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www.HartfordBusiness.com • March 4, 2019 • Hartford Business Journal 13 He said transparency is key in P3 deals, as they often face scrutiny from the public and lawmakers. While PPPs have often focused on tolls in other states, Mounds said Lamont has his eye on a broader array of projects. Lamont's bill is likely headed to a public hearing in the next few weeks in the Government Administration and Elections Committee. Committee co-Chair Mae Flexer (D- Killingly) said there's a "delicate balance" to strike in any consideration of P3s. "Clearly we've got to do more to get the law working as it was envisioned when it was first drafted, and the state needs private investment in a variety of areas," Flexer said. "At the same time, we've got to make sure we're good stew- ards of public dollars and we've got to make sure there are public protections and oversight of these projects." Whether Lamont's proposed tweaks will open the floodgates for P3s in Con- necticut remains to be seen. Lamont's bill would alter pieces of the current law, including removing provisions that limit a P3's lifespan to 50 years and cap the amount of state fund- ing for a given P3 project at 25 percent. Neither of those restrictions are cur- rently a major roadblock, said Michael Freimuth, executive director of the Capi- tal Region Development Authority, which has been looking for a P3-type arrange- ment to renovate XL Center in Hartford. "But they were unnecessary hurdles, and we're trying to attract capital, not frustrate it," he said. Lamont's bill may not be a panacea for the XL Center, which is in need of a major over- haul or rebuild, according to Freimuth. "However we change the law, the economics need to make sense and this will remain a challenge for private investors to achieve the desired ROI on their mon- ies for projects like the XL Center," Freimuth said. However, he said a change to the P3 law could bring potential for the rundown Hartford Regional Market, which CRDA is now in charge of, after a recent legislative directive. CRDA last year sought redevelop- ment proposals for the rundown Regional Market, receiving two, from FreshPoint and Sardilli Pro- duce & Dairy Co. Freimuth said quasi-public agencies like his have a bit more flexibility than regular state agencies when it comes to PPPs, but there are still limitations. He called Lamont's propos- al a "significant upgrade" to the state's public-private partnership statute. Availability payments If Connecticut lawmakers can pass a game-changing bill, it'd likely allow for what are known as "availability pay- ments," said PwC's Siders. "They de-risk the investment for a private investor," he said. To understand availability pay- ments, take the example of a road con- struction project whose main revenue stream is tolls. According to the federal transpor- tation department, a tolled "conces- sions model" would allow a private investor to build the road and then be repaid via tolls revenue. The devel- oper would bank on its traffic projec- tions being accurate, taking a finan- cial hit if they're overly optimistic and toll revenues come in lower than expected. Under an availability payments model, the investor isn't dependent on toll revenue. Instead the state would agree to make periodic payments to the investor based on a set of agreed upon performance specs for the road. The state would keep the toll revenue, and the associated risks of variance if projections are off. Approximately half of P3s in the U.S. over the last decade use the availabil- ity payments structure, according to the not-for-profit In The Public Inter- est (ITPI), and the pace has quickened in recent years, according to Siders. Availability payments have downsides, according to ITPI, which warns public of- ficials that they are still long-term finan- cial commitments that can carry serious future budget implications. Darin Siders, Partner, PwC Mae Flexer, Co- Chair, Government Administration and Elections Committee A public-private partnership could help with redevelopment plans for the Hartford Regional Market. RENDERING | CONTRIBUTED A D V O C A C Y W R I T I N G | C O N T E N T D E V E L O P M E N T | M E D I A R E L A T I O N S C R I S I S C O M M U N I C A T I O N S | P R O J E C T M A N A G E M E N T w w w . c t b y t h e n u m b e r s . n e w s info@express-strategies.com | 860.729.3021 w w w . e x p r e s s - s t r a t e g i e s . c o m F o l l o w @ C T n u m b e r s | S u b s c r i b e T o d a y ! E V E R Y N U M B E R T E L L S A S T O R Y N e w s e v e r y w e e k d a y m o r n i n g , p e r s p e C T i v e o n w e e k e n d s . 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