Public-Private Partnership (P3)
Meeting public needs with private expertise.
A P3 ALLOWS PUBLIC ENTITIES TO BENEFIT FROM DEPENDABLE FACILITIES WHILE THE DEVELOPMENT, CONSTRUCTION AND MAINTENANCE ARE MANAGED PRIVATELY.
Public-Private Partnership (P3): Allows a private developer to design, build, finance, own, and maintain the building for a set period of time. Once the bidding process has concluded, the selected bidder is responsible for all risks and cost structures for the project. The public entity will sign a long-term lease on the property, and at the end of the lease the property and assets will transfer to the university.
As the largest P3 developer in Kentucky, Red Draw has developed 2 350,000+ sq ft office buildings for the Commonwealth that they simultaneously manage in-house. Operating and maintaining the facilities throughout each project’s lease term ensures every P3 Red Draw development will stand the test of time, providing superior learning and working environments for years to come.
HOW IT WORKS
P3s work by allowing a private developer to design, build, finance, own, and maintain the building for a set period of time. The P3 process transfers all risk to the developer for project financing, construction performance, and long-term maintenance. The private developer must deliver the project on time and within budget and assume the associated risks. In addition, P3s are financed by the developer so that the balance sheet of the public entity is not affected as it would be by direct funding. The public entity instead has a leasehold interest in the asset in its entirety.
A comprehensive design plan is developed based on the needs of the public entity, spanning from site work to a detailed review of all aspects of the project.
A customized financial and construction program is created based on the public entity’s needs, budget and timeline.
The project is constructed within the agreed upon timeline and budget.
The asset is leased back to the public entity for a predetermined timeframe, based on the entity’s needs.
Red Draw manages all maintenance and repairs during the lease period to preserve the integrity of the project over the life of the lease term.
After the lease period, ownership of the space will be transferred to the public entity.