This document summarizes different models for regeneration delivery including public-private partnerships. It discusses models such as LABVs, LIBVs, co-investment funds, ESCOs/MUSCOs, and tax increment financing. The key points are that different structures are needed for different situations, what works well for some may not for others, public-private risk sharing is essential, and just because a model is complex does not mean it is not viable. The document provides overviews of the various models and their benefits and drawbacks at a high level.

1. ANDREW LUDIMAN
DIRECTOR OF CONSULTANCY
JONES LANG LASALLE

2. Models of regeneration delivery
Andrew Ludiman
Director- Strategic Consultancy

3. The New Frontier
• Changing financial and economic environment
- Grant funding
- Debt finance
- Speculative development
• Changing policy context
- Localism
- General power of competency
Always been a need for public : private working - but how
it takes place is changing
3

4. Emerging Delivery Structures
TIF
First Development LIBV
LABV agreements
ESCO / MUSCOs
Co-investment
funds
2000 Today
4

5. The LABV
Public Sector Property
Private Sector
Development
Assets – Skills & Cash
investment and
development
3rd Party
LABV Debt
Regeneration Development Investment
Renewables
Projects Projects Assets
5

6. The LABV
The Bad
6

7. LIBV – a new LABV!
Property
Public Sector Private Sector
Equity committed
(working capital and
development equity)
Deposit on grant of
Option (% of MPP)
3rd Party
LIBV Debt
Repayment of balance (less deposit paid)
of value asset portfolio (recalculated on
drawdown) on satisfaction of conditional
contract
Development Equity Sale proceeds
Regeneration Development Investment
Renewables
Projects Projects Assets
7

8. LIBV – a new LABV!
The Good
8

9. Co-investment fund
European Funding
New Homes Bonus
Prudential Borrowing
Public Sector Private Sector
Other
CoIF
1 2 3 4
Investment projects
9

10. Co-investment fund
The Good
10

11. ESCO / MUSCOs
ESCO
Service charges (or MUSCO)
Investment
Private Sector Investor
Occupiers/ Development
Project Private Sector Developer
tenants
Building
Infrastructure (utility)
11

12. ESCO / MUSCO Partnership
Land ESCO
Landowner £ (+DM Services) (or MUSCO)
Investor
Land value
+ reinvestment towards s106
+ Regeneration benefits JV Co
Procure relevant Coupon and finance fees
works/services to provide + % of sales proceeds
upfront infrastructure
Procure Relevant Works / Services to provide
Sale proceeds Upfront Infrastructure and Planning
Land Land Land Land
Parcel Parcel Parcel Parcel
1 2 3 4
12

13. ESCO / MUSCO Partnership
The Good
13

14. Return differentiation model
Land £
Oxford City Co-investment
Council Partner
Possible
Prudential
Borrowing
Potential land value /
reinvestment towards
Return on investment and
s.106 / wider regeneration share of sales proceeds
benefits JV Co
Procure Relevant Works / Services to provide
Sale proceeds Upfront Infrastructure and Planning
Land Land Land Land
Parcel Parcel Parcel Parcel
1 2 3 4
14

15. Return differentiation model
The Ugly
15

16. Tax Increment Financing
Annual
Tax Increment
Taxes (used to service debt) New Tax Base
Generated (to taxing
Existing Tax Base jurisdiction)
(frozen at start of project and
continues to taxing jurisdiction)
c. 20 – 30 years
16

17. Tax Increment Financing
The Good
17

18. Summary
• Different structures for different needs – form must follow function
• What’s Good for some are Bad for others!
• Public private joint risk sharing essential
• Just because its ugly doesn’t mean its bad
18

19. QUESTIONS
COPYRIGHT © JONES LANG LASALLE IP, INC. 2010