Hurricane Sandy was bad for business, and will be good for business, writes Beata Caranci, economist at Canadian-owned TD Bank, whose U.S. base is in Marlton. Big, ugly storms typically bring a drop in retail spending, home buying, big-business productivity, and small-business sales. But as repairs proceed, utility and Shore improvements will boost depressed Northeast construction employment, and "reconstruction may create an opportunity to usher in new and updated technologies," Caranci concludes.
Rebuilding the shattered Shore and the swamped New York tunnels, along with badly needed updates to the Northeast's exhausted roads and rails, will be an opportunity to implement streamlined construction laws backed by Republicans and pro-business Democrats in Congress and the states, says Frank Rapoport, Berwyn-based partner at New York law firm McKenna Long & Aldridge L.L.P., and counselor to contractors who support "public-private partnerships" (P3).
That's a label for a group of strategies that replace lengthy government-led construction with private contractors and financiers, financed by "sharing" user fees - like road tolls - once the project is built, instead of borrowing money and charging taxpayers.
Under a "P3" law Gov. Corbett signed over the summer, Pennsylvania has convened a committee of pro-development "rock stars" - Aqua America chief executive (and Philadelphia Convention and Visitors Bureau chair) Nick DeBenedictis, construction management veteran Ronald Drnevich, banker Michael Murchie, Laborers leader Ryan Boyer, State Rep. Steve Santarsiero (D., Bucks) - who will review project applications. For example, builders might propose projects to add toll lanes on I-95, a second deck on the Schuylkill Expressway, a toll bridge on Route 422 over the Schuylkill, and other projects to be funded through future tolls instead of borrowed money and taxpayer annuities. The system "streamlines" building by cutting back on change orders, fee disputes, and other common delays, "because contractors work fast when they're not yet getting paid," says Rapoport.
At a Harrisburg meeting attended by 150 contractors and allies the day former U.S. Sen. Arlen Specter was buried, Corbett's secretary of transportation, Barry J. Schoch, who heads the committee, promised to review applications in early 2013, which would get projects started by summer, according to Rapoport.
He also praised a new federal law that allows road-reconstruction projects to proceed without time-consuming new environmental analyses in cases where environmental reports were done years earlier. "Why do it again?" Rapoport says.
P3 funding - which Corbett's predecessor, Democrat Ed Rendell, also supported and has continued to champion in his part-time retirement gig as an investment banker for Greenhill & Co. - is coming along "just in time" to aid in Sandy reconstruction, Rapoport says. Virginia is pushing a high-profile, privately run, toll-funded expansion of I-495 that P3 backers call a model. Pennsylvania "is following Virginia and Texas" in pushing privately run public projects, he added. Cash-strapped Puerto Rico is using P3 projects "for everything from bridges to schools."
P3 is spreading, says Rapoport: After Pennsylvania, "Now we're working on [Gov. Christie] in New Jersey. And I think Gov. Cuomo in New York will come around. These three Northeastern states, we've got a lot of old infrastructure that needs fixing."
ImPACT 2012, the 20th yearly conference of what is now PACT, the Greater Philadelphia Alliance for Capital and Technologies (formerly Rob McCord's Eastern Technology Council and the Greater Philadelphia Venture Group/MAC Alliance), takes place Nov. 7 and 8 at the Ritz-Carlton. More information here: http://bit.ly/X14dUe
Panelists and speakers include national and regional investment, tech, and media figures: AOL founder Steve Case, Vanguard Group chief executive F. William McNabb 3d, former Pennsylvania Gov. Ed Rendell, QlikTech boss Lars Bjork, Edison Ventures general partner Michael Kopelman, Comcast's Robert Pick, Genacast Ventures's Gil Beyda, Greg Driscoll of Blaschak Coal, Tim Wallace of iPipeline, Robert Carr of Heartland Payment Systems, and Fox Sports' Joe Buck among many others; and dozens of presenting companies - tech firms like OneTwoSee, health-care firms like Galleon Pharmaceuticals, energy firms like Graphene Frontiers, and many more.
What's the point? Ask Ned Moore, who in 2005 presented at the predecessor conference, connected with tech funder Safeguard Scientifics, and raised the capital that enabled him to expand his health-data company, Portico Systems, until it attracted a buyout from McKesson Health Solutions last year for $90 million; he's back this year, presenting as the boss of Clutch Holdings. Or Matt Gillin, who pitched an early conference as boss of eCount, later sold to Citigroup for a reported $220 million, enabling him to diversify in Philly's financial-tech community.