Alaska’s communities stand at a unique crossroads, balanced between the rugged beauty of the mountains and sea and the pressing needs of the residents that call those mountains home. While local leaders face immense pressure to maintain critical infrastructure and expand affordable housing for both year-round residents, seasonal visitors and tourists, a new era of community building is taking shape. Rather than allowing complex financial and development hurdles to stall progress, municipal leaders are increasingly embracing public-private partnerships (P3s) to turn vision into reality.
This shift marks a historic evolution in Alaska’s development. By strategically leveraging private expertise and investment alongside public goals, cities are finding innovative ways to build their communities now, not later.
- Fund Resilient Infrastructure: Modernizing ports, utilities, and transportation systems that can withstand some of the harshest conditions in the country.
- Incentivize Housing: Initiatives like the Last Frontier Housing Initiative demonstrate how public-private collaboration can successfully unlock land and resources for statewide construction.
- Enhance Quality of Life: Ensuring that essential services – from reliable energy to vibrant public spaces – remain a reality for all Alaskans.
While these partnerships require careful navigation of costs and risks, they are a powerful tool poised to revitalize the face of Alaska’s communities and ensure a thriving future for generations to come.
However, despite the use of P3s in Alaska communities, there is a notable lack of formal P3 programs, laws, and guidelines by Alaska municipalities. Further, many of these projects are developed without first consulting seasoned developers, experienced legal counsel, and industry experts.
For P3s to truly meet the needs of Alaska municipalities and their residents and visitors while complying with relevant laws and regulations, these programs will need legal review and input from public and private land use, construction, and development experts. Further, the long-term success of these programs and the ability to avoid unintended consequences will depend in part on the deliberate development of program parameters and guidelines.
Perhaps the first step in the responsible and effective use of P3s is increasing the understanding of what P3s are and the options available to build, maintain, and invest in infrastructure and other community projects. Many communities are engaging in P3s on a small scale but often are unaware that the relationships created even constitute P3s. As a result, opportunities are often lost for fully maximizing investment and expertise from the private sector or in developing a more long-term mutually beneficial relationship between private enterprise and public partners.
P3s are often available for a wide variety of projects, including but not limited to construction and operation of public facilities like recreational centers, airports, ferries, and transportation terminals, art installations and museums, sports teams and facilities, parking and parking meters, technology infrastructure and services, utility facilities and services, childcare facilities, housing projects, and the general improvements on publicly-owned land.
For example, if an Alaska community developed without a main street or walkable area but owned land within its boundaries, it could partner with a private developer to conceptualize, design, build, and even lease and/or sell the developed lots or manage public facilities along the new stretch. The speed and efficiency of the development of a new “main street” using PPPs could potentially far outpace the development of a “main street” through the use of more traditional tools such as those funded by municipal bonds or regulated by changes to zoning laws.
While the possibilities of P3s are endless, there are many legal considerations that face communities, with implications under employment, procurement, tax, constitutional, and countless other federal and state laws. In Alaska, most communities have not traditionally or at least formally entered P3s and thus do not have guidelines and procedures for entering such partnerships.
Before using P3s as a tool, communities would benefit from adopting guidelines that make it clear to private entities, the public, administration, and governing bodies the provisions and expectations that apply to all P3s within that jurisdiction. Over the last decade, communities outside of Alaska have started adopting such guidelines. The City of Alexandria, VA, adopted the Public-Private Education Facilities and Infrastructure Act of 2002. That Act, and its accompanying guidelines, provides specific procedures for the solicitation and proposal of PPPs and even provides for unsolicited proposals by private entities. Alexandria even requires its city manager to create a project specific P3 advisory committee to evaluate P3 proposals that were not solicited by the city. While a fee is charged for consideration of unsolicited P3 proposals, the structure is in place to nurture and encourage the submission of ideas for the City of Alexandria’s consideration.
In addition to guidelines, municipalities should consider the need for new laws that make the parameters and procurement of P3s clear and may want to consider lobbying for changes to Alaska Statutes that would resolve any ambiguities regarding the roles, authority, and limitations imposed on a municipality and private entities when entering a P3.
In addition to adopting guidelines and laws that clarify the parameters of P3s between local communities and the private sector, municipal leaders may may also consider the interplay of P3s with other municipal laws, obligations, and authority. For example, how is a proposal for mixed use development of ocean front property in a community impacted by existing zoning laws and district boundaries?
Finally, communities considering P3s should ensure that the governing documents for such P3s are reviewed and considered by legal counsel. These agreements often span decades and some are designed to continue in perpetuity. The terms must anticipate both the essential terms of the partnership as well as the unintended long-term implications of a newly formed relationship between a public entity subject to the constitutional protections under the United States and Alaska constitutions, and a private entity, often with fiduciary obligations.
There are elements of competition, private and public investment, ownership changes, bankruptcy laws, taxation, and so much more that require consideration by knowledgeable legal counsel. Many of these considerations may fall beyond the expertise of the municipal attorney’s office and its expertise in governance and government action.
While P3s undoubtedly have an important and promising role to play in the future development of Alaska communities large and small, the success and effectiveness of these partnerships will depend on the willingness and ability for communities to invest time, funding, and expertise in developing clear and informed P3 programs, laws, and policies.