What It Takes to Structure a Master Development Agreement for a City (And Why Cities Are Starting to Think Like Startups)
Large-scale development projects don’t move forward on vision alone, they are built on legal frameworks that align public priorities with private capital.
At the center of these projects is the Master Development Agreement (MDA): a highly structured contract that governs how a project is financed, developed, operated, and sustained over time.
But there’s a broader shift happening.
Cities are no longer just regulators or landowners. Increasingly, they are acting like strategic operators—more akin to startups—leveraging legal and financial tools to attract capital, accelerate development, and compete for long-term economic relevance.
One of the most powerful—and often underutilized—tools enabling this shift is the Public-Private Partnership (PPP) statutory framework.
Cities as Startups: Leveraging Legal Infrastructure for Growth
Startups scale by using available frameworks—venture financing structures, equity incentives, and regulatory pathways—to attract capital and align stakeholders.
Cities are beginning to do the same.
Through PPP statutes, municipalities can:
Enter into long-term development agreements with private entities
Allocate risk and responsibility contractually
Incentivize private investment without over-leveraging public balance sheets
Structure deals that generate recurring revenue and long-term upside
In this sense, PPP laws function as a city’s equivalent of a startup’s fundraising and governance framework.
They are not just compliance requirements, they are strategic enablers of innovation and growth.
A Real-World Example of PPP in Action
In a recent engagement, our firm served as legal counsel in negotiating and drafting a Master Development Agreement for a $180M+ hotel and convention center redevelopment project in Downtown Kissimmee, approved unanimously by the City Commission.
This transaction was structured within the applicable PPP statutory framework, which allowed the City to move beyond traditional procurement limitations and engage a private developer in a more flexible, performance-driven structure.
The agreement was designed to:
Deliver a 45,000-square-foot convention center with no public debt exposure
Guarantee $2.5M+ in annual lease payments with escalators, creating predictable municipal revenue
Provide a 5% share in net operating income, aligning the City with long-term project success
Include robust performance and completion security, protecting taxpayer interests
The result is not just a development—it is a legally engineered economic platform, enabled by PPP authority and executed through a carefully structured MDA.
PPP Statutes: More Than a Legal Requirement
Too often, PPP frameworks are viewed narrowly as:
Procurement alternatives
Compliance checklists
Administrative processes
In reality, they are far more powerful.
When used strategically, PPP statutes allow cities to:
Bypass rigid procurement models that can slow innovation
Evaluate unsolicited proposals from private developers
Negotiate directly on complex deal terms, including revenue sharing and operational control
Structure long-term partnerships rather than one-off transactions
In other words, PPP laws give municipalities the flexibility to operate like market participants—not just regulators.
1. Aligning Incentives Like Equity Stakeholders
PPP-enabled MDAs allow cities to move beyond fixed payments and into shared economic participation.
Instead of simply leasing land or approving construction, municipalities can:
Participate in project revenue
Structure escalating payments
Tie incentives to performance benchmarks
This mirrors how startups align founders, investors, and operators—through shared upside.
2. Treating Public Assets as Strategic Capital
Under PPP frameworks, cities can leverage:
Public land
Infrastructure access
Zoning authority
Market positioning
These assets become negotiable capital inputs, used to attract private investment and shape deal economics.
This is a fundamental shift from passive ownership to active capital deployment.
3. Designing for Recurring Revenue and Long-Term Value
Traditional municipal models often rely on:
One-time transactions
Fixed payments
Limited participation in upside
PPP-enabled structures allow for:
Long-term lease revenue
Profit-sharing arrangements
Increased tax base through sustained development
This transforms cities into long-term economic stakeholders, not just facilitators.
4. Engineering Risk Through Contractual Design
PPP statutes provide the flexibility to contractually allocate risk with precision.
In practice, this includes:
Performance guarantees
Completion security
Milestone-based obligations
Remedies tied to non-performance
Rather than absorbing risk, municipalities can transfer and manage it strategically.
5. Enabling Innovation Through Flexibility
One of the most overlooked benefits of PPP frameworks is flexibility.
They allow municipalities to:
Enter into non-traditional deal structures
Partner with specialized developers and operators
Adapt agreements to project-specific needs
This is critical for projects like:
Convention centers
Hospitality developments
Mixed-use innovation districts
Where rigid procurement models often fall short.
6. Balancing Speed, Accountability, and Public Trust
While PPP frameworks enable flexibility, they also require:
Transparency
Competitive safeguards
Public oversight
The challenge—and opportunity—is balancing:
Speed of execution
Legal compliance
Community accountability
A well-structured MDA, grounded in PPP authority, achieves all three.
The Role of Legal Counsel: Translating Authority into Strategy
PPP statutes don’t structure deals—people do.
Legal counsel plays a critical role in:
Interpreting statutory authority
Designing transaction structures within that framework
Aligning stakeholder incentives
Ensuring enforceability and long-term viability
In this context, lawyers are not just drafting agreements, they are architecting how cities deploy capital, manage risk, and drive growth.
The Bottom Line
Master Development Agreements are evolving because cities are evolving.
With the support of PPP statutory frameworks, municipalities can:
Compete for capital
Structure sophisticated partnerships
Generate long-term economic value
Deliver transformative projects without overextending public resources
And as the Downtown Kissimmee redevelopment demonstrates, the difference between a static project and a catalytic one often comes down to this:
Whether the city used its legal tools passively, or strategically.
At StartSmart Counsel, this is the lens we bring to development work, leveraging PPP frameworks and sophisticated deal structuring to help municipalities, developers, and investors execute projects that don’t just get approved, but are built to perform.
