A Goodwin Procter Publication
For The Real Estate Industry
Editor-in-Chief
Robert M. Haight, Jr.
Editors
Lewis G. Feldman
Edward C. Hagerott
John T. Haggerty
Christopher B. Price
Andrew C. Sucoff
John M. Ferguson
Douglas A. Praw
Production
Sarah E. Moore
Bridget C. Huffstutler
Nathan G. Leonard
Matthew Fetter
Matthew D. Trotter
Design
The Castle Press
www.goodwinprocter.com
Copyright© 2009 by Goodwin Procter LLP.
All rights reserved. Reproduction, in whole
or part, without permission is prohibited
.
This publication may be considered advertising
under the ethical rules of certain jurisdictions
and should not be considered legal advice.
MONOPOLY® & ©2009 Hasbro, Inc.
Used with permission.
The
Issue
I
n the game of MONOPOLY®, real estate wealth is tempered by
payments for infrastructure—the Electric Company, the Water
Works, four railroads, school taxes, and street repair assessments.
While a lot has changed since the game was created in 1935, those same
facilities continue to be essential to communities throughout the United
States. But, those facilities are only a small portion of the infrastructure
improvements needed.
If the game were created today, and reflected additional facilities from
the broader definition of infrastructure, we might find our token landing
on spaces for International Airports, Interstate Highways, Cargo Ports,
National Parks, Mass Transit, Cable and Digital Television, Hydroelectric
Dams, Toll Bridges, The Information Superhighway, and The National
Power Grid. We may draw a Community Chest card and pay a fee for
Superfund Cleanup, Open Space and Parks, Landscape Maintenance,
Police and Fire Services, Library Taxes, and Solar and Wind Assessments.
And, were we to land on Parking, it would not be free.
The United States has a vast and impressive infrastructure, but it is
aging and, in some cases, outdated. The projected cost of the upkeep and
the upgrade is staggering. How will these costs be financed, by whom,
and in what priority? That is the issue.
Traditional financing methods — taxes, assessments, charges, and fees
imposed by governmental entities or special districts — are not going to
be sufficient. The private sector is going to have to be a player, and it will
have to be creative. It will not be easy.
The four articles in this issue of REsource highlight some of the
c hallenges facing infrastructure finance. The first article discusses the
d ifficulties of financing infrastructure through special districts in the
m idst of the current real estate market upheaval for a new class of
l andowners—lenders, opportunity funds, private equity investors, and
p ensions. Financing solar technology in the green era is the focus
o f our second article. The third article expounds on the benefits
a nd the burdens of classifying infrastructure as real estate from a
t ax perspective. Finally, the limitations on financing infrastructure
i mprovements through privatization are explored in our last article.
E ach article makes clear this fact: notwithstanding the challenges,
i nfrastructure opportunities exist. Whether the United States will over-
c ome these challenges and meet the infrastructure demands…well,
that”s another issue.
— Robert M. Haight, Jr.
Editor-in-Chief
