Gov. Phil Murphy, joined by state lawmakers and other dignitaries at The College of New Jersey in Ewing, on Tuesday signed a law to expand the state’s dormant public-private partnership program. — Courtesy: Edwin J. Torres/Governor’s Office
By Joshua Burd
Gov. Phil Murphy has signed legislation to allow developers to partner with government entities for projects on publicly owned land, reviving and expanding a popular law that has helped reshape several of the state’s college campuses in recent years.
The public-private partnership bill allows government bodies including school districts, municipalities, counties and state entities to enter agreements with the private sector for new building or infrastructure projects on their land. As part of the agreement, the private entity would assume the financial and administrative responsibility for the development, construction, reconstruction, improvement and other work tied to the public-private partnership.
Murphy signed the bill on Tuesday at The College of New Jersey’s Campus Town development in Ewing, a project by PRC Group that served as one of the most high-profile examples of such partnerships. An earlier version of the so-called P3 program, which expired in 2015, restricted the opportunity to land owned by public colleges or universities, but the new law expands it to other types of government property.
“Today, I’m proud to enact bipartisan legislation that gives our communities greater opportunities to benefit from commonsense public-private partnerships for essential construction and capital projects,” Murphy said. “Democrats and Republicans alike recognize the tremendous benefits that can arise when public officials and private sector partners work together.
“By doing so, we give state, county, and local officials the much-needed flexibility they need to improve their communities while creating good-paying new jobs — in most cases good, union jobs — while leveraging private capital to invest in public infrastructure.”
Sponsors of the legislation, S865, include Senate President Steve Sweeney, Sen. Steven V. Oroho, Assembly Speaker Craig Coughlin and assemblymen Louis D. Greenwald, Jon M. Bramnick and Joseph A. Lagana.
According to Murphy’s office:
The new law requires local public input and finance controls, as well as land use and financial approvals, should a municipality, county or school district seek to pursue a P3. If the agreement includes the lease of a public building, road, infrastructure or facility in exchange for upfront or structured financing by the private entity, the term of the lease may not be longer than 30 years.
The law also requires that workers employed in the construction, rehabilitation or building maintenance services of a project be subject to what’s known as prevailing wage in New Jersey, which is essentially union labor. Projects must contain a project labor agreement, while the general contractor, construction manager, design-build team or subcontractor for a project must be registered and classified by the state to perform work on a project.
Additionally, the legislation allows for eight statewide roadway or highway projects that require not only private investment, but also public support of at least $100 million. For local projects this limit is significantly lower at $10 million.
A private entity is required to establish a construction account to fully capitalize and fund the project, while the general contractor, construction manager or design-build team is required to post performance and payment bonds to ensure the completion of the project.
The legislation prohibits the bundling of multiple projects. All projects are required to undergo a procurement process established under the bill, while the state treasurer will provide financial oversight and approval of all P3 agreements.
The original version of the program, created by a 2009 law, first served as the catalyst for a major redevelopment at Montclair State University. In addition to Campus Town in Ewing, it also led to several ongoing projects at land owned by New Jersey City University in Jersey City, under the $400 million project known as University Place.
