Transcript Presentation Template

experts in public + private partnerships
Kosmont Companies
Real Estate and Economic Advisory
Renaissance Community Fund
Revitalization & Development Projects
865 S Figueroa St. 35th Floor, Los Angeles, California 90017 ph 213.417.3300 fx 213.417.3311
www.kosmont.com
Presentation to the CALED Conference
Thursday, August 11, 2011
Collaborative Economic
Development
Wil Soholt
Senior Vice President
Kosmont Companies
Overview
• Kosmont Companies Profile
• The Public Entity
• The Private Entity
• Sources of Synergy in Partnerships
• Examples
• Conclusions
3
Summary
“Public” entities and “Private” entities can
achieve results in both parties interest better
than either party alone by using or supporting
the unique skills, needs, resources, and
appetites of the other.
4
The Original Public/Private Partnership
I will bring
you jobs,
sales tax,
property tax,
economic
development,
prosperity
and abundant
sunshine.
OKAY!
Trust me.
5
(Purportedly an Actual Picture)
5
Kosmont Companies Profile
• Public/Private Transactions
• Focus on Real Estate & Economic Development
• Trusted advisors since 1986
• Staff has experience in both public and private
sectors
• Has broad experience in facilitating
transactions in a variety of market conditions
6
The Public Entity
• Likes stability / consistent growth in revenues
• Traditionally slower in adapting to best
practices (but this is changing)
• Is hurting from recent cyclical cuts
• Earns tax revenues from new ventures
• Traditionally has access to inexpensive capital
and grants
• Is usually willing to give up upside to protect
downside
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The Private Entity
• Demands growth in revenues
• Establishes best practices to survive
• Creative, problem anticipating and solving
entrepreneurial spirit expands the profit margin
• Traditionally more risk tolerant, but likes to
protect the downside
• Established firms have access to capital
• May be nimble from recent market cycle, on the
sidelines, and looking for investment
opportunities
8
Sources of Synergy
• Knowledge of best practices
• Access to capital
• Sharing of new / incremental Tax
Revenues
• Differencing risk tolerance
• Other?
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Example - Retail Developments
A Variety of Retail Re / Developments
• City:
– Desire for / access to new tax revenues
– Access to differing financing sources
• Developer:
– Development expertise
– Operational expertise
– Tolerance for development risk
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Example - Norco Silverlakes
128 Acre Equestrian and Sports Park
• City:
– Property
– Public Improvements
– Market / Demand
• Developer:
– Operational Expertise
– Capital For Improvements
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Example - Hotel Development
New Hotel Development
• City:
– Owns portions of property
– Willingness to put incremental tax revenue at risk
• Developer:
– Entrepreneurial
– Willingness to work with alternative financing
structures
12
Conclusions
• Understand the differing needs of
each party
• Structure collaboration to support
the needs of each party
• Bringing new ideas or structures can
be difficult, but yield results
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www.kosmont.com
DISCLAIMER: Kosmont & Associates, Inc., doing business as Kosmont Companies has prepared the above based
on a review of available documents and information in the public realm. The information provided is not a substitute
for professional advice in the relevant area being addressed. Kosmont Companies does not guarantee the reliability
of any information provided herein. Presentation of this information is not intended to create, and receipt of this
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information does not constitute a professional client relationship.