Lessons for Private Development of Public Land

Private development of public land often fails because the government agency owner and the private developer have different objectives, operate in different ways and often don’t even recognize it.  We’ve seen a few instances of public property struggling to be redeveloped around southeastern Connecticut:  State Pier and Seaside, for example.  Mystic Oral School looks headed for an equally hard slog.  What are the factors that lead to a successful project actually getting built on public land?

First, the developer needs to understand that the deal is not like the ones it does with private landowners.  Land development, other than building public works like schools and bridges, is not a core mission for government; there are laws that restrict government agencies that don’t apply to private developers; and they are at the whim of political forces.

Second, the developer needs to accept that the deal needs to be comprehensible to the public, and the press.  The government agency can’t let it seem — or let it be — that the taxpayers are being taken advantage of.  The practical import of this is that the deal can’t be overly complicated, and that the agency may sometimes have to say “No” to a negotiation point — not for a business reason, but for a public relations one.  Further, the agency will be under pressure to be transparent with the public and the press about the transaction, something developers are often unfamiliar with and in my experience terrified by.  I’ve never seen a deal tank because too much information was disclosed, but I’ve seen a bumpy deal get bumpier because an agency tried to play “secret squirrel” with the details.

The government agency for its part, needs to recognize that the developer is a business that’s in the deal to make money.  Delays, shifting objectives, and political fights may be standard operating procedure in the public sector, but these are things a developer will not respond to well.

Second, the agency needs to employ the resources necessary to keep things moving.  Too often a government agency doesn’t have the expertise on staff who can close a development deal, or hasn’t empowered its staff or representatives to make decisions the developer can rely on, and time is wasted while staff checks back with higher-up’s for decisions.  And often it fails to do the up front planning work, leaving too many unanswered questions.  A traffic study that should already be complete is ordered only after the public raises questions.   Investors lose patience, the public loses confidence, and things fall apart.

Third, the agency needs to explain what policy objectives it has for the property at the outset.  And whether those are affordable housing, transit oriented development, revitalizing a blighted neighborhood, or something else, the agency must be consistent about them.  Capital abhors instability, and if a project is going to attract the necessary private capital, the agency can’t keep moving the goalposts. 

This means that, fourth, the agency needs to get a sense of where the public is, before they designate a developer. As was all too evident with the failed Mystic Marina development proposal in downtown Mystic, springing a development proposal on an unsuspecting public is a hit or miss endeavor, and either way creates unnecessary conflict and lasting damage in the community.  Do the planning first (including community engagement) and build later. That way, everyone can avoid discovering, halfway through the process, that the public wants something completely different than whatever was being negotiated.  When this happens, it scares away developers, squanders the public’s trust and, in the worst case, necessitates starting the whole process again.

In 2009, I took over as the lead negotiator at the Massachusetts DOT for state land opened up for development by the “Big Dig” highway removal project. One of these was “Parcel 9”, partly occupied by Haymarket, the open air food market which has operated in downtown Boston for well over a century. The politically powerful market vendors opposed the proposals under consideration by DOT and I thought it was foolish, knowing that, to proceed.

So we started again, basically following the roadmap I’ve described, and, as you read this, the project is under construction.


Peter O’Connor has held positions as a lawyer and public official in state and local government in Connecticut and Massachusetts, and now lives in Mystic.

He can be reached at PeterOConnorCT@gmail.com.