Free Enterprise vs. Economic Incentives: The Evolution of the “Public Purpose” Fulcrum

This Article explores the evolution of Florida law regarding public-private partnerships (“P3s”) and provides practical tips for local government practitioners to best position themselves and the governments they represent for success in partnering with private entities. Local governments and the private sector may collaborate on projects involving economic development, blight elimination or redevelopment, and acquisition of a needed asset or service. However, to avoid running afoul of the Florida Constitution, the government actor must be careful to ensure that the public benefit is sufficiently served and that the project does not disproportionately benefit the private partner. The standard—although not always consistently applied by the Florida Supreme Court—varies depending on the type of financing employed by the government, specifically on whether the governmental assets to be used are in hand at the time of the project’s inception, and if not, how they will be obtained (taxation versus enterprise net revenues). In any case, the constitutionality of a given project will hinge on whether it demonstrates a sufficient public purpose to be served.

In addition to describing strategies that local government attorneys can employ to best position their projects to meet the required standards, this Article also discusses the variety of mechanisms that a local government can use to implement such projects, including a city’s homerule power; the 2013 Florida P3 statute; a specific grant of community redevelopment power; and other economic incentive programs included in various statutes and regulations. The Author is the former City Attorney for the City of Panama City Beach and a past President of the Florida Municipal Attorneys Association.