Part 1_The LIN Concept: Understanding Land, Infrastructure & Nationhood

[Emile Sissac Jr.]

Black Infrastructure Organization Presents

The LIN Concept:

Understanding Land, Infrastructure & Nationhood

A five-part series of reports demonstrating the fundamental structures behind the business of nation-building.

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Introduction

Land. Infrastructure. Nationhood.

It is these three fundamental elements that have been determined by the Black Afrikan Infrastructure Organization as necessary in building a new nation for Progressive Afrikans throughout the Afrikan Diaspora.

Without land, a people will remain in endless poverty if they don’t either control it or have vested interests in its development. Without a physical infrastructure, the same people will be forever curtailed in the conduction of unfettered commerce. And without the autonomy needed as an independent nation, the same people will remain vulnerable to the established laws and predominant culture of others.

As we review the dynamic and distinctive history of Afrikans within the context of the Western world, the sheer disappointment of perpetual mistreatment, failed expectations, and continuous, systemic relocation of our populated areas has rendered all as a disenfranchised people, and most often not by our own choice. New ways of thinking and fresher approaches to these persistent problems are obviously what’s needed. Therefore, land, infrastructure, and nationhood are the solution.

The LIN Concept: Understanding Land, Infrastructure & Nationhood is a five-part series of reports summarizing the basic building blocks used in the creation of a new nation. Each report will feature an overview of important factors that must be considered for the viability and future prosperity of Progressive Afrikans.

• Part 1: Land briefly explains the process of acquiring, developing, planning, and financing acquired land.

• Part 2: Infrastructure gives a preview of ten critical sectors of public infrastructure, as well as their importance to functioning societies, business, and commerce.

• Part 3: Nationhood will provide a synopsis of how a government is created, and its duties to promote the people’s interests.

• Part 4: Satellite Cities gives readers an introduction to fresh alternatives that are being implemented to serve growing populations across the world.

• Part 5: Nation-building: The Fundamentals provides a summary of building a new nation with four essentials: a name, borders, a currency, and people.

Feel free to leave your comments, questions, or suggestions about land, infrastructure, and nationhood, as we'd like for everyone to provide input with other like-minded Progressive Afrikans who share the same interests and passions for creating this new way of life.

About BAIO:

The Black Afrikan Infrastructure Organization is a diverse group of progressive individuals of Afrikan descent residing throughout the Western Hemisphere and Afrikan Diaspora, all of whom share a common interest in improving the quality of life standards for our people. Through the amalgamation of business development, skills mastery, entrepreneurship, advanced farming, education, S.T.E.M., international diplomacy, trade, commerce, and Afrikan arts and culture, BAIO is steadfast in its efforts to produce new solutions to modern challenges encountered across the economic, political and social realms of today's world. Its theory of Afrikan-centered progressivism has already been researched, documented and discussed; the time has now come to put theory into plans of action.

BAIO's motto is unapologetically resolute: "land, infrastructure, nationhood". By way of an absolute consensus among participating members, it has been determined that these three essential elements are fundamental in realizing true empowerment and independence for contemporary descendants of the Trans-Atlantic Slave Trade throughout the Afrikan Diaspora.

BAIO's main objectives include the acquisition of land for public and private use that will be generally planned upon concepts based on satellite city models; the design, development and management of an advanced physical infrastructure which implements S.T.E.M.-based technologies, alternative energy solutions, integrated transportation networks, modern ports, permaculture, advanced medical facilities and a host of other services; and the creation of the independent nation-state of Afrikstan, which will be administered by a representative government and chartered under the Constitution for the Republic of Afrikstan.

-The Editors

“The best way of learning to be an independent sovereign state

is to be an independent sovereign state.”

Kwame Nkrumah

Copyright © 2016 Black Afrikan Infrastructure Organization. All rights reserved worldwide. 

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Part One: Land

• Land Use Planning
• Regional Planning
• Unfettered Communities
• Agriculture, Commerce & Industry
• The Development Process
• Development Financing
• The Private & Public Sectors
• Summary

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Land Use Planning

The acquisition of land is perhaps one of the most important steps that a people can take toward securing their interests. There are a variety of methods that can be utilized to achieve this goal: land grants; land trusts; diplomacy; devolution; or outright conquest. (Devolution is the statutory granting of powers from the central government of a self-ruling state to govern at a sub-national level either regionally or locally.) Considering the fact that our current plight is not where it should be militarily nor logistically, a conquest of occupied land is the least viable option. Realizing this, the possibility of undergoing devolution under an existing country is an option at the very least if also highly undesirable, as it contradicts the overall goal of absolute, autonomous land ownership by Progressive Afrikans. Therefore, a more practical approach would be that of using an articulated, unconventional diplomatic approach as a means of building platforms for successful relationships, both short term and long term, which leads toward success of future ventures through interactions with interested parties.

Once land has been acquired through chosen means, the planning of land use is conducted for conventional purposes and future development. This initial phase requires several applications of civil engineering, such as geotechnical engineering, land surveying, and soil testing for example. These processes are a few of which are engineering prerequisites that must be applied before actual development of land, the extraction and fabrication of natural resources, and the beginning stages of regional planning. Geotechnical engineering involves preliminary investigations of the engineering behavior of earth materials including sub-surface conditions, chemical/mechanical properties, artificial soil deposits, specific site conditions, etc. A typical project may begin with a review of the project’s requirements in defining the material properties of a specific area to fulfill construction needs. Once completed, this data is then used to help in determining the correct types of natural disaster preparation applications, foundation requirements, and pavement sub-grade types that will be considered before allowing planned structures to be built.

Land surveying is the art and science of mapping and measuring land. Acquired data from land surveys are used to determine angles, areas, distances, directions, elevations, locations, and volumes of a specific area’s hydrographic and topographic features, for example, by way of GIS (geographic information system) and aerial mapping. GIS data can be graphically illustrated in a variety of formats generated through maps detailing specific profiles, cross sections and diagrams. There are several types of surveying techniques used to describe the complexity of land features, such as geodetic surveying and plane surveying, where geodetic surveying measures the true shape of the Earth and plane surveying utilized to measure its mean surface.

Soil testing is important for a number of reasons; but the most common analyses are conducted to calculate concentration levels of plant nutrients that are vital for agricultural purposes. Resident nutrients in soil such as chlorine, magnesium, manganese, nitrogen, phosphorus, potassium, sulfur, and zinc are key minerals that constitute good fertilizer for farming and other agricultural concerns.

Another interesting fact about land is that it has intrinsic value based upon the inherent natural resources and distinctive geographic features located within a chosen area. These assets, which can be commercially and environmentally manipulated to create enhanced value for its inhabitants, are often major determinants of how land is assessed, regulated, and controlled for both growth and sustainability of these areas.

Regional Planning

Regional planning is a subdivision of urban planning, concerning mostly specific land use plans, the placement of infrastructure, and community development across and within a selected area. By way of a comprehensive plan (also called a general plan), growth and development within various planned communities of the proposed region are monitored and updated to ensure that these soon-to-be populated areas fulfill their predefined character. Speculative factors such as changing demographics, housing demands, and commercial development can predict the changes that will predetermine land use policies for contemporary and future needs. Therefore, it is essential that comprehensive plans and regional policies are congruent with the desired vision created for populated areas.

Overall, the implementation of such plans involves the participation and interaction of a vast array of people deriving from different backgrounds and professions who share common goals, including private individuals, public officials, contractors, small businesses, developers, agency representatives, educators, farmers, scientists, etc.

Environmental impact studies are also conducted in accordance with the priorities of the comprehensive plan. This report provides an overall assessment of the likelihood of certain impacts to the environment as well as their effects to proposed living areas, whether it is anticipated changes in air quality, native vegetation, and intensity of planned land use, the amount and types of vehicular traffic, water quality, waste management, and recycling systems.

Regional planning also describes in advance the chosen living standards of prospective inhabitants of planned areas, including articulated urban design models, provision of public facilities and services, arts and cultural expression, conservation and maintenance of natural resources, safety standards, parks and recreation facilities, and economic development plans. Each of the aforementioned are discussed by major stakeholders and involved community members as they will relate specifically to planned areas. Established goals are then set via consensus, and converted into civic and commercial policies (i. e. regional codes & local ordinances) that reflect and enforce the values of these planned communities.

The nomenclature (naming process) of planned communities within regions help to both identify as well as define their desired character and chosen identity. The "Historic District of Garveyville", for example, could be a decidedly preserved area dedicated to showcasing the life and times of Marcus Mosiah Garvey, replete with a private museum, educational complex, recreation center, sports complex, entertainment & restaurant districts, sports center, and a private visitors park, all named in honor of the great orator and advocate of Black nationalism. The subdivision of this region would encompass 2500 acres (108.9 million square feet - 9.8 million square meters) of designated land within the region, with additional provisions for residential housing, private farmland, private schools and S.T.E.M.-based labs that provide advanced agricultural research opportunities beneficial to the Afrikan scientific community. The definition of how a particular community is conceptualized, designed, and planned is limited only by one's imagination.

General plans for regional areas are guided by charters and/or constitutions founded or written by autonomous governments (an example of the benefits provided by nationhood.) Planning decisions concerning land use under governmental jurisdictions are determined accordingly. It is this convention that typically establishes the framework for growth and development for an entire region, city, or state, ensuring continuity of design applications across all areas.

Unfettered Communities

Community planning involves the design and development of livable areas that are supported by economic infrastructures and strong social networks. Modern residential housing, consumer services, emergency management systems, private schools, public utilities, and food systems are but a few of the many components that contribute to a predetermined standard of living desired by its inhabitants. Also involved within this socioeconomic structure are local businesses and organizations that help reinforce a community's viability. Planned communities are the bedrock upon which nation-states are built, and are the true determinants of its success or failure. It is their key roles as consumers, providers, and beneficiaries across the economic and social spectrum which epitomizes the quality of life offered within these areas.

So, what exactly defines a community?

A community is defined as "a body of people living within the same place, under the same laws, who share the same values, and have agreed to pursue the same interests." Therefore, it is safe to say that people of like minds also share a vested interest in ensuring the community's success. Whether working, living, or playing, member activities are the life source of planned areas. All activities, whether private or public, help to keep the commercial and social machines of a local economy going, and performance-enhanced via a well-built, well-managed infrastructure. These aspects of a local economy allow for greater opportunities of sustainability, future planning, and continued growth through expert management.

There are, of course, many other important factors that are considered for implementation into the total framework of a community's overall design and development. Urban design, for example, allows private and public members to create unique built environments that complement the lifestyles of residents for maximum comfort and convenience.

Where is the best location for a state-of-the-art medical district?

How can green technology be utilized within residential and commercial areas in as many ways possible?

Where will business improvement districts (BID) be established to promote the commercial interests of the local area?

From the placement of public facilities, to the planning of regional transportation systems, every element of comfort, convenience, and productivity should be reviewed and considered in the overall design of a well-planned, unfettered community.

Agriculture, Commerce & Industry

In order for planned communities to sustain high standards of living, they must be able to support these lifestyles with an economy that perpetuates self-sufficiency, opportunity and enterprise. As stated in the previous section Unfettered Communities, it is the healthy (if not robust) performance and skilled management of an economy that provides the impetus for a community's viability. Not only is this achieved solely with the employment of state-of-the-art infrastructure, but also driven by key components contributing to an economy's overall functioning.

In this section, we will focus briefly upon three specific areas of a hypothetical economy: agriculture, commerce, and industry, to illustrate their basic importance and relevance to the LIN Concept as related to land use, land planning, and land development.

Who doesn't like good food??!!...

Imagine eating a savory dish of peppered steak and wild rice with steamed Brussels sprouts, with a sparkling goblet of red wine, topped off with an exquisite dessert of Southern-style brandied peach cobbler...(I'll stop here with the menu selection!)...Do we ever take time to think of where the beef strips, red peppers, rice, wheat, onions, grapes, butter, milk, honey, cinnamon, and peaches come from before we begin to dine? Most often we don't; yet each food type has an origin that all begins with agriculture. Agriculture is the science of farming which includes but is not limited to the cultivation of soil for crop growth; the management of virtually all farming resources; and the raising of livestock. Farming, therefore, is indeed a business that ultimately provides a variety of food sources, fibers, and other useful commodities that are vital to diets, health, and nutrition. As a nation of the 21st century and beyond, we can be assured that the business, and clear necessity, of farming will remain an indispensable part of community planning in the future.

By now, we know that acquired land is a very valuable resource, with farmland used in agricultural production being a primary contributor to such valuation. Farmers, ranchers, and other parties with agricultural interests have various types of financial options (including leasing) available to them in acquiring farmland for specific uses. Agricultural interests can be further exploited for its benefits to planned communities through land grant colleges to teach agriculture, private farming, or S.T.E.M.-related courses for all residents and ages. Agents, experts, and professionals in agribusiness, agriculture, and agronomics can be contracted to assist private farmers in relative areas such as resource conservation, environmental sustainability, farm banking and credit, mechanization, and food security programs for local food systems, all of which enhance farming's contribution to a local economy.

Since farming is indeed a business, a lifestyle, and a human necessity all rolled into one, we can safely say that the required management skills that would be needed by farmers, ranchers, and entrepreneurs will demand just as much business acumen and skills as needed in any other type of enterprise. Other factors that would need consideration before entering the business of farming are the type of farming one chooses to pursue; the practical use of ICT tools (information-communication technology) such as real-time production data, farming apps, etc.; financial management; human resources; consumer and market demands; and the inevitability of increased technological applications in the future of agriculture.

Commerce is defined as the aggregate activity of purchasing and selling goods and services on a macro level of an advanced economy. Our focus on commerce in this section is to show how acquired land is used for commercial development purposes, where real estate development enables the commercial, industrial, and business aspects of a local economy to flourish. Land-use planning for commercial and industrial activity is classified by the type of development desired by a community or region. The range of types can begin with real estate development projects designed and planned for mixed-use community settings that can include, for instance, retail stores, private housing, civic, and entertainment uses, to light industrial projects built for small-scale manufacturing, R&D (research & development), warehousing, and private transportation facilities. On a larger scale, development projects involving the design, planning, engineering, and construction of airports, passenger and freight railways, ICT, port authorities, and roadways, all of which are integrated into the physical infrastructure of a regional economy. We will explore the specifics of the subject of infrastructure in further detail in Part 2: Infrastructure.

As infrastructure is built and incrementally improved according to commercial and trade demands, the conduction and health of an economy improves as well. As stated earlier, the practice of urban design and urban planning allows for the creation of built environments for local inhabitants. When considering commerce and trade, whether for local, regional, or international purposes, the same principles are applied within the framework of land use, helping to decide such issues as where best to locate shopping districts, business parks, or open space for public use. Other factors such as environmental issues, noise levels, air quality, waste and sewage, and commercial transportation routes are also given heavy consideration with regard to how these issues impact commercial activities as well as the well-being of local residents. For example, you would not build a community of private residences very close to heavily-trafficked commercial routes that are frequently used by commercial vehicles and freight railways. The anticipated high levels of noise and other inconveniences of typical commercial activity would impede the expected comforts and normalcies of residential living.

When we refer to an industry, we are viewing the various processes of manufacturing and related services as a whole within an advanced economy. An industry is a group of companies that are related by their primary commercial activities performed within the same business, and are placed within a classification system based upon the primary product that is fabricated. Industry classifications are then broken down into sectors, which categorize all relative businesses by their largest sources of revenue. There are certain businesses whose operations can span across different sectors because of numerous sources of revenue. But whether a community plans to have a percentage of its economy created for the production of fiber optic products, or plans to pursue advanced product research for the biomedical engineering industry, it is the promotion of each sector for their inherent competitive (and creative) advantage that is prioritized for optimal economic performance.

Land use planning, therefore, should provide a sufficient supply of land that complements the feasibility of economic and industrial development. Such factors as reducing traffic congestion, maintaining the aesthetic qualities of industrial real estate development, and ensuring conformity with the community’s comprehensive land use plan should be achievable goals for long-term practicality. After all, this particular area of the region will become a major source of economic activity for inhabitants through the creation of well-paying jobs, a progenitor of increased business opportunities, and a substantial tax revenue generator.

The conduction of a land use inventory can help in determining the most appropriate type of industrial development that best fits the general land use plan. Such considerations as the size of light manufacturing plants, the location of business parks, the ingress/egress of freight transportation, and the resulting effects that industrial activities will have on surrounding areas are all major factors that must be reviewed discreetly before commercial development begins.

Let’s say that the community has agreed upon creating an industrial use area that will include a mixed-use commercial development project with provisions for industrial, office, and service uses. Each aspect of the development plan would have to be planned and designed for zones permitting such projects for retail and office space that specifically supports light industrial businesses. Within each zone, land subdivisions of small-to-medium-sized lots could be made suitable for office buildings, corporate suites, commercial showrooms, R&D centers, storage facilities, distribution centers, and other related building types, replete with high-quality architectural designs, beautiful landscaping, and traffic management systems. Perhaps placed on the periphery of this specialized area would be other complementary support facilities for employees and visitors such as restaurants, business hotels, daycare centers, and health fitness centers.

The Development Process

After land use planning has been determined, the full-fledged development process of a region or specific area can begin. With the aid of guidelines provided by the comprehensive plan, the intricate, multiplexed process involving various types of land development projects are converted in valuable assets, contributing substantially to an economy’s GDP (gross domestic product).

As a contributor to economic activity, commercial and residential real estate currently comprises a very large portion of investment portfolios around the world, often exceeding the value of other types of investments such as bonds and stocks in today's markets. This trend has grown increasingly over recent decades mainly due to the promotion of commercial laws and tax legislation promoting increased investments in real estate. From REITs (real estate investment trusts) to CMBSs (commercial mortgage-backed securities) to private equity funds, these are only a few of the financial tools that have been instrumental in helping the real estate industry become recognized as solid, long-term investments that have increased the increased amounts of available capital. But just as with any investment, there are down periods that should be anticipated in this industry, in addition to potential losses in property values and prolonged phases of slower development.

The primary player in the real estate market is the professional developer. It is this entrepreneur who fulfills market demands by utilizing architects, contractors, investors, and banks among others to convert ideas in reality. From the process of purchasing land to reviewing the final stages of a construction project, the real estate developer's primary role is that of orchestrating the entire development process through the multiple use of skills in marketing, management, communications, technology, finance, law, and politics.

It is the real estate developer who is charged with the full-time management of equity and debt financing that's used to fund projects; monitor the performance of capitals markets; and control construction costs with expert budgeting. Although substantial amounts of investments are committed for both short-term and long-term, the real estate industry is still very dynamic and can be slightly unpredictable. However this may be the case, it is the professional developer who must continue building valuable products that meet market demands as well as create extensive real estate opportunities.

The development process involves risks, timing, funding, and consistent monitoring of a project’s feasibility before becoming a successful task performed by the developer. Throughout the process, the end goal of providing a return to investors requires the perpetual use of key management strategies which help to cut losses as early as possible.

There are three stages of development for a typical real estate project: predevelopment, development, and close-out and operation. In the predevelopment phase, the project’s conceptualization and plan are created, where more than 80% of the project’s value is determined. Land acquisition, project design, site selection, site analysis, preconstruction planning, and financial analysis are but a few of the tasks performed at the predevelopment stage. Project costs range anywhere from 5% to 15% of the project’s budget.

The development phase is dependent upon contingency planning completed during the predevelopment stage. Again, it is proficient management and wise decision-making skills that will be used throughout the construction process in determining allowances for a project’s completion (or abortion) in its earliest stages to prevent losses for investors. What can go wrong during the development stage? Issues such as unexpected increases in material costs; the changing conditions in markets (financial, real estate, etc.); and changes in local politics are some exemplary problems that can arise unexpectedly. The professional developer, who is the motivator, trusted expert, and leader of the development team, connects a network of services from architects, contractors, engineers, financiers, lawyers, marketing experts, and property managers, all while communicating and monitoring the performance of the project. Eighty percent to ninety percent (80% - 90%) of total budget expenditures are committed to the development phase.

In the close-out and operation phase, numerous conditions for the selling and leasing of completed projects are determined by the marketing of a completed project. The real estate industry, when viewed by sectors (office, retail, industrial, etc.), can require certain methods for sales, leasing, and property management based upon various types of customer profiles, capital funding requirements, or the unique characteristics of the finished product. Some projects may be presold or preleased, before construction begins; others may be sold and marketed to potential buyers after the project’s completion. In either case, the real estate developer has the task of managing available capital before, during, and after to strategically close-out construction and start the process of moving tenants in to further reduce risks, additional costs, and increases in inventory. The close-out and operation phase can comprise 5% to 8% of the total project cost.

Successful completion of a real estate development project is accomplished through using four essential elements: values, information, financial viability, and relationships. Development is a values-driven process through which a project’s value is manifested. It is also an information-driven process, where accumulated information reduces uncertainty. Financial viability renders development as a capital-intensive enterprise with large upfront costs and risks that require continuous testing and evaluation. And lastly, development is a relationship-based business, where integrity and honesty are critical for success. There are eight primary sectors within real estate development, with each having unique customer and financial profiles. Some of these are: land development, retail, office, industrial and lodging.

Financing For Land Development

Financing for land development of planned areas is an integral part of land development and benefits all stakeholders. It is also critical to the success of economic development of these areas as it encourages and catalyzes economic growth. Projects that are well-financed create economic benefits over the long term for an area’s infrastructure, businesses, and key industries. There are a variety of financial instruments that are utilized to perpetuate economic growth and stability, ranging from tax credits for potential investors, to block grants from the state, to municipal bonds that can finance multiple projects having both private and public origins.

One of the primary endeavors for securing financing for land development is to build a public infrastructure that can be used by inhabitants within a state or selected region. A well-built infrastructure that includes, for example, state-of-the-art roadways, water facilities, and airports enable both private and public activities to flourish, as well as enhance economic performance and raise living standards.

The municipal bond market undoubtedly plays a key role in financing the development of land and infrastructure across the globe. Municipal bonds allow governments to finance public projects of nearly all sorts, generating sources of public revenue that are needed to manage and maintain services for users of public infrastructure. Essentially, governments borrow money from investors to pay for capital projects like roads, bridges, and transportation terminals. The acquired capital is then used to fund the project. Since most projects will benefit users as a necessary public service, the users generally pay a tax or fee for the service (or benefit). Public taxes and fees contribute substantially to a government’s revenue, where these funds are then used to administer public assets and services within the state’s infrastructure.

When a municipal bond matures (expires), investors receive a yield, which is a form of financial compensation received by the investor for increased rates of inflation and interest that typically occurs over the life of the financial instrument. Therefore, it is not unusual for governments to issue municipal bonds of various forms to finance state or local economies, as well as provide necessary public services, or even create public banks that enable independent funding for future projects and other programs. Other types of bonds that may be issued by governments in the bond market are: general obligation bonds (which are issued as a debt security by the full faith and credit of the government); revenue bonds (which are commonly used for public facilities to stimulate private investment for say, a new airport terminal or advanced sewer systems); land-secured bonds (used to pay for infrastructure immediately related to specific land development projects); and mortgage revenue bonds (which are used to fund residential mortgages for single-family and multi-family housing markets).

Tax increment financing (TIF) is another funding source used by governments via developments agencies. These agencies receive funds from property taxes via increased property values, and use TIF funds for specific projects to pay off debt. TIF funds can also be used to repay tax increment bonds, are tax-exempt, and help stimulate private investment.

Land, as an asset owned by governments, can be used as a medium of exchange within public-private partnerships (PPPs) via land assembly and conveyance. This method allows public agencies to convert land into income-generating opportunities through long-term leases.

State and local governments can provide economic assistance for land development with grants and incentives that encourage the creation of needful projects such as affordable housing, or the promotion and implementation of “green building” technology throughout a region. Community Development Block Grants are perfect examples of direct investments made by the state to fulfill special needs of a population.

Tax credit programs that are used to create public benefits are yet another source of financing used for land development and real estate projects. These programs can also be used with other private/public financing sources to create a capital stack (layers of invested capital into a project) for different types of projects.

As a result of the Great Financial Crisis of 2008, virtually all financial activities across the world, including those performed by both public and private entities, have been greatly curtailed in all aspects of the business world. This includes efforts in infrastructure and land development, with newer trends emerging for expenditures in infrastructure development, economic stimulus programs, the financial credit markets, and funding limitations that unfortunately constrain governments. In 2016, not much has changed in the condition of financial markets globally, including debt capital markets where the majority of bond financing for land and infrastructure development originates. At the same time, there are still pressing needs that have to be met within states and regions, even as a push for new financing models are developing between governments and private investors (of all classes). One of these new models on the rise and becoming more frequently utilized is the public/private partnership (PPP).

But even as PPPs increase in use, credit markets are tightening, along with longer time periods for approved contractual agreements and transactions toward fulfillment, and at higher costs. Many governments are assuaging the current credit crisis with variable ranges of capital structures from investments in public/private partnerships to avoid stalling infrastructure projects. As a result, equity returns for investors will be lower and received throughout longer time frames, and may eventually lead to the frequent use of extensive long-term investment strategies for financing of future projects.

Other techniques and methods of financing are also being investigated to continue stimulating interest in the markets to maintain or increase investments. Co-funding allows a government to provide a portion of required funding as a way of allowing interest rates to reduce financing costs for private sector investors, therefore permitting the completion of larger projects while strengthening confidence in the financial markets. Capital contributions by the state, in either the preliminary stages of a proposed project or near its completion, also helps to retain the continued activity of infrastructure projects. A government can also be supportive in its actions for funding by extending credit or liquidity to stimulate private sector debt funding, either partially or in full. Capital debt funds, which are an amalgamation of multiple investors that may include pension funds, insurance companies, and the state, are used to invest debt that focuses on specific sectors of a state’s economy, i.e. utilities, transportation, or social infrastructure (schools, universities, community housing, etc.). Infrastructure trusts are relatively new to the investment world, and mainly focuses upon major projects proposed for a particular region (districts, cities, etc.). Acquired funds for these types of trusts derive primarily from institutional investors and are directed toward specific improvements involving infrastructure related to the enhancement of energy efficiency, trade corridors, or the development of free-trade zones for a region.

The Private & Public Sectors

Public/private partnerships (PPPs) are like a mixed bag of goodies for both the public and private sectors. The major attributes are (1) they increase a project’s viability through the ready participation of players in both sectors; (2) they help in creating value by building products for multiple market segments; and (3) PPPs are generators of public benefits through the initiation of area-specific programs for economic development, affordable housing, area revitalization, tax base stimulation, and most important to BAIO, as a good source for infrastructure finance.

The key to maximizing the success of public/private partnerships is that of mastering the art of formulating and executing a genuine plan, especially one that defines (a) a clear purpose; (b) a template for preparation; (c) cooperation between involved parties; (d) a review of financing tools; and (e) the use professional standards.

So, just what is a public/private partnership?

A PPP is nothing more than public capital that is used for private development projects. A private developer (the private sector) responds to the needs of an agency under state administration (the public sector) and fulfills commercial and economic voids with development in the infrastructure, land-use, and real estate sectors with assets of value. The major incentive for developers who join public/private partnerships is the reduction of entitlement risk, allowing the process for high-quality development by private developers while involving public agencies, and both sharing benefits and costs justly. The process of making a PPP is intentionally simplified, mostly by streamlining for required permits and construction financing needed in the production of good, marketable development projects.

Public/private partnerships can be created for practically anything related to land development (and redevelopment), site access, site cleanup, infrastructure improvements, and land reconfiguration. Throughout the world today, this form of partnerships between governments and private sector participants are used to clean up contaminated industrial sites and former war zones; rejuvenate the commercial aspects of outdated retail centers; and redevelop airfields that occupy infills within growing metropolitan areas.

The basic financial model of a PPP involves investments by both public and private partners, with the state recognized as a source of available debt funding that compensates or matches private equity funding used by developers and investors. Once a specific project has been completed by a public/private partnership, the resulting co-investments help to stimulate more private investments into sequential commercial and real estate projects in surrounding areas for more retail space, residential housing, mixed-use projects, parks, and the redesigning of landscaping for open spaces.

Through the involvement of nearly all of the community’s stakeholders (businesses, developers, community groups, private residents, etc.), the vision of achieving public benefits from private development through the use of a public/private partnership is a key task undertaken via consensus of participating members. How businesses, communities, developers and public agencies work together to achieve desired results is based upon mutual trust, the community’s ownership role, and an articulated relationship model designed specifically between the public and the private entities. As the project progresses, the transparency of the PPP’s entire operations concerning funding, management and project economics are well exposed to all entities involved, lessening confusion and mistrust.

Summary

We hope you have enjoyed reading the introductory report of The LIN Concept: Understanding Land, Infrastructure & Nationhood. In Part 1: Land, we briefly explored the subject of land use planning; planning for future growth within a region or state; the role of land-use planning in building an economic infrastructure for agricultural, commercial, industrial, and private purposes; the development process and financing methods used for acquired land; and the utilization of public/private partnerships to generate public benefits for economic and social means.

Several applications of civil engineering are used to investigate the innate behavior and unique properties of Earth materials within a section of land, all of which are performed before the allowance of building planned structures within the investigated area.

Comprehensive plans (or general plans) are used as a guide by communities, public agencies, and developers to fulfill desired outcomes for a planned area. The dynamics of changing demographics, housing demands, future growth, and commercial development are but a few factors that will need acute consideration for both contemporary and future needs.

Planned communities are basically an aggregate body of people who agree to pursue shared values and interests, while also playing vital roles as consumers and beneficiaries within an economic infrastructure and social networks of a community. Also as recipients of a higher standard of living, they also enjoy the accoutrements of well-planned urban design models that are implemented into built environments.

Land is a multifaceted source of wealth for an independent state, and can be legitimately recognized as possessing intrinsic value when considering its unique features overall. A local economy perpetuates self-sufficiency, opportunity, and enterprise through the use of agriculture (food security), commerce (buying and selling of goods and services), and industry (concentrated specialization within a specific sector of on economy by a group of related businesses, i.e. manufacturing). Through the employment of a modern infrastructure, a local economy maintains (or even enhances) its performance and overall operations with these key components with expert management, logistics, and planning.

The development process of acquired land is intricate and multiplexed; but it is here where greater value is created with land development projects designed for infrastructure (hard and soft) and real estate (commercial, industrial, and residential). Investments in the real estate market globally are huge; and the major impetus behind such financial activity is the professional real estate developer, who fulfills market demands, purchases land, and orchestrates the entire development process with knowledge and skills in marketing, management, technology, communications, law, finance, and politics. The three stages of a typical real estate development project are predevelopment, development, and close-out/operation. A successfully completed project is accomplished through consistent use of values, communication, financial viability, and relationships.

Public infrastructure, businesses, and key industries within a region all benefit from land development projects that are well-financed through a variety of financing sources, ranging from municipal bonds to tax increment financing to infrastructure trusts. The worldwide Great Financial Crisis of 2008 has resulted in huge impacts affecting the financial markets even to this day, including the availability of debt capital sources for bond financing typically used for most infrastructure development projects.

However, newer financing models are being used more frequently today between private and public entities, such as the venture model of public/private partnerships, where public capital is used for private development projects to create value, generate much-needed public benefits, and is emerging as a popular alternative for source funding for infrastructure finance.

Suggested Reading

1. “Land Development Handbook: Planning, Engineering, and Surveying” - The Dewberry Companies

2. “Farm Management” – Ronald D. Kay

3. “Investing In Municipal Bonds” – Philip Fischer

4. “Finance For Real Estate Development” – Charles Long

[Dwayne K Makala]

Thank you brother!