How strategic public-private partnerships are shaping up in cities

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This is second in a series on the role of public-private partnerships in realizing smart, sustainable cities, systems and industries.

Public-private partnerships (PPPs) fall into four key types: operating partnerships; advisory committees; project partnerships; and strategic partnerships. Of these, the most potent and long-ranging partnerships are strategic. Although they may begin with a single project, they ultimately provide a platform capable of generating new projects with the potential to achieve far-reaching impacts over time.

This article describes the high-level shaping of strategic partnerships in cities — reviewing the organizing approaches of several successful strategic platforms, and pointing to the first key partners to turn to.

Organizing models for strategic partnership

Strategic approaches to PPP development typically require the creation of a partnership organization. The platform that results effectively can become a PPP-generating machine.

Envision Charlotte’s public-private-plus collaborative formed a nonprofit organization to anchor its efforts. "We created a neutral platform to allow us to structure a win-win for everyone," executive director Amy Aussieker explained. It also offers protection. Since its founding in 2010, Charlotte has had six mayors, although this organization has persisted across mayors and even private-sector CEOs. "Though this was not the reason for forming a nonprofit, in hindsight it was a benefit," she said.

The first-of-its-kind PPP platform for Smart City development, Envision Charlotte has become a model for others. Its first partners included local utility Duke Energy, technology company Cisco Systems and Charlotte Center City, a nonprofit that promotes the development of Charlotte’s urban core. In its mission to improve sustainability around energy, air, water and waste, it gathered additional partners, including local banks and other businesses, technology and services company Itron, engineering firm CH2M Hill, network provider Verizon, waste-management specialist Enevo and the University of North Carolina-Charlotte. Most recently, it created a citizen-focused ECO Network to extend its sustainability goals deeper into the community.

Indeed, citizen engagement is a secret sauce to help smart city evolution perform for all stakeholders.

An organizing approach developed by Envision Utah has been replicated by dozens of regions around the United States. Envision Utah is a nonprofit public-private partnership that engages community stakeholders from a statewide umbrella, whose goal is "empowering people to create the communities they want." It acts as a neutral facilitator, bringing together residents, elected officials, developers, conservationists, business leaders and other interested parties to make informed decisions about how Utah should grow.

This has resulted in a Quality Growth Strategy and a growth-planning toolkit designed for use by civic leaders, businesses and the public at large. These tools can be used to inform an implementation pathway for a range of multi-player partnerships.

More recently, the KCMO Smart City initiative in Kansas City, Missouri, is testing a novel model for organizing a PPP: to procure a private-sector partner to join them and lead the effort. After building out an initial smart-city platform along a free downtown streetcar line (via initial PPP activity involving Cisco, Sprint and Think Big Partners), it is fielding a Request for Proposals (RFP) to recruit a lead PPP partner to expand its Smart City program.

The prime partner is visualized as either a nonprofit consortium or a for-profit firm, which has demonstrated that it can build an extensive suite of capabilities and manage a partnership of public and private players, including community partners and stakeholders. This PPP-leading organization’s scope will include the creation of new business models that can sustain the smart-city projects and sustain the PPP.

Kansas City Chief Innovation Officer Bob Bennett explained: "KCMO has assets in play that we are bringing to the table: fiber and pre-coordinated access to assets. We will collaboratively build out the array of initiatives so that the city improves the lives of its people and our partner succeeds."

A city's first partners: utilities

Smart, sustainable cities depend on reliable and resilient energy systems. Jesse Berst, chairman of the Smart Cities Council, urges cities interested in starting a smart cities program to partner first with their local electric utility company. To that end, the council and the Edison Electric Institute formed a joint initiative, Electric Companies Advancing Cities; its task force is holding three city-utility summits in 2018, culminating with a playbook to capture best practices and case studies.

Aussieker of Envision Charlotte agrees that utilities are natural partners to cities. "Most cities have a public utility, which owns assets outside the city. So, if the city doesn’t engage with that utility, how can you get to a sustainable [model]?" To illuminate the point: "Duke Energy [in Charlotte] owns the light poles while the city owns the right of way and leases the poles." In addition, "You need to partner with your utility to act on a goal of 100 percent renewable energy." Do you need to form a PPP for that? "No, but if you do you will be a lot more successful."

Envision Utah is following precisely that path. Salt Lake City is in a region whose climate is warming more than twice as fast as the national average, negatively affecting water reserves and air quality. Led by the findings of Envision’s Utah’s citizen survey, the region is responding with urgency, and is partnering with its local utility Rocky Mountain Power. Envision has drafted a plan to acquire all the community's electricity from renewable sources by 2032, reducing emissions, saving water and improving air quality in the process.

Communications network providers represent another potential utility partner with a natural role to play within smart cities. Partnership examples include communications projects such as New York City’s street-facing LinkNYC, built in partnership with the CityBridge consortium (there’s Google inside); and Huntsville, Alabama’s unique network build-out partnership with Google Fiber. In contrast, Chattanooga’s game-changing municipal Internet the Gig was built alone when incumbent private partners were not ready to step up their play.

The lesson for utility providers: Don’t play with the public sector at your own risk.

The next article in this series will expand on the diverse roles to be played in a potent public-private partnership.

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