infrastructure and water conundrums. As nations suchas China and Australia are outstripping the US in terms of waterwaste management and infrastructure funding, there needs to be asocial, financial and political reformation to move forward quicklyto make up lost ground and, eventually, keep pace with the rest ofthe world and our country's structural demands. GlobeSt.com caughtup with Ernst & Young's Global Real Estate Leader Howard Rothat ULI's Spring Session 2010 to discuss what the US has to do topull itself back from the brink.

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GlobeSt.com: So the US has fallen behind the rest of theworld in infrastructure. What should we be doing? What can we bedoing?

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Howard Roth: Well, there's a number of things laid out inthe report, but I think there are two main things. Theestablishment of a National Infrastructure bank. Right noweverything is being funded state by state. We need a mechanism toset policy, prioritize projects and find ways to attract privatecapital. There are public-private partnerships, but very little.There are mechanisms in Europe which aligns capital, servicesgovernment investors, policy, but that's just not the case in theUS.

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The other piece is conservation and monitoring and paying forthe cost of infrastructure. The US is [not accustomed] to payingfor infrastructure, the cost has been [generally] free. [The US hasto start considering] toll roads, monitoring usage, etc., forfairly valued payment. Infrastructure costs more than Americanshave ever paid, but that's not the way everywhere else. The US hasto come to grips with paying fees and costs.

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[Right now] we have deficient roadways, levees, bridges, youname it, and there is a huge investment needed for infrastructureand there has been a lack of private capital to invest ininfrastructure.

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GlobeSt.com: So, there should be a public infrastructurefor prioritizing projects, but privatized funding.

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Roth: Australia and Europe has this defined model.There has been some push and an impetus for that here, but ithasn't taken off, partly because of the recession and debt capital.In certain cases there has been social push back [on the idea ofprivately-owned infrastructure]. [Most Americans] don't want theirbridge to be owned by a private equity fund. There arepsychological hurdles the US needs to get over.

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GlobeSt.com: There is some trepidation with sustainableretrofits because there aren't a lot of solid numbers regardingsavings. How do you convince owners and landlords that they need tobe making these changes?

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Roth: There's a real paradigm of green and how doyou commercialize it. I think that about 80% of green means energysavings, so that makes the investment commercially viable.Efficient lights, windows that keep in heat, etc., you really canevaluate and talk about savings versus existing infrastructure andI'm seeing some of that now. I think of the Empire State buildingand clearly they thought it was worth it [to retrofit] and thatcost/benefit analysis applies. You have to ask yourself, does thevalue of the building go up?

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GlobeSt.com: How do you clean up the water? Subsidies tofarmers for more natural farming practices? Smallercommunities?

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Roth: It's a combination of things. The measureslaid out in the report: storm water reusage, gray water,desalination, etc. Australia already has some tried and truemechanisms, we can learn from or look to as examples. It's adifferent mindset.

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GlobeSt.com: Right, but in a country that has a seemingfetish for red tape, how do you get these changesenacted?

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Roth: It's a challenge. Infrastructure is nodifferent than anything else in our political process today andunless it's absolutely essential, it becomes a stale mate. TheNational Infrastructure Bank would be a very good idea. It willbring a national focus, a method to prioritize projects and throughthe process of bringing a way to integrate the solutions for urbanplanning and commercial development. We're not integratinginfrastructure needs across state lines, right now.

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Holistically, that's how it comes about. I'm not sure thefederal government is in a better position than the local and stategovernments, but the Infrastructure Bank can attract capital and dopublic-private partnerships and get them to the highest priorityprojects.

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