The private sector has a role to play in infrastructure development, but only if the public sector is a willing partner.
That was the message Wednesday from Community Investment Initiative leaders John Carter and Tom Imeson as they spoke at a breakfast question-and-answer session with members of the Columbia Corridor Association. They were there promoting the Regional Infrastructure Enterprise, a proposal to address the Portland region's $41 billion infrastructure funding shortfall.
In the session, Carter said the private sector shouldn't be in the business of taking over infrastructure projects. But, he said, the private sector has had a historic role in funding infrastructure and should continue to have a role if the public agrees.
"The private sector's role in this is to provide ideas and opportunities," Carter said. "It's not to make decisions about what the public wants. That's the public sector's issue. A lot of projects might get served up and run over because there's not the political support to do them."
Carter pointed to two projects he worked on when he was an executive at the Bechtel Corp. One was the MAX Red Line extension to Portland Airport, which cost taxpayers about $97 million. Bechtel added $28 million, was awarded the general contract to construct the line and development rights to some properties near the airport.
In contrast, Carter said, Bechtel some years ago proposed a public-private partnership to re-build the Interstate 5 Bridge across the Columbia River. He said Bechtel's option would have taken five years to complete, and warned that the alternative was doing nothing. Local governments declined Bechtel's offer.
It wasn't always that way, Carter said. A century ago, private enterprise ran ferries and toll roads in Oregon. That's when the government started building infrastructure for public purpose. Now, governments choose to spend money elsewhere.
"The reason there's no money for infrastructure isn't because the government doesn't have money, it's because they're doing different things with it than they used to," he said.
Meanwhile, the private sector is ready to invest.
"With RIE (the Regional Infrastructure Enterprise), what we're trying to say is the irony of the shortage of capital in the public sector for infrastructure is matched by the irony of the huge pools of capital in the private sector that have nowhere to go," Carter said.
Private sector investments in infrastructure, Carter said, end up creating wealth, which helps the government and business.
"Infrastructure jobs create jobs. Those jobs are real jobs. They pay good wages and have good benefits. It creates a tax structure base," he said. "It's hard to say that's something we don't want unless on some philosophical point you get hung up."
One breakfast session attendee asked how the Regional Infrastructure Enterprise would be different from other efforts, like Metro's economic development strategy and the work of the Portland Development Commission.
Imeson, the co-chair of the Community Investment Initiative's Leadership Council, said the Initiative and the Enterprise augment rather than replace those efforts.
"The hope here is that we would be looking at projects that are more regionally significant," Imeson said. "Down the road we might be able to bring some funding to bear that is regional in nature. It's hard to say how that would play out, but it's clearly to augment what we have now and not to supplant local efforts when it comes to local infrastructure development or economic development."
Later, Carter had a similar response.
"The focus and the reason for RIE (the Enterprise) is because if we can't create a way to bring new money into the region, which means money from the private sector, then all the rest of it is just another academic exercise," he said. "It's additive, not duplicative. It's not designed to create some kind of a tax revenue stream that takes other things away in the area. It's trying to do projects that have certain characteristics that make it attractive."
The gravity of the region's infrastructure funding issues was clear Wednesday. Corky Collier, director of the Columbia Corridor Association, stressed the importance of the conversation in the lead-up to Imeson and Carter's q-and-a.
"If we don't do anything, our quality of life suffers," said Collier, whose organization is an advocacy organization for businesses in Portland's industrial areas along the Columbia River. "If schools aren't doing well, new businesses aren't going to come here."
And later in the morning, Carter said the region is faced with a simple choice – is it ready to embrace change?
"When BART went over to the East Bay, that world changed," he said. "If you don't want to change, you're a lot like places in the San Fernando Valley where the average wage falls $2,000 a year.
"You can make the choice of poverty," Carter said.