NYC hires Greenhill to advise on PPPs

New York City has chosen investment bank Greenhill & Co. to advise on potential public-private partnerships (PPPs) in parking and real estate.

Following a March request for proposals, the city received 12 responses for the PPP advisory contract, according to a spokesperson for New York City Mayor Michael Bloomberg. The city’s Economic Development Corporation approved the contract with Greenhill earlier this month.

While Greenhill will be retained as general advisor, New York has asked the investment bank to focus on assessing and executing PPPs for the city’s on-street parking systems and the city’s owned/occupied real estate portfolio. The contract specifies that Greenhill will not receive compensation unless a successful PPP is executed, according to a spokesperson for the Mayor’s office.

In his 2010 state-of-the-city address, Bloomberg said he aims to reduce the city’s real estate portfolio by 10 percent, or about 1.2 million square feet, in order to save the city $36 million in annual lease costs and $4 million in annual energy costs.

In an interview with Infrastructure Investor earlier this year, Stephen Goldsmith said the city would evaluate prospective PPP consultants on their “creativity and sensitivity to local conditions” as well as their ability to advise on financial terms.

“We’re not interested in selling future revenue streams to private cost of capital, so we’re looking for more creative PPPs”, he said at the time.

Rob Collins, managing director and head of the Americas infrastructure advisory practice at Greenhill, said New York City has taken a distinctive approach to PPPs. He emphasised that the city “wanted to focus on new ideas and new structures” rather than traditional models for monetisation of the city’s parking or real estate assets.

Collins declined to comment on specifics of the proposed parking or real estate PPPs, but said their structures are “likely to set a new standard” for US PPPs.

“We'll see actionable transaction structures that come out of these different [PPPs] that can be replicated across the US,” Collins added.

Greenhill has advised on deals including the $11.4 billion acquisition of UK water company Kelda Water by Citi Infrastructure Investors, GIC Special Investments, Infracapital Partners and HSBC.

Earlier this year, the firm hired former Pennsylvania Governor Edward Rendell as a senior advisor focusing on PPPs and infrastructure, as well as “advising governments on a wide range of financial matters”, according to a previous statement.

In addition to infrastructure, Greenhill focuses on sectors including communications and media, real estate, consumer goods, technology and healthcare, according to the firm’s website.