P3 projects a good fit for Peterborough

The new Louis St. urban park that city council approved Monday night is a forwardthinking project in its own right.

A dumpy parking lot will will be transformed into an all-season downtown meeting place linked to the equally forward-thinking redevelopment of Bethune and Charlotte streets.

But there is another intriguing aspect to the $5.5 million project.

The city bought the former Shish-Kabob Hut restaurant at the King St. end of the lot planning to replace it with a building housing public washrooms, storage and office space.

Now a new wrinkle has been added. The building is to be developed using the publicprivate partnership, or P3, model. It could be up to six-storeys high with apartments or condominiums on the upper floors.

P3 municipal infrastructure is a hot trend among larger cities. Saskatoon completed its first P3 earlier this year, a $154 million transit and public works centre designed, financed and built by a private company that will operate it for 25 years.

Also this year, Edmonton accepted a $2.7 billion P3 bid for a new Light Rapid Transit (LRT) line.

And the federal Liberal government originally indicated any project financed through its $125 billion infrastructure fund would have to be P3. Most will still go that way.

A P3 building at the Louis St. park would be a first here. It would also be low-risk. Only the first-floor section would actually provide municipal services. Everything else would be more of a conventional private sector development, intended to make money.

Up-front construction costs for P3s can be higher because the private company assumes the risks of overruns and construction delays and has higher borrowing costs than a municipality would. Critics also say longterm operating costs to taxpayers are often hidden.

However, a recent study by the Ivey School of Business at Western University found P3s are lower-cost in the long run. Governments have less incentive to be efficient since they don’t have to make money and political goals can get in the way, leading to poor decision making.

The Louis St. building represents a chance for Peterborough to test the P3 waters and develop some expertise before taking on a bigger project.

An enticing target for Step 2 would be the new downtown arena and entertainment facility that Mayor Daryl Bennett and a variety of other supporters – including the Peterborough Petes – are promoting on the current city transit yard property.

A P3 build-and-operate model is enticing. The city could spread out construction costs in the $75 million range and shift operating responsibility to a professional entertainment manager.

And, bonus, millions of dollars in federal/ provincial infrastructure funding would be more likely to materialize.