Public-Private Partnerships in Urban Development in the United States



the participants contribute to the benefit of the broader community while promoting their own
individual or organizational interests.” (CED, 1982:2)

In a pioneering study of coordinated economic development in 1978, the National Council on
Urban Economic Development (CUED) defined public-private cooperation in urban
development as follows:

“Collaboration on a joint public/private development project involves the timely sharing of resources
and expertise and the coordination of activities. In essence, it is a negotiated business deal in which
trade-offs are made, and risks, benefits and profits are shared. It is a multi-faceted process structured to
fill gaps in the local investment climate, such as unavailability of capital, problems with land
assemblage, high taxes and potential weak demand for the project. ” (CUED, 1978:197)

Both definitions reflect the aforementioned differences in the understanding of public-private
partnerships. The CED stresses that partnerships are ‘cooperative’ and entail mutuality of
goals and benefits that contribute to the benefit of the broader community. Public-private
partnerships are broadly defined where cooperation can take several forms including public
incentives to facilitate private activity and joint development ventures. The CUED, however,
views collaborative processes in joint ventures more precisely as shared commitment of
investment, risk, and liability based on a negotiated business deal. Moreover, the CED
considers pubic-private partnership as a too altruistic form of multisectoral cooperation since
partnerships have not served mutual and community goals in a lot US-American cities.

Perhaps the most precise definition of public-private partnerships in urban development is the
one by Hamlin and Lyons:

“Defined broadly, it [public-private partnership] describes an innovative set of activities in which the
public interest and private investment return are mutually pursued by a variety of mixed, collaborative
entities. In reality the partnership is more a process than an organizational structure. [...] Public-private
partnerships often mean governmental involvement to perfect the real estate market by mitigating
urban externalities so as to free the natural process of urban renewal and development. [...] The
concept as defined broadly in the United States includes a spectrum of relationships between
organizations for the establishment and pursuit of mutual goals. It is not limited to normal legal or
financial partnerships.” (Hamlin, R. E.; Lyons, T. S., 1996:168)

The cornerstones of public-private partnerships in urban development summarized from the
different definitions above are the following: (1) pooling resources through joint investments,
risk, and liabilities, (2) negotiations among participants, and (3) cooperation and mutuality
though partnerships have often not shared common or broader community goals.

Partnership is defined in this paper as cooperation between the public and private sectors,
usually based on formal agreements, sometimes informal as well, to work together towards
specific urban development objectives. Public-private partnerships can be understood
analogous to business partnerships with profit and risk sharing, general partners and limited
partners, and different roles and different objectives for those that are responsible for
developing strategies and those responsible for implementing it. The partners may act as equal
participants, however, equality is an ambitious ideal that can rarely realized in practice.

To conclude, the word public-private partnership is often used more broadly than the project-
oriented approach as a loose term for a variety of types of cooperation. There are many forms
of public-private cooperation in urban development ranging from task forces, formal
organizations, corporations and even direct subsidies from public entities to private
corporations or property owners have been described as public-private partnerships.
Partnerships may be long-lasting relationships between the public and private sectors, ad hoc
committees or joint development ventures. In some cases the term public-private partnership
is used so broadly, that only imagination limits its definition and therefore the word



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