Hayward City Council
October 6, 2026

Tuesday, October 6, 2026
5:30 PM

CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
City Hall, Room 2A
777 B Street, Hayward
City Council
Agenda
1 City Council Agenda October 6, 2026

SPECIAL CITY COUNCIL MEETING
City Hall, Conference Room 2A
NOTICE: The City Council will hold a hybrid meeting in Conference Room 2A and virtually via Zoom.

PUBLIC PARTICIPATION
How to observe the Meeting:

1. Live stream https://hayward.legistar.com/Calendar.aspx

2. YouTube Live stream: https://www.youtube.com/user/cityofhayward How to submit written Public Comment:

1. Use eComment on the City's Meeting & Agenda Center webpage at:
https://hayward.legistar.com/Calendar.aspx. eComments are directly sent to the iLegislate application used by City Council and City staff. Comments received before 3:00 p.m. the day of the meeting will be exported into a report, distributed to the City Council and staff, and published on the City's Meeting & Agenda Center under Documents Received After Published Agenda.

2. Send an email to [email protected] by 3:00 p.m. the day of the meeting. Please identify the Agenda Item Number in the subject line of your email. Emails will be compiled into one file, distributed to the City Council and staff, and published on the City's Meeting & Agenda Center under Documents Received After Published Agenda. Documents received after 3:00 p.m. through the adjournment of the meeting will be included as part of the meeting record and published the following day.

How to provide live Public Comment during the City Council Meeting:

Participate in Conference Room 2A or click link below to join the meeting:
https://hayward.zoom.us/j/85181271725?pwd=FimWLzi7ehXrkbCHYfqxeJTHSSwFwc.1 Meeting ID: 851 8127 1725
Password: Cc10/6@530
or
Dial: +1 833 928 4609 (Toll Free)
Meeting ID: 851 8127 1725
Password: 9229222467
CITY OF HAYWARD Page 2 Tuesday, October 6, 2026
2 City Council Agenda October 6, 2026

SPECIAL CITY COUNCIL MEETING
City Hall, Conference Room 2A
CALL TO ORDER: Mayor Salinas
SB 707 TELECONFERENCE NOTIFICATIONS AND CONSIDERATION

ROLL CALL

PUBLIC COMMENTS
Limited to Items on the Agenda.

WORK SESSION
Work Session items are non-action items. Although the Council may discuss or direct staff to follow up on these items, no formal action will be taken. Any formal action will be placed on the agenda at a subsequent meeting in the action sections of the agenda.

Public Safety Center: Receive Project Updates and Provide Feedback on Staff Recommendations and a Presentation on Public-Private Partnership (Report from Public Works Director Ameri)

1. WS 26-018
Attachments: Attachment I Staff Report
Attachment II Presentation

ADJOURNMENT
Adjourn to City Council Meeting.

CITY OF HAYWARD Page 3 Tuesday, October 6, 2026
3 CITY OF HAYWARD Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: WS 26-018
DATE: October 6, 2026
TO: Mayor and City Council
FROM: Director of Public Works

SUBJECT
Public Safety Center: Receive Project Updates and Provide Feedback on Staff Recommendations and a Presentation on Public-Private Partnership

RECOMMENDATION
That the City Council receive an update on the Public Safety Center Project including programming, design, site selection, and a presentation on a Public-Private Partnership delivery method, and provide feedback and direction on staff recommendations and next steps.

SUMMARY
The existing Hayward Police Station no longer meets the space, operational, staffing, and security requirements for the Hayward Police Department (HPD). A new Public Safety Center (PSC) is needed to fulfill the requirements.

On April 15, 2025, City Council authorized the City Manager to execute a professional services agreement with LPA, Inc., for site assessment and conceptual design services. Their services concluded with a final study report. On February 25, 20263, staff presented to the Council Infrastructure and Airport Committee (CIAC) on the completed programming, conceptual design and site assessment. On August 26, 20264, staff presented to the CIAC a project update including the recommended site.

To keep the project momentum, there is the desire to proceed with the entitlement process, such as land use updates, environmental studies and further development on the project delivery method and possible financing structure. In order to start that process, the site of the new PSC needs to be decided.

After receiving feedback on the site selection from City Council, staff will continue the project momentum by moving forward with entitlement and other predevelopment work, as budget allows. The work session will also include a presentation from industry experts affiliated with the Association for the Improvement of American Infrastructure to discuss and explore a Public-Private Partnerships (P3) as a potential alternative delivery method for the PSC project.

CITY OF HAYWARD Page 1 of 2 Printed on 10/1/2026
powered by Legistar™ 4
File #: WS 26-018

ATTACHMENTS
Attachment I Staff Report
Attachment II Presentation
CITY OF HAYWARD Page 2 of 2 Printed on 10/1/2026
powered by Legistar™ 5

DATE: October 6, 2026
TO: Mayor and City Council
FROM: Director of Public Works
SUBJECT: Public Safety Center: Receive Project Updates and Provide Feedback on Staff Recommendations and a Presentation on Public-Private Partnership

RECOMMENDATION
That the City Council receive an update on the Public Safety Center Project including programming, design, site selection, and a presentation on a Public-Private Partnership delivery method, and provide feedback and direction on staff recommendations and next steps.

SUMMARY
The existing Hayward Police Station no longer meets the space, operational, staffing, and security requirements for the Hayward Police Department (HPD). A new Public Safety Center (PSC) is needed to fulfill the requirements.

On April 15, 20251, City Council authorized the City Manager to execute a professional services agreement with LPA, Inc., for site assessment and conceptual design services. Their services concluded with a final study report2. On February 25, 20263, staff presented to the Council Infrastructure and Airport Committee (CIAC) on the completed programming, conceptual design and site assessment. On August 26, 20264, staff presented to the CIAC a project update including the recommended site.

To keep the project momentum, there is the desire to proceed with the entitlement process, such as land use updates, environmental studies and further development on the project delivery method and possible financing structure. In order to start that process, the site of the new PSC needs to be decided. After receiving feedback on the site selection from City Council, staff will continue the project momentum by moving forward with entitlement and other predevelopment work, as budget allows. The work session will also include a 1 https://hayward.legistar.com/LegislationDetail.aspx?ID=7299982&GUID=DF8B1F9A-341E-4100-90C3- DA2FA465512E&Options=&Search=
2HaywardPublicSafetyCenter_FINAL.pdf

3. https://hayward.legistar.com/Calendar.aspx#docaccess-1e3de375e660a6ce1ac2074ad384e7cb

4. https://hayward.legistar.com/Calendar.aspx#docaccess-0aa7675da00b85d3a1dd9fbf8f3dfba5 6

presentation from industry experts affiliated with the Association for the Improvement of American Infrastructure to discuss and explore a Public-Private Partnerships (P3) as a potential alternative delivery method for the PSC project.

FISCAL IMPACT
In FY 2025, City Council appropriated $625,000 in Measure C Capital Fund (Fund 406) for the PSC site assessment, conceptual design and staff time. There is approximately $45,000 remaining in that project for staff to continue with in-house entitlement work and seek expert advice on the P3 delivery method that is being considered for this project.

Staff estimates that an additional $600,000 will be needed to continue the entitlement work including environmental studies and engage consultants for support related to entitlement, project delivery method and project financing structure options to further develop this project. Staff is evaluating Measure C and other fund balances to provide a future recommendation to Council on what the City can afford.

BACKGROUND
Built in 1975, the existing facility at 300 West Winton Avenue has surpassed its useful life.

It is undersized, poorly configured, and lacks the essential security separations required for modern police stations. Operational and space-related deficiencies include:
• Insufficient operational spaces for staff and no public meeting spaces • Inadequate separation of public, secure, and restricted circulation zones • Limited public waiting, queuing, and interview areas
• Insufficient juvenile interview and detention facilities • Inadequate file storage
• Inefficient departmental layouts, with key functions located at inefficient distances from each other
• Outdated holding and booking facilities for detainees Building system deficiencies include:
• Need for more energy-efficient mechanical and electrical systems • Required ADA upgrades
• Building issues, including leaks into sensitive technology rooms • Antiquated sewer and plumbing systems
• Multiple temporary, portable structures used for police functions • Lack of exterior standoff distances for security and blast threats • Inadequate site parking for departmental and staff vehicles • Inadequate square footage for today’s needs
The building has been modified over the years, including an addition for office space and a Communications Center, and further remodeling is now impractical. Small or incremental 7

expansions would exacerbate inefficiencies and compromise security. Given these challenges, constructing a new facility is the best solution to meet the HPD’s evolving needs.

The new PSC should include the following features:
• Police Headquarter
• Temporary holding facilities
• Indoor shooting range
• Increased services for the Youth and Family Services Bureau • Animal services relocated to new PSC
• Crime Scene Technician Lab integrated to new PSC
• Some satellite campuses tasks relocated to new PSC
The space needs were projected to accommodate staffing growth through the year 2050 resulting in:
• 91,000 gross square feet (gsf) essential services building (Public space, Space for Admin & all PD divisions, crime lab, dispatch, jail and shared staff areas) • 30,000 gsf non-essential services building (K9, Special Response Unit, Property & Evidence, Indoor Range)
• 29,000 gsf animal services building
• 100-yard outdoor range
• Tactical Simulation Building
• Parking
The two locations have been identified as possible sites for the new PSC and these locations are as follows:
• An 8-acre portion of the former California Air National Guard (CANG) site: This site is located at 1525 West Winton Avenue and Tuskegee Airmen Drive. Eight acres have been designated at the eastern half of the 16.8-acre CANG site for the possible future location of the PSC
• The former City Hall Building Site: This site is located at 22300 Foothill Blvd between Foothill Blvd and City Center Drive. The site is approximately 3.5 open acres. The former City Hall building was demolished in 2020. The parking structure on the south side of the property which is another 2.3 acres remains and can potentially be refurbished and reused for PSC parking. There is approximately a total of 5.82 acres at ground level
The site selection process included an evaluation of the features and characteristics of each site.

CANG site:
• 8.1 acres or possibly more, if needed
• Easy access to I-880
8

• Adjacent to Fire Station 6 & Fire Training Center and at the Hayward Executive Airport
• Expansion opportunity
City Center site:
• 5.8 acres
• In Downtown and ease for community access
• Close proximity to City Hall
• However, adjacent to Hayward Fault and in close proximity to residential development
Project cost estimates were prepared for two sites consistent with the programming and space needs outlined above:

CANG site:

Buildings & Parking Structure $212 million
Site Work, including outdoor range and tactical simulation building $53 million Soft Cost $72 million
Project Total $337 million
City Center site:

Buildings & Parking Structure $242 million
Site Work, without outdoor range and tactical simulation building* $30 million Soft Cost $80 million
Project Total $352 million
With $200M for this project as identified but unfunded capital needs, the original programming and space needs were re-evaluated. This included prioritizing programming to reduce programming scope or to be done in a future phase. They include:

Reduced programming
• Public Spaces - reduction of the public lobby space and removal of one of the community meeting rooms
• Workstations- spaces reduced where functionality would not be compromised • Property & Evidence- a reduction in the number of workstations, drying cabinets, and evidence lockers
• Firearms Training - indoor firearms range, originally planned to be 50 yards, was reduced to a 25-yard range. The 100yd outdoor range is included in the PSC at the CANG site with a four lane 50yd outdoor range planned for a future phase. • Special Response Unit - The unit’s dedicated briefing room was removed from the scope with the assumption the unit could use the patrol briefing room when needed
• Temporary holding cell - a reduction in storage space, kitchen size, and number of cells. This reduced the maximum capacity of the jail from 49 people to 35 people • Communications Center - a reduction in the size of the break room, and the number of dispatch consoles was reduced from 16 to 14
9

• Vehicle Exam – reduction of the exam bay from 2 to 1
• Youth & Family Services Bureau - Reductions include the removal of the overflow counseling rooms, the waiting room, and the dedicated breakroom Programming in future phase
• Animal Services- not included in PSC with the option to be included in a later phase or located in an alternative site
• The tactical simulation building is removed to a future phase • K-9 - HPD does not currently have a K-9 program.

With the above reduction or prioritized programming, the project cost at the CANG site is estimated at $247M and at the City Center site is estimated at $259M.

DISCUSSION
The CANG site is determined to be better suited for the development of the new PSC. One of the major considerations is the availability of site area and the potential for expansion will permit flexibility to meet future needs. Construction cost is another factor that makes the CANG site more attractive. Due to the smaller site footprint at the City Center site, construction costs increase because the required building area would necessitate a fivestory building, versus a three-story building at the larger CANG site. During the August 26, 2026 CIAC meeting, staff discussed these and other factors recommending the CANG site and received the Committee’s endorsement. Proceeding with the CANG site will allow the next steps:

CANG zoning
The former CANG site is zoned Air Terminal – Aviation Commercial (AT-AC) with a Public Quasi-Public (PQP) General Plan land use designation and currently does not permit public facility use like the PSC at this site. Staff recommend a zone text amendment to update the zoning district to include public facilities such as police stations. The intention is to expand the list of permitted uses within the AT-AC District, which is fully aligned with the PQP general plan designation. This approach will allow the project to proceed without requiring precise area identification or detailed site/architectural plans at this stage. Initiating a zone text amendment allows the City to proceed with coordination and review by the Airport Land Use Commission, the Federal Aviation Administration (FAA) and eventually a public hearing with the Planning Commission and City Council.

FAA release
When the CANG site was active, it was used for airport purposes. Prior to the development of the PSC, the FAA must review and approve the leasehold for non-aeronautical use. The reclassification process requires a detailed explanation from the City to justify FAA approval. Part of the release process includes an update to the Airport Layout Plan (ALP).

Both the release and ALP update require review by several levels of the FAA, including their headquarters in Washington, D.C. The process typically takes 12 to 18 months. Staff are in the process of drafting the written request.
10

Environmental study
With the selection of the CANG site, work can begin with the initial study related to the California Environmental Quality Act (CEQA)/National Environmental Policy Act (NEPA) including the subsequent environmental studies needed. A request for proposal for this work will be issued to procure a consultant to perform the initial study to determine the environmental impacts and identify the level of environmental review.

Delivery method
While these entitlement works are underway, staff continue to evaluate the construction delivery method. The construction delivery method is the approach used to design and construct a project. It defines how the project team is structured, how contracts are established, and how responsibilities, risks, costs, and schedules are managed among the owner, designer, and contractor. Common to CIP projects in the City is the traditional delivery method, Design-Bid-Build, which has a highly linear schedule sequence from design to construction. From a schedule standpoint, alternative delivery methods fast-track projects by overlapping the design and construction phases allowing for more proactive risk-sharing and mitigation of potential delays or cost overruns. Other alternative delivery methods include Design–Build, Progressive Design-Build, Construction Manager at Risk, and P3. Selecting an appropriate construction delivery method ensures that the project is delivered efficiently, transparently, and in alignment with the goal for accountability, budget control, and timely completion. For this project, P3 delivery method is considered the most advantageous because it combines strong cost and schedule certainty with enhanced accountability and transparency coupled with the redevelopment potential at the CANG site.

Because the City has not done a project using P3, staff engaged Nossaman LLP for their expertise in this delivery method. One of the recommendations is performing a market sounding survey to get initial feedback from the design, construction and developer community regarding their interest with this project given the City’s current financial uncertainty as well the timing of their involvement and their commitment level related to risks, costs, and exits at various phases of pre-development.

As a part of this work session, a panel facilitated by the Association for the Improvement of American Infrastructure (AIAI) through the U.S. Conference of Mayors will provide a P3 overview and any answer questions that Council may have on P3. The panel includes a representative from Nossaman, the legal P3 expert retained by the City.

ECONOMIC IMPACT
There will be many trade jobs involved in the eventual construction of the facility, which will be subject to the City’s Community Workforce Agreement. Upon completion of the facility, this project will improve HPD’s staff retention and support recruitment efforts. 11

STRATEGIC ROADMAP
This agenda item directly supports the Strategic Priority of Invest in Infrastructure.

Specifically, this item relates to the implementation of the following project:

Invest in City-Owned Facilities and Property
Project N17: Provide CIC a needs assessment/preliminary feasibility report on a new Police Building, including a funding mechanism.

SUSTAINABILITY FEATURES
This new facility will be reviewed by the Building Division for conformance with State and local requirements related to sustainability (i.e., California Building Code, California Energy Code, etc.) which require a certain level of energy efficiency, resource conservation, material recycling, etc. In alignment with City policies, the facility will be all electric (no natural gas infrastructure) and will include sufficient solar to be a zero net energy facility.

The facility will also have electric vehicle (EV) charging with at least 20% of the parking spaces with either chargers installed or being EV capable. In addition, the building will be designed and constructed to meet Leadership in Energy and Environmental Design (LEED) standards for a Silver Certification, or better.

PUBLIC CONTACT
There is no public contact proposed for this item at this time. Input from interested community groups and residents will continue to be solicited during each phase.

NEXT STEPS
After receiving feedback and approval from City Council on the site selection, staff will continue with the zone text amendment, update the ALP, work with FAA for the release of aeronautical to non-aeronautical use and begin CEQA/NEPA related work, as budget allows.

Staff will also issue the request for information for the market sounding survey this month to gather information regarding P3 for further development of the PSC project. With this information, staff may return to the City Council for further direction on pursuing a P3 delivery method and solicit request of proposals for a financial consultant for their expertise and recommendation on the different options to finance this project. 12

Prepared by: Dave Hung, Acting Deputy Director of Public Works Recommended by: Alex Ameri, Director of Public Works
Approved by:
______________________________
Jennifer Ott, City Manager
13 Hayward Police Department Year-End Report
1 Public Safety Center:

Project Updates, Recommendations &
Presentation on Public-Private Partnership
October 6, 2026

ATTACHMENT II
14 Hayward Police Department Year-End Report
2 Project Need
• Public Safety Center (PSC)
constructed in 1975 with 110
employees and now includes
approximately three times as
many employees
• Building is old and functionally
obsolete
• Building and parking areas are
not even close to meeting
current needs
15 Hayward Police Department Year-End Report
3 Programming & Space Needs
 Anticipated Growth through 2050
 91,000 gsf essential services building (public space, space for admin & all PD divisions, crime lab, dispatch, temporary holding cell, and shared staff areas)
 30,000 gsf non-essential services building (K9 training, special response unit, property & evidence, indoor range)  29,000 gsf animal services building
 100-yard outdoor range
 Tactical Simulation Building
 Parking
16 Hayward Police Department Year-End Report
4 Cost Estimate
CANG Site City Center Site
Site Development
(demo, hardscape,
landscape, utilities)
$53M $30M***
Buildings & Parking
Structure $212M $242M
Soft Cost $72M $80M
Project Total $337M $352M
***City Center Site does not include the Outdoor Range and Tactical Simulation Building
17 Hayward Police Department Year-End Report
5 Cost Estimate - Prioritization to Reduce Cost
18 Hayward Police Department Year-End Report
6 Cost Estimate - Prioritization to Reduce Cost

ORIGINAL PROGRAMMING
CANG Site City Center Site
Buildings & Parking
Structure $212M $242M
Site Development
(demo, hardscape,
landscape, utilities)
$53M $30M
Soft Cost $72M $80M
Project Total $337M $352M

PRIORITIZED PROGRAMMING
Project Total $247M $259M
19 Hayward Police Department Year-End Report
7 Site Analysis
Site Option B
Former City Hall
City Center
Site Option A
West Winton
Avenue at the
Airport
Current Location
of HPD on West
Winton Avenue
20 Hayward Police Department Year-End Report
8 Site Analysis – Option A
21 Hayward Police Department Year-End Report
9 Site Analysis- Option B
22 Hayward Police Department Year-End Report
10 Site Recommendation
23 Hayward Police Department Year-End Report
11 8/26/26 CIAC Feedback
 Voted to recommend CANG Site to full Council
 Recommended for further consideration:
 Prioritize YFSB spaces
 Prioritize Animal Services new facility
 Include Public Spaces
 Commented on Public-Private Partnership Education
24 Alternative Delivery for
Public Safety Infrastructure
City of Hayward, CA
October 6, 2026
25 Presenters
13 Diana Ramirez
Sr. Advisor for Public Sector
Engagement & Programming
AIAI
Jon Kindrachuk
Senior Project Manager
PCL Construction
Orion Fulton
Americas Sustainable
Development Leadership Chair
ARUP
Elizabeth (Liz) Cousins
Chair, Infrastructure Group
Nossaman LLP
26 What is a Public-Private Partnership?
P3 is a delivery method that offers best value to the taxpayer through risk transfer.

It’s a contractual agreement between a public agency and a private entity that allows for greater private sector participation in the life cycle performance of the asset.

Generally, a P3 is considered to include long-term capital and financing as part of a Design-Build-FinanceOperate-Maintain (DBFOM) contract structure or a monetization transaction.

However, social infrastructure P3 transactions are becoming much more tailored to only include financing scope as a bridge to permanent muni-financing when tax revenues that the development generates can be financed with traditional tax or revenue backed permanent financing.

Similarly, operations and maintenance is included when government lacks sufficient near-term expertise and capacity to stabilize the asset and wants to transfer the risk of asset performance (including revenue). 1427
Delivery Methods
Public
Sector
Private
Sector
Private
Finance
Public
Finance
Segmented
Procurement
Packages
Integrated
Procurement
Package
DBB
DB
Outsourcing DBOM
DBFOM

DBFOM AP
DBF Increasing Risk Transfer
DBFM
D = Design
B = Build
F = Finance
O = Operate
M = Maintain
AP = Availability Payment
DBB = Design, Bid, Build 1528
Basic P3 Structure
1629
A P3 is:

A DESIGN AND CONTRUCTION,

FINANCING, OPERATIONS AND
MAINTENANCE PARTNERSHIP – the
public sector enters into a long-term
contract with the private sector to deliver
assets and services for the benefit of the
general public
A RISK SHARING APPROACH – the
private sector assumes key financial,
technical and operational risks, while the
public sector sets policy and retains
ownership

A LIFECYCLE PROCUREMENT

APPROACH THAT GUARANTEES
PERFORMANCE – by integrating design,
construction, and financing with operations
and maintenance, the asset performance is
optimized for the long term
A TRANSPARENT RELATIONSHIP – the
owner creates the control parameters
during procurement and retains ownership
of the project.
1730
A REAL ESTATE TRANSACTION - the
private entity enters into a performancebased contract for infrastructure with financial penalties imposed by the public
agency if availability and quality standards
are not met

THE RIGHT SOLUTION FOR EVERY
PROJECT- a value-for-money analysis
should be performed by experienced
legal, technical and financial advisors to
determine if a P3 approach is right for
the project.

A P3 is NOT:

PRIVATIZATION - the public sector
retains ownership and ultimate control
of the public asset
A FUNDING SOLUTION - the
government agency gains access to
private financing options which may not
be available in regular public
procurement, but the project must still
be creditworthy
1831
Rationale For Using P3s
Value for Money Savings
• Optimal allocation of risks.
• Design and construction efficiencies.
• Focus on whole life cycle costs and preventive maintenance.

Cash Flow Management
• Private financing reduces demands on the public’s bonding capacity, freeing up government funds for other vitally needed public services until bonding capacity is available for nonrevenue generating assets. • Public payments often begin when construction is complete, reducing upfront financing costs and incentivizing an accelerated completion schedule.

Performance is incentivized
• Payment is contingent on performance: on-time and on-budget delivery and long-term performance of the asset.

Risk Transfer
• P3 structures relieve the public sector from the risks of short-and long-term cost overruns. Guarantees quality of maintenance.
• Highly complex projects especially benefit from this approach.

Timetable Benefits
• Slightly longer preparation period but more certainty on completion leading to shorter overall time to completion.
• Timetable driven by private finance team (not dependent on County’s internal finance resources and completing deliverables).

Innovation
• P3s encourage the use of cutting-edge technologies—such as new technology and energy-efficient systems—by giving private partners the flexibility and incentive to innovate beyond conventional public procurement limitations. • With long-term responsibility for operations and maintenance, private partners design with durability, efficiency, and adaptability in mind—leading to more resilient and forward-thinking infrastructure solutions.
1932
Benefits of a P3

SCHEDULE DISCIPLINE

BUDGET CERTAINTY

COST SAVINGS

GREATER INNOVATION

LIFE-CYCLE MAINTENANCE

ACCELERATED DELIVERY

PUBLIC OWNERSHIP & CONTROL

EFFECTIVE RISK TRANSFER

JOB CREATION

PAYMENT FOR PERFORMANCE/ACCOUNTABILITY
2033
The top ten critical factors to address when procuring a P3

1. VISION

2. CHAMPION

3. COMMITMENT

4. COMMUNITY

5. COMMUNICATION

6. FUNDING

7. EXPERIENCE

8. STAFF/TIME

9. VALUE

10. INNOVATION
2134
Value for Money
Value for Money (VfM) analysis is a process used to compare the financial impacts of a P3 project against traditional public delivery alternatives.

The process to establish VfM includes:

Creating a Public Sector Comparator (PSC), which estimates the whole-life cost of carrying out the project through a traditional approach; Estimating the whole-life cost of the P3 alternative (either as proposed by a private bidder or a hypothetical “shadow bid” at the pre-procurement stage); and Comparing results.

Value for Money is an industry-accepted decision driver as the business case for elected officials.

However, the specific approach can vary by owner and by project and the timing can be after developer selection and predevelopment collaboration prior to financial close and making a financial commitment to the project.

Public Sector
Comparator
Public-Private
Partnership
Ancillary Cost
Retained Risk*
Financing Cost
Base Cost
Value for Money Example
Value for
Money
* During construction and throughout lifecycle
2235
• Define the Strategic Vision
• Clear Project Definition: scope, performance outcomes, and desired public benefits • Conduct Rigorous Project Preparation
• Political and Stakeholder Alignment: Internal and external buy-in to avoid derailments • Develop a Transparent, Competitive Procurement Process • Legal Authority: Confirm enabling legislation and procurement pathways (e.g., LGC 271.908) • Market Sounding: Engage industry early to test market interest and calibrate risk • Public Sector Capacity: Assign internal leads, bring on advisors, use decision gates • Craft Robust, Performance-Based Contracts
• Align Financing Strategies
• Plan for Oversight and Long-Term Stewardship
23 Laying the Foundation for a Successful P3
36 Recommended approach to move forward
• Complete environmental, geotechnical,
utility, FAA, and entitlement due diligence
activities
• Refine project scope, phasing strategy,
cost estimates and key risks
Engage Further Consultants
• Engage technical and financial consultants
as appropriate. Take into consideration the
advisors’ advice but retain the role of
decision-maker and providing the voice for
the agency.

Early Private Sector Engagement
• Conduct market outreach to seek market
feedback on optimum procurement timing and
features and to test market interest prior to
formal procurement
• Early discussion on risk and procurement
structure can test if City’s assumptions
match-up with the industry perceptions.
24 Continue City Preparatory Activities
• Advance funding and financing planning
while evaluating legal authority and
potential P3 structures 37
What is a PDA Procurement?
25 • Developer team selected largely on qualifications but can include other criteria such as concept design, price factors etc.
• After selection and upon completion of negotiations, a Predevelopment Agreement (PDA) is executed
• The team works closely with the City to advance design, pricing, risk allocation and other project elements
• These typically include a multiphase approach with 3 phases:

1. Feasibility determination

2. Advancement of environmental, design, pricing, risk allocation, etc.

3. Implementation 38
What is a PDA Procurement (cont.)?
26 • Financing structure is developed in parallel with the evolution of the design and other project elements
• Design is advanced to 60% +/- and costs, risk allocation, etc. are negotiated through an open book process – resulting in a fixed price, lump sum price
• The PDA phase is intended to determine whether the project is feasible, bankable, entitled, and aligned with public objectives before either party commits substantial development capital or enters into a long-term Implementation Agreement
• Upon successful negotiations, a public-private-partnership (P3) or other Implementation Agreement is executed, financial close is reached, and project execution moves forward • A predevelopment P3 approach may allow the City to advance the project before all capital funding is available
• A predevelopment P3 approach can provide financing flexibility, greater cost and schedule certainty, and meaningful risk transfer, but requires a more complex procurement process and acceptance of reduced direct control over project delivery 39 Fixed Price P3 Procurement
PDA / Progressive P3 Procurement
Developer
Selected Developer
Selected
Fixed Price vs PDA Procurements
2740
P3 CASE STUDIES
41 BUILDING PROGRESS 2
Potrero Yard Modernization Project

SAN FRANCISCO, CA
Owner San Francisco Municipal Transportation Agency
Value $735.54 Million
Financial Close April 2026
Delivery Structure Progressive Design-Build-Finance
Project Scope
The SFMTA Potrero Yard Modernization Project will replace the 110-year-old yard with a larger, seismically resilient electric bus facility, expand capacity, support green transit, and enable affordable housing as part of a broader modernization program.

The project will allow the agency to repair buses faster and accommodate 68% more buses at the yard, ensuring the fleet can grow and result in shorter wait times and less crowded buses for riders. The yard will be the central hub for the agency’s zero emission trolley bus fleet. The trolley buses do not generate direct or indirect particulate emissions.

In addition, the project’s design allows the agency to accommodate up to 100 units of affordable housing at the project site as well as opportunities for commercial retail and concessions as a second phase of the project, pending funding availability.

Public amenities such as large-scale public art pieces, improved pedestrian and bike infrastructure, spaces for street vendors, and public restrooms are also included in the project to provide a human-scaled streetscape.

Design to construction completion timeline: November 2022 (design starts under predevelopment agreement) – May 2030
Financing Instrument: California Municipal Finance Authority Revenue Bonds P3 CASE STUDY
2942
UC Merced Campus Expansion

MERCED, CA
Owner University of California, Merced
Value $1,300 Million
Financial Close August 2016
Delivery Structure 39-year Availability-Based DBFOM
Project Scope
The UC Merced 2020 Project is a 1.2 million gross-square-foot campus expansion and redevelopment project on the UC Merced campus. The expansion was complete in 2020 and nearly doubled the campus’ physical capacity.

The project was the first in the UC system to use a single private development team for a multi-year, multi-building project of this scope. The project involved the design and construction all of the new facilities as a single, fast-track project, but also includes major building systems operations over the 39-year term of the contract.

To accommodate changing needs over time, the design and construction approaches are flexible and highly adaptable, helping the campus achieve long-term life-cycle and sustainability goals. .

In line with the University’s sustainability goals all buildings will be a certified LEED Gold minimum. The design includes a robust approach to storm water management and aquifer recharge. These design considerations are consistent with the University’s goal of reaching triple net zero.

Design to construction completion timeline: September 2016– September 2020 Financing Instrument: Senior Secured Private Placement Debt P3 CASE STUDY
3043
Long Beach Civic Center Redevelopment

LOS ANGELES, CA
Owner City of Long Beach
Value $520 million
Financial Close April 2016
Delivery Structure 40-yr hybrid DBFOM
Project Team Equity: Fengate, PCL Investments USA
Design-Builder: PCL Construction
O&M: Johnson Controls, Inc.

The Challenge:

The project will revitalize the heart of downtown Long Beach with new civic and commercial elements, bringing the Port of Long Beach downtown and adding 1,000 new residents to breathe new life into a historic and cherished part of the City’s core. Finally, the project will result in over $1.0 million in annual taxes that will flow directly the City of Long Beach.

The Solution:

The project replaced seismically unsafe, maintenance-plagued structures with new resilient and energy-efficient civic buildings. The project also featured roadway and pedestrian improvements, with public plazas and pathways connecting the four civic buildings and offering a vibrant civic hub that infused new life and around-the-clock activity into downtown Long Beach. The project boosted economic impact in the area, creating an estimated 8,000 new jobs and generating over $1.3 billion in economic impacts.

The Outcome:

Design to construction completion timeline: 3 years
How was the project paid for? Taxable Private Placement and short-term construction financing.

P3 CASE STUDY
3144
Long Beach Courthouse

LOS ANGELES, CA
Owner California Administrative Office of the Courts
Value $495 million
Financial Close December 2010
Delivery Structure 35-yr Availability-Based DBFOM
Project Team Equity: Meridiam Infrastructure
Design-Builder: Clark Construction
O&M: Johnson Controls, Inc.

The Challenge:

Replacement of an old building in poor condition, which presented health and safety risks to the public and those working in the courthouse. A modern, spacious and energy efficient building opened in 2013 and continues to serve the public. It accommodates 600 employees and up to 4,500 visitors daily. The project helps to achieve local sustainability goals reflected in the Leadership in Energy and Environmental Design (LEED) Gold certification, which exceeds the contractual requirement by one level.

The Solution:

Governor George Deukmejian Courthouse is a five-story, 544,000-square-foot building featuring 31 courtrooms. It also houses court administration offices, Los Angeles County lease space, and commercial and retail leasable space. There are public amenities including a large secured courtyard with fountains, a food court, and a convenience store. It also includes secure below-grade inmate transfer facilities, detention facilities, and parking areas for judges.

The Outcome:

Design to construction completion timeline: 3 years
How was the project paid for? Senior Secured Private Placement Debt.

P3 CASE STUDY
3245
Hayward Police Department Year-End Report
33 Next Steps & Recommendations
 Entitlement
 Zoning
 FAA release
 Environmental study
 Delivery method
 Market sounding survey
Recommendations:

Proceed with CANG site, entitlement, market
sounding survey
46 Hayward Police Department Year-End Report
34 Questions and Feedback
47 Additional Information
48 What is the Association for Improvement of American Infrastructure (AIAI)? AIAI is an action-driven, member-led non-profit organization made up of the leading minds in the industry, dedicated to moving comprehensive and innovative infrastructure delivery approaches forward and strengthening American infrastructure.

Our mission is two-fold: facilitate education among the public sector and advance legislation through targeted advocacy. We seek to provide civic leaders with the knowledge they need to make informed decisions about the benefits of public-private partnerships,such as economic development, life cycle cost savings, risk transfer and accelerated project delivery.

Member participation includes:
• A platform for education and collaboration
• Executive roundtable discussions
• Legislative support
• Comprehensive Delivery education
• State and local advocacy
• Virtual workshops
• Webinars
• In Person Workshops
• Bootcamps
• Comprehensive Delivery Certification
3649
STEP 01
8 Instructional Modules
Participate in virtual
instructional sessions on
Thursdays
STEP 0 2
3 Case Studies Sessions
Engage in applied learning
and real-world scenarios
STEP 0 3
Final Exam
Complete the online final
examination
STEP 04
Submit
Assessments +Final exam
submission
STEP 0 5
Graduation
Official ceremony
for 2026 Cohort:

Sep 30 – Oct 1
Are you P3 Certifiable?
https://aiai.talentlms.com/
Questions? Contact us at:

[email protected]
AIAI’s P3 Certification program is IACET accredited! Designed for public-sector professionals seeking a comprehensive understanding of Public-Private Partnerships (P3s) Next Cohort
November 2026 – April 2027
3750
Run by public sector P3 experts, P3Direct is a program implemented by AIAI for the public sector as a means to create a connection between experienced P3 professionals and those looking to gain more information on the P3 procurement model across agencies at every level.

P3Direct provides an opportunity for public officials to both engage with P3 experts and share their experiences.

The program encourages an understanding of the model, and collaboration of agencies to promote best practices and share lessons learned and success stories around P3s.
516.277.2950 | [email protected] | www.aiai-infra.org 3851 Delivery options are defined by risk transfer and private sector involvement.

Risk Transfer Increases to the Private Sector
Traditional
Government
Projects
Alternative Delivery Options
Design
Bid
Build
Design
Build
(DB)
Design
Build
Finance
Maintain
(DBFM)
Design
Build
Finance
Operate
Maintain
(DBFOM)
Design
Build
Finance
(DBF)
or Progressive P3
Design
Build
Own
Operate
CM at
Risk
39 Alternative Delivery Continuum
52 P3s Are Not Free Money
A P3 is a project delivery method that provides greater risk transfer for delivery of infrastructure than traditional methods - not a funding approach.

Private financing and equity must be repaid. A funding/revenue stream must be in place and be “marketable” to ensure a viable P3.

Funding is the input (or sources) and determines the affordability of the project.

Financing is the output (and component of the uses), and value for money is measured by the WACC (Weighted Average Cost of Capital) against the risk transfer and increased speed of delivery that it may provide. 4053
What's the Cheapest Cost of
Financing?
The cost of financing an infrastructure project
privately is roughly equal to the cost of
financing it publicly after factoring in the
costs associated with the risk of losses
(overruns, delays etc.) from the project, which
taxpayers ultimately bear.

Congressional Budget Office, Jan. 2020
4154
Download a Copy:
4255
DEMAND
RISK
Revenue
(Sources)
Transparency for Taxpayers: Buckets of Risk

LIFECYCLE
RISK
THREE THINGS YOU CAN DO WITH RISK – Retain, Transfer, Mitigate

COUNTERPARTY
RISK
Creditworthiness
Appropriations

COMPLETION
RISK
Design
Cost
Schedule
Site Conditions
Land Acquisition
Entitlement
Permitting/Environmental

DEVELOPMENT
RISK
Maintenance/Repair
Energy Sources
4356
44 Risk Transfer by Delivery Method
57 • Contracting Models: Availability payment vs. revenue risk vs. hybrid models • Risk Allocation: Assign risk to the party best able to manage it (design, construction, revenue, O&M) • Performance Standards: Tie payment to performance and long-term outcomes • Revenue Model: Understand user-fees vs. public-backed revenue streams • Contingency Planning: Plan for off-ramps, lifecycle adjustments, and dispute mechanisms • Establish contract management team to provide oversight over the life of the contract 45 Aligning Incentives, Managing Risk on P3 Projects
58 Optimum VfM
Risk
Value for Money
Optimum VfM
Risk transfer is akin to buying
insurance and has a cost
Undertransfer destroys value
and Overtransfer destroys
value
4659
Timing of VfM Analysis
A VFM analysis generally begins after the environmental permitting process is well underway. As a “sanity check” risk workshops and market soundings occur prior to starting the actual procurement process.  Environmental
permitting
process
 Risk Workshops
are held to identify
major project risks
and determine
their allocation
 Industry Forum and
One-on-One meetings
with potential bidders
 RFQ Released with
draft agreements
 Preferred Bidder
 PDA executed with fixed
budget, schedule, and scope
 ATCs/AFCs
 Briefings and presentations
with stakeholders including
utilities
 Construction
begins
 Feasibility Study/Value for
Money Report is completed
to investigate all Project
options
 Market
Soundings
 Industry
Outreach
 RFQ RFCs
 SOQ Submittals
and Interviews
 PDA activities
 VFM confirmed
 Commercial and
Financial Close
4760
Getting started
Managing Consultants
Remain in control of the process. Take into consideration the advisors’ advice but retain the role of decision-maker and providing the voice for the agency.

Owners should be comfortable with seeking additional input if their advisors make recommendations that are new or foreign to the usual processes.

Aligning Public and Private Incentives
Goals and incentives for all parties must be aligned for a successful project. This can be achieved through honest negotiations and communication between all parties.

The private partner should be motivated to deliver and manage a quality project.

Early Private Sector Engagement
Market sounding should begin before ideas are fully set, but after some initial planning.

Early discussion on risk can test if assumptions match-up with the industry perceptions.

Political Support
A political champion is required to help guide the project through key points.

The owner should ensure that a key political advocate(s) is deeply engaged in the project and can help guide these sensitive issues to assist with ensuring buy-in from local business leaders. 4861
Ensuring competition
How do you become attractive to the
private sector? How do you share your
story and attract competition?
One of the key drivers for the successful development of a P3 project is a well-defined, properly structured procurement process that encourages private sector companies to bring forward their best people and ideas.
4962
• Define the Strategic Vision
• Clear Project Definition: scope, performance outcomes, and desired public benefits • Conduct Rigorous Project Preparation
• Political and Stakeholder Alignment: Internal and external buy-in to avoid derailments • Develop a Transparent, Competitive Procurement Process • Legal Authority: Confirm enabling legislation and procurement pathways (e.g., LGC 271.908) • Market Sounding: Engage industry early to test market interest and calibrate risk • Public Sector Capacity: Assign internal leads, bring on advisors, use decision gates • Craft Robust, Performance-Based Contracts
• Align Financing Strategies
• Plan for Oversight and Long-Term Stewardship
50 Laying the Foundation for a Successful P3
63 • Transparency and Fairness: Clear evaluation criteria, conflict-of-interest policies • Shortlisting & Competitive Dialogue: Drive value and innovation in pre-development • Output Specifications: Focus on performance outcomes, not how-to instructions • Timeline Discipline: Set realistic milestones, enforce deadlines • Debriefs: Provide feedback to unsuccessful bidders to maintain market confidence 51 Proven Procurement Practices
64 The Procurement Process
One of the key drivers for the successful development of a P3 project is a defined, properly structured procurement process that encourages private sector companies to bring forward their best people and ideas.

The key stages of the procurement process include:

ISSUE RFQ
(with DRAFT

AGREEMENTS)
SELECT

QUALIFIED

BIDDERS

ISSUE RFP
(with AMENDED

AGREEMENTS)
SELECT

PREFERRED
BIDDER (then

EXCLUSIVE

NEGOTIATIONS)

FINANCIAL
CLOSE
RFQ document
issued inviting
teams to submit
qualification
credentials
Shortlisted teams
chosen based on
qualification criteria
RFP documents
released including
project agreement
and technical
requirements
Preferred bidder
chosen based on
evaluation criteria
included in RFP
Preferred bidder
executes project
documents
(commercial close)
and closes project
financing

PREPARE FOR

PROCUREMENT
Define the project to be
procured, preliminary
performance
metrics/payment
mechanism, and
preliminary draft
of project agreement/
technical requirements.

P3 Only
5265
Difference in procurement approaches and impact on Life-Cycle considerations All
• Contract Management: Dedicated team to monitor milestones, compliance, reporting • Change Orders & Disputes: Use of Dispute Resolution Boards, formal change protocols P3s
• Performance Monitoring: KPIs, reporting dashboards, independent inspections • Lifecycle Maintenance: Ensure O&M and Handback provisions are enforceable • Adaptability: Anticipate project evolution—especially in long-term concessions 53 Managing Through the Lifecycle
66 • Post-Mortems: Capture and share lessons learned
• Knowledge Management: Build internal systems to retain institutional knowledge • Internal Champions: Train a core group to lead and replicate successes • Continuous Market Engagement: Keep communication channels open with industry • Portfolio Thinking: Structure programs—not just projects—to build consistency 54 Keys to Long-Term Success
67