WHITE HOUSE FACT SHEET ON 21ST CENTURY INFRASTRUCTURE

FROM:  THE WHITE HOUSE

FACT SHEET: Building a 21st Century Infrastructure: Increasing Public and Private Collaboration with the Build America Investment Initiative

Today, the President will deliver remarks at the Port of Wilmington in front of the I-495 Bridge in Delaware. With 90,000 cars moving over it per day before repairs began, this bridge is a key example of the importance of infrastructure, which keeps the economy moving, spurs innovation, and bolsters our national competitiveness. At the port – and in this Year of Action – the President will announce a new executive action to create the Build America Investment Initiative, a government-wide initiative to increase infrastructure investment and economic growth. As part of the Initiative, the Administration is launching the Build America Transportation Investment Center – housed at the Department of Transportation – to serve as a one-stop shop for cities and states seeking to use innovative financing and partnerships with the private sector to support transportation infrastructure.

The President’s visit and announcement today are a part of the Administration’s continued push to highlight the importance of investing in our nation’s infrastructure so that we can build on the progress our economy is making by creating jobs and expanding opportunity for all hardworking Americans. The steps announced today continue the momentum the President has made using his executive authority – his pen and phone – to invest in modernizing our infrastructure, including speeding up the permitting process for major infrastructure projects to create more jobs.

The President supports the steps that Congress is taking in the short-term to avoid a lapse in the Highway Trust Fund, and he will continue to push for long-term solutions for our nation’s infrastructure and the American economy.

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Investing in a 21st century American infrastructure is an important part of the President’s plan to build on the progress our economy is making by creating jobs and expanding opportunity for all hardworking Americans.  Modern and efficient infrastructure – whether moving goods to our harbors and ports or connecting people to services or gigabits to our offices and homes – helps small businesses to expand, manufacturers to export, investors to bring jobs to our shores, and lowers prices for goods and services for American families.

The President has been very clear that we need to do more to improve our infrastructure in order to create jobs, provide certainty to states and communities, help American businesses, and grow our economy.  He has put forth a long-term proposal that would do just that and pay for it by closing unfair tax loopholes and making commonsense reforms to our business tax system, while providing the certainty of reliable federal funding to states and communities.

And while the President is encouraged that Congress is heeding these calls by taking action in the short-term to prevent transportation projects across the country from grinding to a halt, the President will continue to act on his own to promote American economic growth where there is need or opportunity.  And right now, there is a real opportunity to put private capital to work in revitalizing U.S. infrastructure.

That is why today, the President will sign a Presidential Memorandum to launch the Build America Investment Initiative, a government-wide initiative to increase infrastructure investment and economic growth by engaging with state and local governments and private sector investors to encourage collaboration, expand the market for public-private partnerships (PPPs) and put federal credit programs to greater use.  Starting with the transportation sector, this initiative will harness the potential of private capital to complement government funding.

Ø  As part of the Initiative, the Administration is launching the Build America Transportation Investment Center:  Housed at the Department of Transportation, this center will serve as a one-stop shop for state and local governments, public and private developers and investors seeking to utilize innovative financing strategies for transportation infrastructure projects.  Additional details are below.
Build America Interagency Working Group: To expand and increase private investment and collaboration in infrastructure beyond the transportation sector, a federal inter-agency working group, co-chaired by Cabinet Secretaries Lew and Foxx, will do a focused review with the best and the brightest from the public and private sector.  This group will work with state and local governments, project developers, investors and others to address barriers to private investments and partnerships in areas including municipal water, ports, harbors, broadband, and the electrical grid. The effort will include a particular focus on improving coordination to accelerate financing and completion of projects of regional and national significance, particularly those that cross state boundaries.
Infrastructure Investment Summit:  As part of the drive toward innovative infrastructure solutions and to highlight the opportunities for infrastructure investment, the Treasury Department will host a summit on Infrastructure Investment in the U.S. on September 9, 2014.  This session will bring together leading project developers and institutional investors with state and local officials and their Federal counterparts, and will focus on innovative financing approaches to infrastructure, and highlight other resources that support project development.
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Build America Transportation Investment Center: Housed at the Department of Transportation, this center will serve as a one-stop shop for state and local governments, public and private developers and investors seeking to utilize innovative financing strategies for transportation infrastructure projects. This center will provide:

‘Navigator Service’ for the Public and Private Sector: Through hands-on support, advice and expertise, the center will make DOT credit programs more understandable and accessible to states and local governments and leverage both public and private funding to support ambitious projects.  The center will also provide private sector developers and infrastructure investors with tools and resources to identify and execute successful PPPs.

Improved Access to DOT Credit Programs: The center will encourage awareness and efficient use of existing resources at the Department, including the Transportation Infrastructure Finance and Innovation Act (TIFIA) program.  TIFIA provides long-term, flexible financing to highway and transit projects that feature dedicated revenue sources.  Each dollar of Federal TIFIA funding can support about $10 in loans, loan guarantees or lines of credit.  In many cases, the lower cost of capital and flexible terms offered by TIFIA are critical factors in determining whether a PPP is a viable and cost-effective option for a project. The center will also focus on the use of key DOT programs including the Private Activity Bond program (PABs), and the Railroad Rehabilitation and Improvement Financing Program (RRIF).

Technical Assistance: The center will share best practices from states that are leading the way on private investment to states that have not yet adopted innovative financing strategies, encouraging a more robust national market. Today, the top six states for PPPs have nearly two-thirds the value of all U.S. PPP projects. Twenty states have no PPPs in transportation at all. The center will provide technical assistance to help remove barriers to ensure the public and private sector can come together to complete projects that make sense. Through a website and on-demand technical assistance, the center will provide information about DOT credit programs, case studies of successful projects and examples of deal structures, standard operating procedures for PPP projects and analytical toolkits. It will also help interested investors better understand how DOT credit and grant programs can be used together to support project development.
Information to Reduce Uncertainty and Delays: The center will work in partnership with the interagency Infrastructure Permitting Improvement center to provide visibility for local and state governments, project sponsors and investors on the permitting process.

Case Studies and Additional Background

The Build America Investment Initiative taps into the opportunity to increase the pipeline of effective public-private-partnerships and other innovative financing mechanisms:

High Demand: Institutional investors, both domestic and international, recognize the strength of our economy and want to invest in America. In 2013, the U.S. was the top destination for foreign direct investment with over $230 billion.  The global investment community has over $83 trillion dollars with a growing appetite for infrastructure. That is potentially hundreds of billions of dollars to fund the building of U.S. public-private infrastructure.

Proven Approaches: Some states and communities have established successful PPPs and have developed strong institutional knowledge of how these projects are best structured and managed.  Expanding that know-how to other states has the potential to increase the flow of capital by tens of billions of dollars over the next few years. Today, for example, the top five states in PPPs have nearly twice the per-capita value of projects as the next 20 best states – and if those states caught up, it could mean up to $30 billion worth of infrastructure projects.

Building on Models of Success: Some states and localities across the country have developed successful track records utilizing PPPs and other innovative financing approaches for infrastructure projects.  The Build America Transportation Investment center will use the lessons-learned from these leaders to help other communities and private project sponsors understand and better use federal financing programs and to structure deals that incorporate best practices and avoid pitfalls.

Case Study: Colorado FasTracks Project

Denver, Colorado is a community that has shown how transformative, multi-modal public infrastructure projects can be brought to fruition by integrating multiple financing sources.  Denver was able to utilize a PPP as part of the FasTracks development – combining light rail, bus rapid transit, development of Denver Union Station, parking, and other improvements – alongside state and federal funding.

The FasTracks Eagle project in Denver is a $2.2 billion public-private partnership to construct two new commuter rail lines.  The project combined several DOT funding and financing mechanisms – Federal Transit Administration’s New Starts, Private Activity Bonds, and a TIFIA loan – in addition to other Federal, State, and local resources and private investment.

The Eagle project is using a “design-build-finance-operate-maintain” contract under a 34-year concession.  Denver will retain ownership of the assets, set fares and fare policies, and keep all project revenues.  Denver will make payments to the private investor and operator (“concessionaire”) based on performance metrics.


Case Study: Florida

Florida has been leading the way on PPPs since 2001. In 2007, the State of Florida established the Office of Public-Private Partnerships; since then the state has completed over $6 billion in innovative projects.

Florida is now using a public-private partnership to complete the $1.1 billion Port of Miami Tunnel Project that will link the Port of Miami with the MacArthur Causeway and I-395 on the mainland. The project, like many PPPs around the country, took advantage of DOT’s TIFIA loan program for a $340 million loan, which in turn leveraged private dollars – a great example of the kinds of partnerships that the new Build America Transportation Investment center will bolster.

THE GROW AMERICA ACT

The Highway Trust Fund – which funds a significant portion of the construction and capital repairs of our surface transportation system – is projected to be insolvent by the end of the summer barring Congressional action.  In addition to preventing the Trust Fund from expiring in the short term, the President has clear that we need long-term action and predictable funding to provide certainty to states and communities, help American businesses, and grow our economy.

In spring 2014, President Obama transmitted to Congress his vision for a long-term solution.  The GROW AMERICA Act, a $302 billion, four-year transportation reauthorization proposal provides increased and stable funding for our nation’s highways, bridges, transit, and rail systems, ends the cycle of short-term, manufactured funding crises and builds confidence in the public and private sector.

The Administration’s proposal is funded by supplementing current revenues with $150 billion in one-time transition revenue from pro-growth business tax reform.  In other words, the President’s proposal is fully paid for without increasing the deficit. The President’s proposal will also keep the Trust Fund solvent for four years and increase investments to meet the transportation priorities and economic needs of communities across the country.

The proposal also contains a series of legislative proposals to improve the return on transportation spending and improve safety, including a title on improving project delivery, and the federal permitting and regulatory review process.

GSA ADMINISTRATOR'S STATEMENT ON PROPERTY REDEVELOPMENT BEFORE HOUSE COMMITTEE

FROM:  U.S. GENERAL SERVICES ADMINISTRATION
Federal Triangle South: Redeveloping Underutilized Federal Property
Statement of Dan Tangherlini
Administrator, General Services Administration
Before the House Committee on Transportation and Infrastructure,
Subcommittee on Economic Development, Public Buildings, and Emergency Management
November 19, 2013

Introduction

 Good morning Chairman Barletta, Ranking Member Carson and Members of the Subcommittee. Thank you for inviting me to appear before you today.

At a time when budgets are tightening across the government, the mission of GSA to provide value to the government and the American people is more important than ever before. The savings and services we provide allow our partner agencies to focus their important resources on their critical missions. However, the fact is that in the current fiscal environment, reduced budgets are having an undeniable effect on the public infrastructure.

Today’s hearing looks to explore increased utilization of public-private partnerships, both at GSA and across government. In a very real way, GSA’s Public Buildings Service is a public-private partnership. Approximately 92 percent of the revenue in the Federal Buildings Fund is invested right back in to the private sector. These funds pay private sector landlords for existing lease obligations, private sector service companies to operate and maintain our buildings, and private sector design and construction firms to repair and construct our buildings.

At GSA, we are dealing with a building inventory that includes some of the oldest buildings in the country, buildings that not only need repairs to keep them in working order, but often require renovations to ensure that they are up to the standards of 21st century government.

Unfortunately, in recent fiscal years, GSA has been unable to use the rent that we receive from our partner agencies to fund the high priority mission needs of partner Federal agencies and to make basic repairs to the public buildings we hold in trust. In fact, we are now faced with cuts that could force GSA to default even on our existing lease obligations. In the face of these continued challenges, I am committed to exploring all of GSA’s authorities to reduce the cost of real estate, meet our partner Federal agencies’ needs, and repair and maintain our public buildings

Savings at GSA

GSA partners with private industry to deliver needed space and service to our fellow agencies. Utilizing our consolidated buying power and real estate expertise, we are able to drive down the costs of leasing, operating, and maintaining the government’s real estate footprint. GSA negotiates leases that, on average, are more than 11 percent below market rates.

By aggregating the space needs of a variety of agencies, we are also able to aggressively utilize our public buildings. Nationally, GSA’s vacancy rate is 3.1 percent, far below the private sector average of 17.4 percent. If our vacancy rate was as high as the private sector’s, it would cost the taxpayers an additional $1 billion this year alone.

New Tools

Beyond our traditional, ongoing partnership with private industry, GSA is interested in further exploring the use of flexible authorities that do not require upfront appropriations. To that end, and with direction from Congress and this Committee in particular, this year, GSA used its authority under Section 111 of the National Historic Preservation Act to outlease the Old Post Office. We reached an agreement for the investment of $200 million in private sector funds in the restoration of this 114-year old federal building. This significant investment will allow us to convert the Old Post Office into a mixed-use development that will serve the local community, preserve the historic facility, and save taxpayer dollars. We also will receive a base rent of $250,000 per month, which escalates at the Consumer Price Index over the term of the 60-year lease. The funds that GSA receives from the Old Post Office lease can be used for repair and upkeep of historic federal buildings across GSA’s inventory, saving additional taxpayer dollars.

We are also actively exploring new approaches to leverage the value of our older, outdated buildings to get new, highly efficient space for our partner agencies. Across the country, we have put in motion several potential exchange projects, including the J. Edgar Hoover building here in Washington, D.C., and, of course, the project that is the subject of today’s hearing: Federal Triangle South.

Federal Triangle South

Federal Triangle South is a proposed exchange that looks to leverage the value of several buildings in southwest DC to fund new, highly efficient space for the agencies currently housed there. Right now, the buildings that comprise this area represent a significant challenge as well as an opportunity for both GSA and the agencies that occupy them.

The Cotton Annex is empty. The GSA Regional Office Building at 7th and D Streets Southwest is an inefficient and unattractive space that was not constructed with the modern realities of a mobile workplace in mind. The Department of Energy Building is another facility that does not accommodate its tenants’ needs for space or facility amenities and underutilizes the valuable land on which it sits. The Federal Aviation Administration buildings are in the best shape of any of these facilities, but they too are not equipped for the needs of a 21st century government agency.

On December 2, 2012, GSA issued a Request for Information to identify creative solutions to the challenges presented by these buildings, and on February 4, 2013, we received 10 responses. GSA has evaluated these responses and developed a strategy for how best to proceed, and we expect to issue a Request for Proposals in the near term.

We are excited with the prospect that GSA’s initiative to exchange some of our existing inefficient and outdated properties for facilities that better serve today’s needs will facilitate the District’s effort to transform the properties at Federal Triangle South to create a mixed-use neighborhood connecting the National Mall to the Southwest Waterfront as envisioned in the SW Ecodistrict Plan, a plan jointly developed by the National Capital Planning Commission, GSA, and 15 federal and District government partner agencies. We believe we can both provide for the 21st Century space needs of Federal employees and create a place in which people will want to work, live, play, and learn. By exchanging underperforming federal property for the upgrade and renovation of other federal facilities, we can help replace a cold, sterile, utilitarian, single use enclave with a vibrant, diverse, and special community of its own.

In Federal Triangle South, we will be able to reexamine how the federal government uses these buildings and also reassess how this space fits into the surrounding community. Furthermore, as we look to address the needs of our partner agencies, we also have important opportunities to contribute to the economic development and sustainability of the places they call home. As the committee has noted, Federal Triangle South is a great example of where this approach can be successful.

Conclusion

GSA is committed to meet the challenge we have been given by both President Obama and Congress to make the entire government more efficient. That will require changing the way our buildings work, but it also means shrinking the federal footprint and creating more sustainable space. The current fiscal stress means that we simply cannot afford to do business as usual. We must look for new ways to maximize the value of our assets. Working together with industry, we have a chance to shape a better, more efficient government for the 21st century, as well as fuel the transformation of a core area of Washington DC.

I thank the committee for the opportunity to testify today and look forward to answering your questions.

OBAMA ADMINISTRATION AND BIG BUCKS FOR PUBLIC-PRIVATE PARTNERSHIPS SUPPORTING U.S. MANUFACTURING

FROM: U.S. DEPARTMENT OF LABOR

Obama administration announces $20 million for 10 public-private partnerships to support American manufacturing and encourage investment in the US

Investments will promote job creation and economic growth in local industry clusters in Ariz., Calif., Mich., NY, Okla., Ore., Pa., Tenn. and Wash.

WASHINGTON — The Obama administration today announced that 10 public-private partnerships across America will receive $20 million in total awards to help revitalize American manufacturing and encourage companies to invest in the United States.

The 10 partnerships were selected through the Advanced Manufacturing Jobs and Innovation Accelerator Challenge, which is a competitive multi-agency grant process announced in May 2012 to support initiatives that strengthen advanced manufacturing at the local level. These public-private partnerships consist of small and large businesses, colleges, nonprofits and other local stakeholders that "cluster" in a particular area. The funds will help the winning clusters support local efforts to spur job creation through a variety of projects, including initiatives that connect innovative small suppliers with large companies, link research with the startups that can commercialize new ideas, and train workers with skills that firms need to capitalize on business opportunities.

The Advanced Manufacturing Jobs and Innovation Accelerator Challenge is a partnership among the U.S. Department of Commerce's Economic Development Administration and the National Institute of Standards and Technology, the U.S. Department of Energy, the U.S. Department of Labor's Employment and Training Administration, the U.S. Small Business Administration and the National Science Foundation.

In order to create an economy built to last, America needs to make more things the rest of the world wants to buy. After losing millions of good manufacturing jobs in the years before and during the deep recession, the economy has added nearly 500,000 manufacturing jobs since February 2010 — the strongest period of sustained job growth since the 1990s. While there's more work to be done, steps like today's announcement build on this momentum.

"By partnering across the federal government, these grants will help us leverage resources and ensure that training programs for advanced manufacturing careers provide the skills, certifications and credentials that employers want to see from day one," Secretary of Labor Hilda L. Solis said.

"A strong manufacturing base in America is critical to the health of the U.S. economy, and these awards further demonstrate the Obama administration's commitment to keeping this country on the cutting edge of innovation in manufacturing," said acting Secretary of Commerce Rebecca Blank. "This investment will help accelerate and unleash the most promising ideas in advanced manufacturing, and bring those ideas to market. This will lead to good jobs for American workers, increase the nation's competitiveness, and strengthen an economy that's built to last."

The awards will help regional clusters grow by strengthening their connections to regional economic development opportunities and advanced manufacturing assets, helping develop a skilled and diverse advanced manufacturing workforce, increasing exports, encouraging the development of small businesses, and accelerating innovation in technology. The 10 winning initiatives — based in Arizona, California, Michigan, New York, Oklahoma, Oregon, Pennsylvania, Tennessee and Washington — will each receive approximately $2 million to fund projects that are expected to train a total of 1,000 workers and help nearly 650 companies leverage a cluster's resources in their regions and create jobs across the country.

"As part of President Obama's blueprint for an economy built to last, the Energy Department is investing in innovative, public-private initiatives like the Advanced Manufacturing Jobs and Innovation Accelerator Challenge that support the pillars of American energy, American manufacturing and skills for American workers," said Energy Secretary Steven Chu. "These investments are helping America strengthen our competitive edge and leadership in the global manufacturing sector."

"The SBA pioneered the federal government's first regional cluster strategy two years ago, and we've already seen the tangible benefits of these investments, including job creation, innovation and increased competitiveness," said SBA Administrator Karen Mills. "These 10 new advanced manufacturing jobs and innovation accelerators are proof that we can continue to build on — and complement — the success that we've already achieved and support strong ecosystems of small businesses in targeted regions throughout the country and across key industries. Additionally, by supporting our small innovative manufacturing companies, we are fostering the growth of the American supply chain and creating an economy built to last."

As part of President Obama's commitment to creating an economy built to last, the administration has invested more than $200 million promoting regional innovation clusters. The administration created an interagency task force, known as the Taskforce for the Advancement of Regional Innovation Clusters, to develop and administer interagency grant competitions. This is the third round of the Jobs and Innovation Accelerator Challenge and, in addition to the six partnering agencies, this initiative leverages technical assistance from up to eight other federal agencies.

The 10 winners announced today are:
Arizona: growing the Southern Arizona Aerospace and Defense Region, a project of the Arizona Commerce Authority ($1,817,000).
California: Advanced Manufacturing Medical/Biosciences Pipeline for Economic Development, a project of Contra Costa County, Manex, the University of California — Berkley, Laney College and the Northern California Small Business Development Center at Humboldt State University ($2,190,779).
Michigan: Innovation Realization: Building and Supporting an Advanced Contract Manufacturing Cluster in Southeast Michigan, a project of the Southeast Michigan Community Alliance, the Michigan Manufacturing Technology Center, the National Center for Manufacturing Sciences and Detroit Regional Chamber Foundation ($2,191,962).
New York: a Proposal to Accelerate Innovations in Advanced Manufacturing of Thermal and Environmental Control Systems, a project of Syracuse University, NYSTAR, the State University of New York's College of Environmental Science and Forestry and Onondaga Community College ($1,889,890).
New York: Rochester Regional Optics, Photonics and Imaging Accelerator, a project of the University of Rochester, NYSTAR and High Tech Rochester Inc. ($1,889,936).
Oklahoma: Manufacturing Improvement Program for the Oil and Gas Industry Supply Chain and Marketing Cluster, a project of the Oklahoma Manufacturing Alliance, the New Product Development Center at Oklahoma State University, the Oklahoma Department of Commerce, the Center for International Trade and Development at Oklahoma State University and the Oklahoma Application Engineer Program ($1,941,999).
Pennsylvania: Agile Electro-Mechanical Product Accelerator, a project of Innovation Works, the Catalyst Connection, the National Center for Defense Manufacturing and Machining and the Westmoreland/Fayette Workforce Investment Board ($1,862,150).
Pennsylvania: Greater Philadelphia Advanced Manufacturing Innovation and Skills Accelerator, a project of the Delaware Valley Industrial Resource Center ($1,892,000).
Tennessee: AMP! — the Advanced Manufacturing and Prototyping Center of East Tennessee, a project of Technology 2020, the Tennessee Manufacturing Extension Partnership, Oak Ridge National Laboratory, Pellissippi State Community College and the University of Tennessee ($2,391,778).
Washington and Oregon: Innovations in Advanced Materials and Metals, a project of the Columbia River Economic Development Council, Impact Washington, Southwest Washington Workforce Development Council and the Oregon Microenterprise Network ($1,792,221).