Social infrastructure investment looks to be back on the cards, with P3s very much in the mix.
Across a five-day period in May, three university P3 projects in Tennessee alone came to market. As a state, Tennessee is fast becoming one of the key locations for P3s, with its governor Bill Lee having recently signed new legislation that will allow for the use of P3s to deliver new road infrastructure.
However, the state is not alone when it comes to its universities looking to deliver new facilities and accommodation via the P3 model: earlier in May the University of Wisconsin issued a request for qualifications for a private partner to develop a mixed-use facility including new sports facilities.
The deals are also a potential reflection that the market has overcome the fears that may have been around during the early days of the Covid-19 pandemic, when students were forced to stay at home and some questioned whether online learning might be the future - saving students money by allowing them to work from their parents’ homes.
Clearly, that is not the student experience that many young people were looking for, and they have returned in numbers that mean universities have the confidence to invest for the future.
One thing that universities cannot get past, however, is the clear drop in demographics, which will see the number of young people leaving school fall significantly across the US over the coming years. While many universities will look to attract overseas students, there can be no doubt that there will be an overall tightening of student numbers, therefore creating a greater level of competition between institutions.
This may, however, be behind the decisions of some universities to invest now, on the basis that they will need to have high standards of facilities to attract the best students, who will find themselves in greater demand than their predecessors simply because there are fewer of them. Offering a holistic, high quality campus experience can go a long way to convincing a student where they should spend the next years of their lives.
Excitingly for the P3 industry, however, it is not just in the university space that social infrastructure is starting to access the potential that the P3 model has to offer.
Regeneration projects are increasingly emerging, with the private sector being sought to partner with the public authority to deliver a range of facilities, from a new library and museum in New Hanover County, to a medical center and office in Person County (both, as it happens, in North Carolina).
In most of these cases, the proposition includes new housing facilities alongside the public sector facilities, and can also involve a range of commercial and retail units in the mix, as is being considered in the City of Dunsmuir, California.
Courthouses were once seen as the greatest way into social infrastructure for the P3 sector, thanks in no small part to the successes of projects such as the Travis County courts scheme in Texas, and Maryland’s Howard County Courthouse P3.
More recently, we’ve seen the Clackamas Courthouse in Oregon reach financial close and there are signs that others will look to follow in the footsteps of those successes. In May, Charles County in Maryland took the opportunity to receive a presentation from those involved in the nearby Howard County project, to see what lessons could be learned for its own plans.
We are therefore seeing a clear range of opportunity emerging across the social infrastructure sphere, which should give confidence to an industry that has long bemoaned the need to consider using P3 models for more than large transport projects. And with investors increasingly on the lookout for smaller deals, social infrastructure projects will fit the bill nicely.