On October 16th, 2018, Edgemoor-Star America Judicial Partners (ESJP), comprised of Edgemoor Infrastructure & Real Estate and Star America Howard County Courthouse, LLC, an affiliate of Star America Infrastructure Partners, LLC, reached commercial and financial close on the public-private partnership (P3) with Howard County to develop and operate a new circuit courthouse for the County. Since then, the ESJP team has been collaborating with the court users and stakeholders to advance the design, reaching a key milestone in February 2019—completion of the 35% design package.
Clark Construction is serving as the project’s design-builder, HOK as the lead designer, and Johnson Controls as the facility manager during operations.
Construction is slated to begin in June 2019 and the courthouse will be delivered in July 2021.
The project features a 238,000-square-foot LEED Silver circuit courthouse, a 682-space parking garage, and public outdoor space on an 18-acre site. The facility includes space for the State’s Attorney, Sheriff, Bar Association, Maryland Public Defender, Clerk of Courts, as well as office space and courtrooms for six judges, a large and comfortable jury assembly area, a cafeteria, and a fitness center. The building’s design is transitional in nature, embodying elements of both contemporary and traditional architecture, and it is highlighted by a four-story day-lit atrium that will provide clear wayfinding for visitors.
The project has been heralded as the first availability-payment structured municipal P3 to reach financial close in the U.S. outside of California. The 32.5-year P3 contract between ESJP and Howard County covers 32 months of design and construction followed by 30 years of operations.
Howard County Executive Calvin Ball recently noted, “The new Circuit Courthouse is the largest capital project in the history of our County, and with its public-private partnership approach, it is already drawing national attention. Howard County is one of the most innovative and environmentally conscious jurisdictions in this nation, and our new courthouse can be a game changer for Howard County’s justice system and a model for the rest of the country.”
Howard County ran an efficient and thoughtful procurement process that enabled the deal to go from RFP to financial close in 11 months. Brian Dugan, Managing Director at Edgemoor Infrastructure & Real Estate, complimented the process, saying, “Howard County set the benchmark for how a P3 project should be determined and procured. Enabling its compact procurement timeline was the County’s organization prior to issuing the RFQ. A year before the RFQ was issued, the County brought on advisers that helped analyze a variety of project delivery models, before settling on a bit of a hybrid design-build-finance-operate-maintain (DBFOM). It also obtained key preliminary approvals from the County Council pre-RFQ.”
The County chose a hybrid DBFOM model where the private developer finances the entire capital budget, but the County takes out a portion of that private financing at occupancy with a $78 million milestone payment.
Dugan added, “This enabled the County to lower the interest costs for the project while still realizing the long-term risk transfer to the private sector, a key feature that attracted the County to the performance-based availability payment DBFOM structure. Additionally, the County set an affordability limit which helped direct the shortlisted teams and assured a cost-effective financing structure.”
ESJP efficiently financed the project through a combination of short-term construction bank loans, long-term private placement debt, and equity.
Brian Dugan, Managing Director
Edgemoor Infrastructure & Real Estate
7500 Old Georgetown Road, Suite 620
Bethesda, MD 20814
Edgemoor is a leading vertically-integrated developer and asset manager of buildings and infrastructure and offers tailored comprehensive development solutions to a broad range of clients.