Public Good Trumps Private Benefit in Partnerships

SAN DIEGO-Remaining true to the public good and the California Constitution is of prime importance since the dissolution of redevelopment agencies in California. While the partnering of cities with private entities as an approach to economic development is gaining momentum as tax-increment funding has disappeared, at the heart of such partnerships is the city’s responsibility to ensure that the public purpose outweighs the private benefit, said speakers at a recent Urban Land Institute San Diego/Tijuana District Council ULI @ Lunch program.

While the concept of public-private partnerships has been around for decades, the current economic situation has many people considering the viability of cities partnering with private enterprise for the improvement of the local economy. This is a smart move, but when it comes to balancing the public good with private investment, it “is not clear how far a city can go,” according to Elizabeth Hull, a partner with the law firm Best Best & Krieger LLP, who spoke at the ULI lunch program. For one thing, the California Constitution provides cities with general police power that includes some level of authority to pursue economic development, but court rules at the state and federal levels have given guidance that the public purpose of new development must outweigh any private benefit that may result from the project.