The University of Kansas (KU) wanted to avoid long-term deferred maintenance obligations for the new facilities built in the Central District. Further, KU was looking for operating cost certainty as well as metrics to measure performance.
Edgemoor proposed and implemented an operations/maintenance and lifecycle (capital replacement) solution that addressed all of KU’s concerns. The payments for operations are fixed for the term, the contract includes a handback provision that requires the building’s systems and finishes meet a pre-determined Facility Condition Index, and our performance is measured against a set of Key Performance Indicators, with penalties for service levels below agreed upon thresholds.
The KU Central District Development Project includes the development of more than 900,000 SF of facilities across approximately 55 acres of land, including eight different buildings and two design-build contractors.
Edgemoor implemented a development management solution and schedule that included weekly coordination meetings, internet based collaboration, third party testing, inspections, and commissioning to ensure that all the project elements were built per the quality expectations, plans, and specifications of Edgemoor and KU.
As part of the project requirements, Edgemoor was responsible for arranging and implementing the project financing consistent with KU’s goals for risk transfer of buildings delivery, long-term operations and lifecycle costing, and the lowest possible cost of capital.
As part of Edgemoor’s due diligence, we identified that Kansas state laws would not allow for a traditional lease-lease structure with the private sector. To address this regulation, Edgemoor developed a creative alternative solution, vetted the approach with attorneys to ensure compliance with state laws, and then implemented this financial structure that met KU’s financial and transaction structure goals. The approach was further vetted by the Rating Agencies and the project financing received the same credit rating as KU’s existing debt.
They have followed through on their promises, they’ve delivered on their scope, and throughout the entire process we found them easy to work with, extremely knowledgeable, and it would be my pleasure to recommend the partnership we’ve had with Edgemoor."
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.