$300 Million PPP Courthouse

LONG BEACH, Calif. — California is set to become the testing ground for the delivery of major high-threat public buildings through public-private partnerships as state judicial authorities move into the final selection phase for the proposed $300 million U.S. courthouse here.
The state’s Administrative Office of the Courts is evaluating bid proposals from three interdisciplinary consortia selected as finalists in the public-private partnership contract competition to design, build, operate, maintain and finance the new Superior Court for Los Angeles County.
The performance-based infrastructure arrangement attempts to leverage the private sector’s entrepreneurial orientation and access to finance capital and its technological, management and development expertise and process efficiencies to deliver the facility in the most cost- and time-effective manner possible.
The innovative strategy used on the Long Beach project is a first for the Judicial Council of California — the policymaking body for the court system — and was prompted by the state’s budget problems, officials say.
“The private-public partnership being used to finance this courthouse is a great example of how to pursue infrastructure improvements in recessionary times,” says Superior Court Presiding Judge Charles W. McCoy Jr.
If successful, the AOC will likely adopt the strategy to deliver other planned courthouse projects in California. Other financially struggling state and local governments throughout the United States are paying close attention to the project, which could serve as model for high-cost, high-risk or sensitive public buildings, experts say.
Balfour Beatty, Meridiam Infrastructure and the joint venture of Phelps Development and Lankford & Associates lead the three consortia vying to deliver the project, with the AOC scheduled to announce the winning bidder in March.
Construction, which could begin by the fall, will take an estimated two years to complete, officials say.
During the design and construction phase of the proposal process at the end of 2009, officials from the AOC, Los Angeles County Superior Court and the Long Beach Redevelopment Agency worked closely with each team in a fast-track design environment to ensure that submissions satisfied the Judicial Council’s project requirements for design quality, flexibility, functionality and operational efficiency.
The competing designs propose courthouses of approximately 525,000 to 545,000 square feet — a range that would more than double the square footage of the existing courthouse, which was built in 1959.
The three consortia offer competing visions of courtroom design, operational space, public areas and landscaping for the six-acre site and propose courthouses that all provide the specified 31 courtrooms but differ in building height, from five to seven stories. 
Court operations will occupy approximately 75 percent of the building’s total square footage. Several Los Angeles County justice agencies will occupy a portion of the remaining space.
Developers will likely augment the courthouse component of the development with additional commercial office space and retail operations, officials say.
Under the plan, the AOC will enter into a service contract with the winning consortium for a 35-year period. Service agreement payments are contingent upon the successful operation and maintenance of the building, and the state will maintain ownership of the building and land throughout the term of the PBI agreement.

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