Retail Traffic: What opportunities do economic development officials see in partnering with the private sector?

Hudnut: They are usually hoping to achieve an increase in their revenue base, either through sales or income taxes, an increase in the employment base and an increase in the economic vitality of the city. I think that if you look at urban neighborhoods and first-tier suburbs, there is a great opportunity there for the public and private sectors to work together.

RT: Does it make a difference whether the project is a mall, a strip center, a lifestyle center or a mixed-use development?

Hudnut: What project [to build] should be determined on a case-by-case basis. You have to gear your retail to the market, there is no point in bringing in a Tiffany's if people can't afford to shop there. Lifestyle centers, for example, appeal to high-income people who have money to spend, but they don't appeal that much to inner-city dwellers.

RT: What issues tend to arise most often with public/private partnerships?

Hudnut: The most common, I think, is whether the city can find willing sellers for the property. Sometimes the local property owners will take the city to court and that's very, very contentious. Another basis of disagreement is how the project is going to be financed and who's going to get what share. You have to take a lot of time to negotiate a fair deal structure, to satisfy all the partners.

RT: How much time should people expect to spend working on a public/private project?

Hudnut: It's certainly not done overnight. The Circle Centre project I did in Indianapolis took 17 years from start to finish and it took a lot of effort to negotiate all the deals. Some companies said they'd come and they didn't, then the developer couldn't get financing…. The important thing is to have trust on both sides of the table and trust can only be earned through hard work, honesty and perseverance in seeing the project through.

RT: Which public/private developments do you find the most successful?

Hudnut: I would start with the Circle Centre, but I am prejudiced, of course. The reuse of the old post office in St. Louis, Mo. [is another]. They rehabbed a 125-year-old building in the downtown area and now the project generates traffic; it brought in jobs and raised the revenue base for the city. Another excellent example is the development in downtown Silver Spring, Md. The Peterson Cos. did that revitalization project — it's a mix of office, retail, housing and civic uses.

RT: Some people make the argument that public private partnerships are a free ride for the developers. What do you think?

Hudnut: I think that's an easy charge to make, but if the public sector involvement is needed, the public sector should be engaged. And people will go on about how it's not fair and it's a boondoggle…but if at the end you are left with an empty piece of ground instead of a nice retail development, you are foolish to let that argument carry the day.

RT: What advice would you give those who are working on economic development projects today?

Hudnut: Rebuilding neighborhoods is a difficult and complicated process, as you can see with New Orleans. You are not necessarily going to succeed if you try to re-create past glories because urban neighborhoods have changed a lot in the past few decades.

WILLIAM H. HUDNUT III Chair of public policy, Urban Land Institute; Mayor of Indianapolis, 1976 to 1992