhance the city’s transit plan, support safe routes to schools, improve access to public amenities or be within a quarter-mile of affordable housing, among other criteria.

“The theory globally around public-private partnerships is that public money leverages private contributions to meet public policy goals,” said Ruffin Hall, the city manager.

Some council members like the idea.

“We don't have enough resources to build all the infrastructure we need,” Councilwoman Mary-Ann Baldwin said.

“This is one tool we can use to meet our growing community’s needs,” she added. “But we need to ensure we have good policy surrounding it and provide additional sidewalk funding through a transportation bond.”

While Raleigh’s connectivity is improving, the city still has many sidewalk needs. Smart Growth America, an organization that rates the safety of a city’s transportation options, recently rated Raleigh as the 27th most dangerous U.S. city.

That number is better than 6th worst in 2009. But the city hasn’t budgeted the amount of money it needs to address its most pressing issues.

The city has only $2.9 million of the $7 million it needs to complete all of the top 11 sidewalk projects currently in the design process, said Eric Lamb, the city’s transportation planning manager. His presentation, delivered to city leaders Tuesday, concerned Councilwoman Kay Crowder.

“At some point in time we have to get serious about getting sidewalks done and paying for them,” Crowder said. “Obviously, we have to figure out a different revenue stream.”

Crowder is among several council members worried that entering public-private partnerships to build sidewalks could unfairly favor rich communities. Councilman Corey Branch, who represents Southeast Raleigh, said he would support such deals only if they don’t affect Raleigh’s sidewalk building program, which places priority on streets with high vehicle and pedestrian traffic, among other considerations.

“My major issue is how it impacts those sidewalks who are already on the list,” Branch said. “There’s still a lot to discuss.”

Highwoods isn’t the only company watching and waiting as Raleigh leaders develop a policy on partnerships.

Kimberly Development Group plans to build about 25 condominiums near the intersection of Oberlin Road and Van Dyke Avenue. Raleigh’s codes call for developers to widen the road to three lanes. But the development is located in a historic area, and developers could preserve more properties by building a roundabout instead of widening the road.

Kimberly would consider building the roundabout, which costs a little more than the $1.4 million lane-widening plan, if the city helped pay for it.

“It’s difficult to make left turns onto side streets during off hours,” said Michael Birch, Kimberly’s spokesman.

On Tuesday, council members seemed more receptive to Kimberly’s proposal than that of Highwoods. Highwoods representatives didn’t return calls or emails seeking comment.

Council members raised their eyebrows at the Highwoods’ proposal because it requires Raleigh to acquire the needed right of way, caps Highwoods’ participation at $300,000, adds side streets to the plan and calls for including businessman Dean Debnam to be a third-party lender. Debnam runs Raleigh-based Public Policy Polling, also located on Highwoods Boulevard. Debnam has offered to “front the remaining cost of the project with payback by the city within five years,” according to a city document.

“Are we still being sued by Mr. Debnam?” McFarlane asked during the meeting.

Debnam’s group, Boylan Pearce Building LLC, last year sued the city for placing a 5-story height cap on his property at 216 Fayetteville St. in downtown Raleigh.

That lawsuit is, indeed, still pending, city attorney Tom McCormick said.

©2017 The News & Observer (Raleigh, N.C.) Distributed by Tribune Content Agency, LLC.

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