The Sale/Leaseback structure is quickly gaining popularity with Government leaders as they seek alternatives to tax increases as a means to generate income for their communities.
A P3 Connection solution allows our Government Partner the opportunity to obtain cash from an older Government-Owned facility while still retaining possession and full use of the facility.
This option also provides the Government Partner with the ability to renovate an older facility and spread the costs of construction over a longer time frame.
Please Note: The Government Partner retains possession and full use of the facility at all times.
Under this structure, the Government Partner sells a government facility or equipment to the Private Partner for the full market value or greater. If renovation is required, the cost of construction can be included in the payments.
The Government Partner then enters into a long-term lease with the Private Partner (typically 30 years). The Government Partner receives 100% ownership of the facility at the end of the lease term after a pre-determined buy-out (typically $1.00).
Advantages for your Community
Unlock Trapped Equity: Loans for many government facilities have been paid off or paid down considerably.
A Sale/Leaseback option will allow you to utilize that equity for other projects.
No Loss of Use: Government Partner retains possession and full use of the facility at all times.
Re-Purchase Option: Government Partner can purchase the facility for $1.00 at the end of the term.
Renovation Option: We have the ability to provide renovation services on most project types and can
include the expense in the entire funding amount. Government Partner can also
complete the renovations utilizing their own personnel or another construction team.
Accounting Benefits: Government replaces a fixed asset (real estate) with a current asset (cash). Lease
is typically listed on balance sheet as a footnote instead of a liability. This typically
results in an increased “current ratio” which normally leads to an increased borrowing
capacity for Government.