Recovery from Wildfires Depends 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 newly fertile ground, opportunities for new growth are sprouting.

Disaster Strikes

In the months since those tragedies, where 27 people died and more than 16,000 homes were lost, cleanup and recovery have relied heavily on public-private partnerships. 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.

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. P3 arrangements could rapidly restore safe drinking water while incorporating advanced treatment technologies, replacing aging pipes with fire-resistant materials and implementing smart monitoring systems.

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 short-term needs: food, shelter and how residents could rebuild their homes.

But residents were also determined to maintain their communities and help each other recover. Once again, the private sector stepped up.

Rick Caruso 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.

A new playground is already onsite, and construction is slated to begin in January 2026.

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 useful example. It takes the high heat of a wildfire to open the Sequoia cones, where seeds can remain dormant for up to 20 years. The same wildfire clears undergrowth, preparing the ground for new seedlings. The sense of community has survived in 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.

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, extending timelines and limiting coordination.

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 is insufficient by itself. Businesses must reopen, commercial corridors must regain vitality, workers must find employment and communities must reestablish their economic identities.

Business Improvement Districts are one form of P3 structure. Tax Increment Financing zones, also known as Opportunity Zones, are another 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 those projections to secure bonds financing immediate infrastructure improvements.

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 alone. Sales tax revenue is expected to drop by 50% this coming year.

Sunstone Cities is partnering with Malibu to create a recovery plan 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.

City leaders have identified support for small businesses and entrepreneurs 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.