Bringing Retail and Residential Space to Court

The curving edifice in front of the court incorporates retail space, giving the private sector a reason to back the project at their risk.

A new 360,000-square-foot courthouse in Boise, Idaho, anchors not only a county justice system, but also is the first part of a 16-acre master plan that includes retail and office space. The $45 million Ada County Courthouse was constructed in partnership with a private real estate developer and is expected to reinvigorate the edge of downtown Boise.

A number of mid-rise buildings already have sprung up around the court since it was occupied in January. Planners currently are getting ready to build the first housing components, to be constructed atop newly-completed parking garages. It is hoped the housing will draw professionals who want to live closer to the city.
Part of a unified master plan, a promenade provides a consistent feeling in a pleasant walking environment, incorporating extensive landscaping and signage tailored to the mixed-use development. Further underscoring the private thrust of the project is the fact that local officials did not have to raise taxes to pay for the project.

The master plan and conceptual designs were provided by Civic Partners, a California-based real estate company that specializes in private/public partnerships. The company was sought out by the Capital City Development Corporation (CCDC), a non-profit, quasi-public entity that offers tax-exempt status to the court project, representing both Ada County and the City of Boise.

“The private developer contributes money to build the courthouse, but they get the income from the lease space. Everything else on the site will have a retail component, and that gives them an incentive to be involved,” explains Steven Simmons, president of Lombard-Conrad Architects, the architect on the court’s design/build team.

“The beauty of all this is that now the county is able to lease this facility and pay it off without having to come up with $45 million for a new courthouse,” says Simmons. “Technically, the CCDC is the owner and landlord. The private partners are in charge of the development, and the county sits back and pays the rent. But the county also has first-right-of-refusal to take over part of two adjacent office towers if it wants-if they outgrow the courthouse, for instance.”

The retail spaces at the front of the courthouse do nothing to diminish the building’s function as a justice facility. To design the court, Lombard-Conrad consulted HDR Architects of Dallas for expertise in justice architecture. With 28 courtrooms, the facility has everything one expects in a contemporary courthouse, including duress alarms, security cameras, advanced detection equipment, and a basement holding area with a sallyport and secure elevators.

The facility’s retail components-be they cafes or photocopy outlets-are separated from the court internally by security walls. Just outside the court, a large, curving edifice with brick openings is for storefront and window displays. Also planned is a University of Idaho satellite campus with a branch law school.

The new courthouse is the first piece of a 16-acre master plan intended to reinvigorate the edge of downtown Boise. Residential, retail, and private office space are incorporated throughout the plan.

Located near a new major traffic artery, the courthouse consolidates all the county’s employees in one administrative center to inspire a new urban hub. Civic Partners’ master plan calls for a pedestrian promenade running down the spine of the four-block development. “As that spine gets to the courthouse, rather than go through the building as it does the others, the promenade goes around the courthouse because of security issues,” says Jeff Pomeroy, vice president of production at Civic Partners, founded in 1991.

The economic downturn has made renters slightly more reluctant to seek leases in the complex. The courthouse was nearing completion on September 11, but while development has been slower than expected, city officials remain encouraged. In any case, the county’s risk is limited, planners say. “Ada County could legally move out in a year if they wanted to, but I think it’s pretty safe to assume they’re not going to do that,” Simmons says of the county’s one-year renewable lease.

But taking this new approach did have a cost. Many citizens and officials still have questions about the role of a private company in a public project. A lawsuit brought against the county by a citizens’ group challenged the phrasing of the ballot measure that spawned the project, and although the suit was unsuccessful, litigation set the design process back by at least one year. Officials estimate the lawsuit also raised costs by $7.5 million in additional interest.

But there was no cost to taxpayers as a result of the way the deal was structured financially. The property was an old rail stop that was producing no tax revenues. Now, the newly-created tax revenue flows to the CCDC and is used to finance the court along with the expected ground-lease payments, which underwrote an estimated $18 million to $25 million of the court’s total project cost.

Other counties have used similar financing methods to create public buildings, but this is the first courthouse to play a central role in a redevelopment of this size using ground-lease payments, according to Steve Semingson, president of Civic Partners. Another unique twist is that the company is acting as an at-risk developer and so must make the payments, even if they are unable to develop the property and take in rents.

“There are other private companies that develop courthouses, but usually they are very strongly affiliated with the larger construction/engineering firms as an extension of design/build services. But as a real estate developer, we look at a variety of methods to cover some of these costs,” says Semingson. “We’re going to see more of this because financing techniques are becoming more sophisticated and there are other companies joining our niche.”