Recovery from Wildfires Depend on Leveraging Public-Private Partnerships

Case Study #5:

January’s devastating Eaton and Palisades wildfires showed just how quickly even the second-largest city in the country can be overwhelmed by both immediate and long-term recovery needs. 

While immediate needs still are at the forefront of efforts 10 months later, groundwork is being laid for the future. Much like when wildfire allows Sequoia pinecones to open and distribute their seeds onto the newly fertile ground, opportunities for new growth are sprouting. 

Disaster Strikes

In the months since those tragedies (27 people died, more than 16,000 homes lost), cleanup and recovery have relied heavily on public-private partnerships (P3). Private companies mobilized to clear debris, nonprofits geared up to provide immediate relief to victims and governments worked hard to make sure regulatory hurdles were lowered without eliminating future safety. 

Four communities in Los Angeles were particularly hard-hit – Altadena and Pasadena in the Eaton Fire and Pacific Palisades and Malibu in the Palisades Fire. The challenges were great. Public officials turned to the private sector for help. 

The experiences from these communities reveal that P3s function most effectively when they combine clear governance structures, sustained financing, community engagement, and commitment to equity with the private sector’s speed, innovation, and specialized capabilities. The experiences from Altadena and Pacific Palisades demonstrate how well-structured P3s can expedite rebuilding timelines, mobilize diverse resources, and create pathways for communities to recover stronger than before.1 

Immediate Response

As the fires were extinguished in mid-January, literally thousands of displaced people looked for help. While local, county, state and federal governments provided what assistance they could, nonprofits including Red Cross, the Salvation Army and others stepped up with immediate aid. Without the nonprofit P3 partnership, far more human suffering would have resulted. 

For disaster recovery specifically, these partnerships enable rapid mobilization of specialized expertise in logistics, construction management, materials procurement, and workforce deployment that government agencies may lack internally.  

Construction companies mobilized to help remove hazardous debris from the fires in partnership with governments clearing the regulatory way for proper disposal. The governments’ own infrastructure was severely damaged, requiring specialists from the private sector to make a rapid recovery. 

For example, the Los Angeles Department of Water and Power faces overwhelming challenges maintaining 739,000 service connections providing 163 billion gallons annually—infrastructure designed for ordinary operations, not disaster response. P3 arrangements could rapidly restore safe drinking water to affected neighborhoods while incorporating advanced treatment technologies, replacing aging pipes with fire-resistant materials, and implementing smart monitoring systems that detect pressure losses and contamination in real-time. Recovery timelines for water and wastewater P3s typically span 18-36 months from contract award to full operation, dramatically faster than traditional sequential procurement requiring separate design competitions, construction bidding, and operations contracts.2 

Public-private partnerships provide structured frameworks for mobilizing private sector capital, expertise, and efficiency to rebuild essential infrastructure faster and more effectively than traditional government procurement, while ensuring long-term operational performance through integrated design-build-operate-maintain contracts. 

Re-creating Community

In the immediate aftermath of the fires, governments understandably focused on the short-term needs of the residents. To be sure, food and shelter were top of mind for most victims, with how to rebuild their homes close behind. 

But those same residents were determined to maintain their communities, to help each other recover. Once again, the private sector stepped up. Here’s one example. 

Rick Caruso, an LA real estate billionaire, created the nonprofit Steadfast LA to help with recovery efforts. He recruited JJ Redick’s LA Strong Sports group to partner with him to quickly rebuild the Palisades Recreation Center. The partnership is funding the project entirely, eliminating the need for immediate municipal bond issuance or budget appropriations that might have delayed or prevented the project. The city’s financial contribution is limited to expedited permitting and ongoing operational support once the facility opens. 

A new playground is already onsite, and construction is slated to begin in January 2026.3 

Build Back Stronger

While disasters like these wildfires are devastating in the short term, there is an opportunity in the long term – if the necessary resources are available. 

California’s Giant Sequoias offer a great example of this. It takes the high heat of a wildfire to open the Sequoia cones, where seeds can remain dormant for up to 20 years. At the same time, the same wildfire clears the undergrowth, preparing the ground for new seedlings.  

All this while the Sequoias’ thick bark allows the mature trees to survive. The sense of community has survived in our wildfire-impacted towns as well. 

Perhaps the most visible benefit of P3s is their ability to mobilize private capital to supplement constrained public budgets, spreading costs over the asset’s lifetime rather than requiring large upfront government expenditures. This financing mechanism allows communities to undertake essential rebuilding projects even when immediate public funds are limited, with private partners recovering their investments by payments tied to facility performance, user fees, or philanthropic contributions in the case of nonprofit-led P3s.4 

One of the positives of P3 projects is the coordination possible, particularly when the design-build-finance-operate-maintain model is used. Traditional government projects typically separate each phase into different contract and procurement phases – one for design, another for construction, a third for operation and maintenance (unless the government takes that responsibility on). That’s all after a funding source has been found. 

Not only does this sequential approach extend project timelines, sometimes by years, it also can limit coordination when different companies win different contracts. Risk sharing also is limited to the particular phase a company is contracted for, with the government ultimately bearing most of the burden.  

Restoring Economy

In addition to the more than 16,000 homes destroyed, the two wildfires torched more than 12 million square feet of commercial real estate, including 7 million square feet of office space, 4.5 million square feet of retail space, and over 7,000 multifamily units. Economies in the cities directly impacted were gutted. 

Infrastructure restoration creates necessary conditions for economic recovery but insufficient by itself. Businesses must reopen, commercial corridors must regain vitality, workers must find employment, and communities must reestablish their economic identities. P3 frameworks spanning multiple strategies enable coordinated, comprehensive economic revitalization that transforms disaster-damaged areas into thriving commercial districts.5 

Business Improvement Districts (BIDs) are a form of P3 structure – government coordinates services and incentives while the private sector reopens storefronts, upgrade facades and more. Tax Increment Financing (TIF) zones, also known as Opportunity Zones, is another good tool for economic development and recovery. 

When creating a TIF zone, cities designate fire-affected commercial corridors as TIF districts, project future tax revenue based on anticipated property value increases as reconstruction proceeds, and use these projections to secure bonds financing immediate infrastructure improvements – streets, sidewalks, utilities, parking, lighting. Private developers receive certainty infrastructure will exist, enabling them to confidently invest in building reconstruction. As development proceeds and property values rise, tax increment revenues repay the bonds.6 

Next In Malibu

City leaders in Malibu have recognized the heavy losses being felt after the Palisades fire. A city that relies on tourism as a primary source of revenue, Malibu estimates a loss of $3 million to $5 million from Transient Occupancy Tax (TOT, or bed tax) alone. Sales tax revenue is expected to drop by 50% this coming year. 

Sunstone Cities is partnering with Malibu to create a recovery plan – one based on building for the future, not just recovering what was there. While initial needs studies have just begun, it already is clear that P3 strategies will be part of Malibu’s future. 

For example, city leaders have identified support for small businesses and entrepreneurs – public resources helping private stakeholders – as a key goal. There will be opportunities for the public to help develop the plan, as well. 

This planning process should provide a template for other cities recovering from disaster. Partnerships will, as always, be the key to success. 

Footnotes

  1. https://www.federaltimes.com/opinions/2024/06/11/public-private-partnerships-can-revitalize-us-infrastructure/ 
  2. https://www.brookings.edu/articles/the-los-angeles-fires-and-americas-overwhelmed-water-infrastructure/ 
  3. https://www.federaltimes.com/opinions/2024/06/11/public-private-partnerships-can-revitalize-us-infrastructure/ 
  4. Ibid. 
  5. https://catalog.results4america.org/strategies/commercial-corridor-revitalization
  6. https://drexel.edu/nowak-lab/publications/newsletters/2022/regenerating-commercial-corridors-a-proposal-for-states/ 

© 2025 Public-Private Partnerships LLC 

About Public-Private Partnerships LLC: Public Private Partners LLC (“P3 LLC”) was founded on the belief that public-private partnerships are the key to unlocking transformative projects. Government can jumpstart economic development, job creation, and community growth when paired with the innovation and capital of the private sector. Cofounders John Keisler and Jeff Fullerton – who has helped deliver more than $6 billion in successful P3 projects – work directly with economic development firm Sunstone Cities to turn big ideas into reality. https://sunstonecities.us12.list-manage.com/subscribe?u=2fd77d6c079360825b35bcbcd&id=e0227c3f06] | Contact john.keisler@sunstonecities.com. 

News Brief

  • Santa Barbara County (Calif.) is seeking partners to design, build, finance, operate, and maintain a workforce housing development in the county. The development will seek to maximize the number of affordable units that can be delivered at a range of income levels. 
  • Brailsford & Dunlavey (B&D) is partnering with Western Kentucky University and the Student Life Foundation to explore transforming the university’s residence life program through a public-private partnership (P3) model. This collaborative approach will help shape a modern housing landscape that meets student needs and supports WKU’s mission. 
  • The U.S. has launched one of the world’s largest transportation P3 contracts: the $2.3 billion Calcasieu River Bridge replacement (Louisiana). 

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December 5 

P3 Strategy Series 1-2 p.m. Sunstone headquarters, 18881 Von Karman Ave., Suite 500, with Sean Crumby, Interim City Manager, City of Irvine. registration 

December 8-9 

California Housing Conference & Expo, Los Angeles, JW Marriott. registration 

December 10-11 

California Infrastructure Development Conference & Expo, Los Angeles, JW Marriott. registration 

January 22, 2026 

CALED Rural Economic Development Exchange Meeting, Citizen Hotel, Sacramento. information 

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