What is a buy-build-operate (BBO) transaction?
A BBO transaction is a form of asset sale which includes a rehabilitation or expansion of an existing facility. The state sells the asset to a private sector entity which accomplishes the improvements that are necessary to operate the facility in a profitable manner. Example: The state sells an office building to a private developer who rehabilitates the facility and leases it back to the state. The developer accrues whatever tax benefits accompany ownership of the property, the state has a new source of tax revenue, and the state avoids the costs and procedures associated with financing a new office building project.
