Beyond Risk: Motivators for Turnkey Delivery - Financing
South County Secondary School
South County Secondary School, a $64 million turnkey-design-build-finance project, was delivered through an innovative financial and development structure developed by principals of Edgemoor. Edgemoor’s plan called for the monetization of unused Fairfax County land assets, thereby lowering the overall net cost of the project to the County. This accelerated the delivery of the school without taking any funds out of the school system’s capital improvement plan until they were originally programmed. In addition, through the land sale, value engineering, and other creative tools, the County was able to save over $25 million against the project budget. This created enough funds to accelerate the renovation of 11 other school facilities in Fairfax County. Edgemoor provided day-to-day management and a single point of responsibility from the private sector for the entire development process, including financing, which reduced the burden on Fairfax County Public Schools staff. The school opened three years ahead of the County’s original schedule.
The South County Secondary School project was awarded the National Council for Public-Private Partnerships 2006 Innovation Award.
Capital constraints require new project finance strategies, including off balance sheet or 3rd-party financing sources needed, lease/leaseback project financing, use of availability payments and service agreements to underwrite project financing, and no upfront or progress payments; payments begin with occupancy.