Indeed, after the big real estate bubble burst and the economic crisis heard around the world, it was amazing the toll it took on the construction, building, and architect sectors. Of course, another big problem has been the challenges with public funding for new schools, libraries, and other civic buildings. Where is that money going to come from.

Also consider the challenges with muni-bonds these days and the cost to insure against the default on such increased public debt. Okay so, we all realize this challenge and we are reminded by Meredith Whitney and her prediction that we will have 50-100 muni-bond defaults in 2011, and it is a fact that $15 billion screamed out of the muni-bond market after she made her prediction. And Meredith Whitney is no loose cannon, as she rightfully predicted the economic collapse too.

What can a city do? Well, as some cities, counties, and state governments are selling their assets, often renting or leasing the properties back in an attempt to shore up their rising financial deficits. Many cities have sold their libraries, parking meter concessions, parking structures, and other properties to the private sector to run. Does that make sense?

It might, we know that free-enterprise can do things more efficiently than government can, and we also know that many government agencies have no choice. Consider if you will the option of having a project done from architectural design to construction to operation under a contract and agreement with the city, county, state or other agency?

In fact, there was a very interesting piece in the Wall Street Journal (in the architectural section) titled “The Public Option: Parks and Libraries Soar” by Julie V. Iovine. It was a great piece, which if this topic interests you, I believe you ought to spend the time to look up online and read it thoroughly. The piece talks about several rather serious real estate projects and public-private partnerships which have been designed and built.

Okay so, if a city guarantees the contract for a 10-20 year period, enough for a commercial enterprise to guarantee their investment, it could save a bundle, and would also forgo the increased legacy costs, which are one thing which is causing the problem – pension funds, unions, health care benefits etc, which in the public sector have mushroomed into a huge and nearly impossible cost to fund.

State governments, counties, and especially cities have no choice but to consider such long-term financial strategies in the future. Indeed, I hope will please consider all this, and think on it. If you have any additional thoughts, comments, ideas, or concepts along this line, shoot me an email, let’s talk.