What's Different About P3s This Time Around?

MIAMI—Public-private partnerships (P3s) are nothing new, but with major infrastructure projects rising across the Southeast the nature of some P3 projects is changing—and accounting firms are smack dab in the middle of the fray.

Globest.com caught up with Darryl Sharpton, CEO of The Sharpton Group, a Miami-based account firm, to get his take on public private partnerships in the new era in part one of this exclusive interview. Be sure to come back this afternoon for part two, in which Sharpton will discuss the most exciting projects he sees in the area and what real estate developers should do before they begin assembling funding for a project.

GlobeSt.com: You have been an accounting firm for 30 years. Why are you shifting your model now?

Sharpton: We are not so much shifting our model as we are sharpening our focus. With more investment pouring into South Florida than any other metropolitan region in the US, there is a growing need for trusted oversight in the areas of construction, budget management, and operations.

As a locally based, independent consulting firm with an understanding of the regional economy and political landscape, we believed we were well equipped to fill this void. To this end, we are enhancing our consultancy work while still maintaining traditional accounting services, such as audit and operational review.

GlobeSt.com: How do you evaluate the economic impact of a major infrastructure project?

Sharpton: Analyzing the economic impact of a particular project typically involves accessing a wide range of financial and economic data to generate estimates of economic output, GDP, employment, and tax revenues associated with changes in the level of economic activity resulting from the project or industry being analyzed. Our team then methodically selects appropriate multipliers to the underlying data to determine the overall economic impact a project would bring to a region both at the outset and over time.

GlobeSt.com: How has this cycle fueled public-private partnerships in a way that wasn't being done before?

Sharpton: During the recession, state governments increasingly turned to public-private partnerships (P3s) to finance new infrastructure projects or maintain existing assets. As our economy recovers and new investment pours in, municipalities have continued to view P3s as a viable strategy for sustaining growth and filling persistent budget gaps.

While this approach has helped usher in many critical projects otherwise impossible to fund, with it comes a greater responsibility for oversight. All states that permit privately financed P3 contracts impose rules to ensure accountability and protect the public from poorly designed financial agreements.