experts in public + private partnerships

Real Estate and Economic Advisory

865 S Figueroa St. 35th Floor, Los Angeles, California 90017 ph 213.417.3300 fx 213.417.3311 www.kosmont.com

Kosmont Companies Renaissance Community FundRevitalization & Development Projects

Wil SoholtSenior Vice PresidentKosmont Companies

Collaborative Economic

Development

Presentation to the CALED Conference

Thursday, August 11, 2011

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Overview

• Kosmont Companies Profile

• The Public Entity

• The Private Entity

• Sources of Synergy in Partnerships

• Examples

• Conclusions

4

Summary

“Public” entities and “Private” entities can

achieve results in both parties interest better

than either party alone by using or supporting

the unique skills, needs, resources, and

appetites of the other.

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The Original Public/Private Partnership

5

I will bring you jobs, sales tax,

property tax, economic

development, prosperity

and abundant sunshine.

Trust me.

OKAY!

(Purportedly an Actual Picture)

6

Kosmont Companies Profile

• Public/Private Transactions

• Focus on Real Estate & Economic Development

• Trusted advisors since 1986

• Staff has experience in both public and private sectors

• Has broad experience in facilitating transactions in a variety of market conditions

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The Public Entity• Likes stability / consistent growth in revenues

• Traditionally slower in adapting to best practices (but this is changing)

• Is hurting from recent cyclical cuts

• Earns tax revenues from new ventures

• Traditionally has access to inexpensive capital and grants

• Is usually willing to give up upside to protect downside

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The Private Entity• Demands growth in revenues

• Establishes best practices to survive

• Creative, problem anticipating and solving entrepreneurial spirit expands the profit margin

• Traditionally more risk tolerant, but likes to protect the downside

• Established firms have access to capital

• May be nimble from recent market cycle, on the sidelines, and looking for investment opportunities

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Sources of Synergy

• Knowledge of best practices

• Access to capital

• Sharing of new / incremental Tax Revenues

• Differencing risk tolerance

• Other?

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Example - Retail Developments

A Variety of Retail Re / Developments

• City:– Desire for / access to new tax revenues

– Access to differing financing sources

• Developer:– Development expertise

– Operational expertise

– Tolerance for development risk

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Example - Norco Silverlakes

128 Acre Equestrian and Sports Park

• City:– Property

– Public Improvements

– Market / Demand

• Developer:– Operational Expertise

– Capital For Improvements

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Example - Hotel Development

New Hotel Development

• City:– Owns portions of property

– Willingness to put incremental tax revenue at risk

• Developer:– Entrepreneurial

– Willingness to work with alternative financing structures

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Conclusions

• Understand the differing needs of each party

• Structure collaboration to support the needs of each party

• Bringing new ideas or structures can be difficult, but yield results

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DISCLAIMER:  Kosmont & Associates, Inc., doing business as Kosmont Companies has prepared the above based on a review of available documents and information in the public realm.  The information provided is not a substitute for professional advice in the relevant area being addressed.  Kosmont Companies does not guarantee the reliability of any information provided herein.  Presentation of this information is not intended to create, and receipt of this information does not constitute a professional client relationship.