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public entities such as land assemblage and condemnation, bond issuance, administration of
grants and loans, and provision of investment inducements such as tax abatements. The
advantages of quasi-public corporations are the following: First, they have professional staff.
Second, they are the semi-independent development arm of the city (Barbour, G. P.,
1982:229) with an separate budget. Third, they can contract for construction without
competitive bidding (Lyall, 1982:50). Forth, they are more flexible than city agencies since
they act relatively independent of local government supervision. Fifth, powers of quasi-public
development institutions such as downtown development authorities include eminent domain,
selling tax-exempt revenue bonds, ability to receive revenue from the sale or lease of property
(compare: CED, 1978:168).
Examples for quasi-public corporations are the ‘Center City Development Corporation’
(CCDC), a nonprofit development corporation in San Diego, and the ‘Economic
Development Corporation of San Diego County’ (EDC).
Advantages of private development corporations are the following: First, they are independent
from the local government. Second, they are not constrained by certain restrictions imposed
on local governments. Third, they have powers that are not allowable for public entities such
as real estate acquisition, equity investments and loans. Forth, they are financial independent
of the city budget. Last, they have professional expertise.
In addition to establishing new development institutions, public-private partnerships have
contributed to the reorganization of existing departments and agencies. For instance, the
“Department of Planning and Economic Development (PED) was created [in Saint Paul] to
consolidate four separate agencies. Under the direction of the mayor and city council, PED
could respond as one agency to such developer’s needs as zoning, financing, project
coordination, and management” (Brandl, J.; Brook; R., 1982:184).
To sum up, development corporations were formed explicitly for facilitating public and
private sectors cooperation. Quasi-public, nonprofit development corporations are run like
private corporations but empowered to receive and spend public and private money. They
have special authorized powers such as eminent domain and issuance of tax-exempt revenue
bonds. As a consequence, it has become less clear over time what is public and what is private
due to separate development entities. Development corporations were increasingly used by
local governments since the 1970s and each has had its own combination of public and private
participants and funding arrangements. Due to the powers of development corporations in
contrast to public entities, the city through the development corporation could act as an
investor and risk taker in partnership with the private sector.
c) UDAG Program and Public-Private Cooperation
UDAG was launched in 1977 and was designed to help stimulate economic development in
cities in a way that CDBG could not achieve. Like urban renewal, the focus of UDAG was on
physical redevelopment as a means to local economic development. But their were significant
differences that generated UDAG partnerships in urban development. This section describes
the UDAG program and its contribution to public-private partnerships in greater detail
The UDAG program served as the basic instrument of the Carter administration for leveraging
private investment for local economic development. In essence, UDAG explicitly required
private sector investment. As Eisinger states, the “insistence on a prior guarantee of private
sector investment distinguishes UDAG from all previous federal economic development
programs” (Eisinger, 1988:114). “HUD regulations set a minimum leveraging ratio of 2.5
private dollars to every 1 UDAG dollar” (Eisinger, 1988:120). Moreover, UDAG, in contrast
to Urban Renewal, required prior commitment of developers before any project. The program