The Regents of the University of California Reaches Commercial and Financial Close on UC Merced 2020 Project

UC Merced 2020 Project

Photo: UC Merced

The Regents of the University of California reached financial close on the UC Merced 2020 Project on August 16, 2016.  The project is the first higher education availability payment P3 project to be awarded in the United States, and may well serve as a template for future higher education capital projects, both within the UC system and nationally.

The Regents entered into the Project Agreement with Plenary Properties Merced LLC (PPM) for a 39-year contract term.  The PPM team includes Plenary Group, as sole equity member of PPM, Webcor Builders, as lead contractor, Skidmore, Owings & Merrill Inc., as lead campus planner, and Johnson Controls, Inc., as lead operations and maintenance firm.

The project involves the design, construction, financing, operation and maintenance of a broad mix of academic, residential, student life, and recreational facilities at the University of California’s youngest campus.  790,000 assigned square feet of critically needed facilities will be delivered in phases by 2020, nearly doubling the physical capacity of the campus to support projected enrollment growth from 6,700 current students to 10,000 students within five to seven years.

The Board of Regents granted final approval for the project at its July 21, 2016 meeting, voting unanimously to approve the amended project scope, budget and commercial terms, the proposed external financing, and PPM’s proposed design of the project.  The initial Board of Regents’ approval for the project was granted in November 2015.

“This project represents a major step forward for a trailblazing campus that will build on its early record of excellence to lead the way for universities across the nation as we all strive to teach, conduct research and serve the public in the most dynamic, efficient manner possible,” stated UC President Janet Napolitano.

The $1.3 billion project will be financed by the University’s external financing and campus funds, together with Plenary’s equity investment and private placement of long-term, senior notes.  Up to $585 million of monthly progress payments will be paid by the University during the construction period, which will be financed from the University’s commercial paper program (and may later be refinanced into long-term General Revenue Bonds or Limited Project Revenue Bonds).  Partial availability payments will commence upon delivery of the first set of facilities scheduled for fall 2018, with full availability payments to commence upon delivery of the full project scheduled for summer 2020.

LAX Receives Significant Interest for Automated People Mover Project

Los Angeles World Airports (LAWA) reached a milestone in its estimated $5 billion Landside Access Modernization Program (LAMP) this week when it received statements of qualifications to design, build, finance, operate and maintain an automated people mover, in response to a request for qualifications issued by LAWA on June 9, 2016.  The five statements of qualification submitted on August 11, 2016 show significant interest by the industry in this program.  LAWA’s official press release has a complete list of the five teams.

The automated people mover, which will be approximately 2.25 miles long and has an estimated cost of $2.2 billion, features an elevated dual lane guideway, six passenger stations and an off-line maintenance and storage facility.  Three stations will be located within the central terminal area at LAX and the off-airport stations will be located adjacent to a new west and east intermodal transportation facility and a new consolidated rental car center (CONRAC).  In addition to CONRAC passengers, the automated people mover will transport passengers going to/from LAX via other modes of transportation.  LAWA anticipates procuring the contract for the estimated $1.1 billion CONRAC and other elements of LAMP separately.

Public-Private Partnerships: They’re Not Just About the Money, But the Performance

The need to spend significant dollars on the repair and expansion of the nation’s public infrastructure is a major concern expressed by many.  Even the two presidential candidates for the major political parties, who don’t seem to agree on anything else, agree that a commitment to repair and rebuild the nation’s infrastructure is critical to economic productivity and opportunity for its citizens.

In a recent paper published by the Center for American Progress, a public policy and research organization, entitled “Assessing Claims About Public-Private Partnerships,” the author concludes that public-private partnerships (“P3s”) are an alternate approach to infrastructure procurement that has as a key benefit: “the ability to transfer risk…”  This is achieved by transferring “some or all of the project development, design, construction, operational and revenue risk to a private entity.”  This is particularly the case for large complex projects (though the author doesn’t specify a dollar amount or discuss what he means by complex).

I am generally in agreement with the conclusion of the paper; however, most of the article is spent taking issue with “public-private partnership supporters” who are promoting P3s not as a delivery method that appropriately allocates project risks, incentivizes high quality operation and maintenance, provides budget certainty and encourages innovation, but as a financing scheme.  Specifically, the author accuses “Wall Street” of peddling high cost equity capital as the reason to do a P3.  The author also spends a fair amount of time critical of the assertion that these so-called “P3 supporters” make about the role of public pension investors in P3 transactions.

I recognize the role of private finance in these transactions, as well as the recent involvement of public pension funds as investors in P3 transactions, but to be clear: P3 is not all about the money—it’s about the performance and the value provided to the public sector and taxpayers of the transfer of design, construction and maintenance risk to the private sector.  I would like to have seen the author spend more time writing about what he concludes are the benefits of a P3 – that it is first and foremost a delivery method.  The private financing aspect of these transactions is not a magic source of liquidity for public infrastructure but can be an important driver of the overall value to be derived from a P3 approach.

Cyber Risk and Reality – Procuring Transportation in the 21st Century

With the rapid pace of innovation and deployment of intelligent transportation systems (ITS) to enhance existing transportation infrastructure, transportation officials frequently procure and manage sophisticated systems that collect, use and maintain vast amounts of data.  Today’s transportation officials must possess considerable technological proficiency in addition to their traditional expertise in civil engineering and construction.

Highway communication system vector infographics. Road communication, highway system communication illustration

Identifying technology to optimize infrastructure, and crafting complex technical specifications to procure the same, is only half the challenge. The use of ITS systems and management of the data they require is fraught with network security and privacy risks that must be identified, understood and managed. Risks ranging from service interruption, lost revenues, loss of data, reputational damage, introduction of malicious computer code, theft of valuable electronic business assets, disclosure of sensitive information and legal liability for security and privacy breaches, to cyber terrorism and cyber extortion, require thorough risk assessment, robust security policies, and diligent management.  According to a report by the Identity Theft Resource Center, 781 data breaches in the U.S. were tracked in the year 2015, and the number and severity of breaches is ever increasing.  The question isn’t whether a transportation agency’s systems will be hacked, but rather, how will the transportation agency minimize the threat, prepare to respond to and manage incidents, and mitigate losses?

While current events highlight the risk of data breaches from network hackers, data breaches and damage to IT networks can also come from employee negligence and theft, lost or stolen laptops, mobile devices and portable discs and drives, malware, and consultant and vendor negligence or malfeasance, among other sources.  Transportation agencies need to identify vulnerabilities and assess the risks associated with the systems they procure and operate, continuously monitor their systems for suspicious activity, implement robust training and security programs, and have a plan in place to respond to breaches.  Risk assessment should begin at the procurement stage. Carefully drafted technical specifications should assign responsibility for undertaking necessary precautions, and contracts should allocate the risk of losses from data breaches to appropriate parties.

Typically transportation agencies have standard clauses requiring commercial insurance that they use as a starting point for their procurement documents.  However, most standard commercial insurance policies do not cover many cyber risks.  Fortunately, as data breaches have increased in frequency, and as awareness of the risks has grown among professionals charged with procuring and managing systems and data, growing demand for cyber liability insurance products has prompted the insurance industry to respond by offering new and expanded cyber liability products.

Transportation officials may find it appropriate to require contractors to provide network security/privacy coverage, including some or all of (a) coverage for hostile actions with the intent to affect, alter, copy, corrupt, destroy, disrupt, damage or provide unauthorized access to or use of a computer system, including exposing confidential electronic data or causing electronic data to be inaccessible, (b) computer viruses, (c) dishonest or criminal use of a computer system to affect or destroy a computer system or steal or take electronic data, (d) loss of service by the contractor resulting in inability to access a computer system and conduct normal Internet or network activities, (e) denial of service for which the contractor is responsible resulting in degradation of or loss of access to normal use of a computer system, (f) access to a computer system or resources by an unauthorized person, and (g) loss or disclosure of personally identifiable information.

Also appropriate is media liability coverage, including (a) copyright and trademark infringement, (b) plagiarism, (c) public disclosure or loss of misappropriated trade secrets or unauthorized use of material, (d) libel,  slander, disparagement or other forms of defamation, (e) unauthorized disclosure of data resulting in invasion of privacy, (f) unfair competition or violation of Section 43(a) of the Lanham Act or similar statutes, (g) breaches of contract from alleged misuse of data, and (h) errors and omissions and negligence in the production or publication of content.

The cyber insurance coverages described above may be included in a comprehensive technology errors and omissions policy covering (a) software design, (b) systems programming, (c) data processing, (d) systems integration, (e) outsourcing, (f) systems design, consulting development and modification, (g) training services related to computer software or hardware, (h) management repair and maintenance of computer products, networks, and systems, (i) servicing, distributing, installing, and maintaining computer hardware or software, and (j) data entry, modification, verification, maintenance, storage, retrieval or preparation of data output.

With these coverages, the transportation agency may recover a variety of expenses associated with the identified cyber and technology risks, including the cost of notifying persons whose information is disclosed, the cost of providing credit monitoring services, the cost of defending claims by state regulators, fines and penalties, losses resulting from identity theft, property exposure from business interruption, costs associated with data loss and destruction, fraud, funds transfer losses, and the cost of defending lawsuits alleging trademark or copyright infringement.

In addition to new insurance products, increased awareness of cyber risks is prompting expansion of resources to aid in understanding and managing the risks. As noted by Traffic Technology Today.com, “[c]ybersecurity and insurance are definitely on the A-list of discussions across almost every industry.”  A recently published comprehensive report of the National Cooperative Highway Research Program, Liability of Transportation Entity for the Unintentional Release of Secure Data or the Intentional Release of Monitoring Data on Movements or Activities of the Public, is an excellent resource for  any transportation official involved in procuring systems and handling data, or advising those who do. (Thomas, Larry W., July 2016, Transportation Research Record: Journal of the Transportation Research Board Online)  The report throws into stark relief the enormous challenge of using ITS technologies to optimize transportation resources while navigating the complex legal environment.  Transportation officials also may wish to attend the 2016 Cybersecurity Symposium “Cybersecurity, Data Breach, and Privacy:  Examining Your Risks and Legal Issues From the Inside Out” to be presented by the University of California Irvine School of Law and Nossaman LLP on October 19, 2016, at the City Club of Los Angeles.

Assessment of cyber risks should be near the top of the list in planning for transportation projects in the 21st century.  While cyber liability may not be within the traditional lexicon of transportation officials, it is the new, inescapable reality.  By recognizing the issues, transportation agencies may take steps to manage cyber risks through a combination of contract risk allocation and insurance requirements, in addition to training and consistent vigilance.

U.S. DOT Unveils Build America Bureau

U.S. Transportation Secretary Anthony Foxx, senior Department staff, and even an official from the White House gathered at U.S. Department of Transportation headquarters on July 20th to celebrate the grand opening of the Build America Bureau. After sharing a cake emblazoned with its logo, the dignitaries led a tour through the Bureau’s new office space in what used to be the library, replete with glass offices, motorized desks, and curved computer monitors. Compared to the cubical-farm offices of the modal administrations, the Bureau is clearly something different and new, and that theme made its way into many of the speeches preceding the tour.

Section 9001 of the Fixing America’s Surface Transportation (FAST) Act (P.L. 114-94) created the Build America Bureau to provide a one-stop-shop for project sponsors wishing to navigate the Department’s credit programs and environmental permitting requirements. The Bureau is located within the Office of the Secretary and serves three primary functions:

  1. Administer the application processes for the Department’s credit programs—TIFIA, RRIF, and amount allocation for PABs—and the FASTLANE grant program.
  2. Work with the Department’s modal administrations and outside stakeholders to develop and promote best practices relating to innovative financing and procurement.
  3. Accelerate environmental permitting for complex projects.

Even though the Bureau is open for business and the expectations of Administration officials are high, key issues remain unresolved.

First, how will U.S. DOT staff the Bureau? Many leadership positions in the Bureau are filled, but there is still a question as to who will take the laboring oar for the Bureau’s core functions. The FAST Act gave the Bureau authority to move relevant offices (i.e., FTEs and corresponding budgetary authority) from the modal administrations, but how much and to what extent that actually happens remains to be seen. If the modal administrators push back on an outright re-organization of the Department with the TIFIA and RRIF offices moving up to the Bureau in their entirety, that could hamper the efficacy of the Bureau, which leads to the next issue.

Second, congressional authorizers provided explicit authority for the Bureau to administer the application processes for TIFIA, RRIF, PAB allocations, and FASTLANE grants, but what will the Bureau do when it comes to overseeing and managing the portfolios of these programs? The FAST Act is specific in what authority the Bureau has on paper, but whether Secretary Foxx chooses to move the ongoing work of these credit programs to the Bureau is another issue entirely.

Third, many industry professionals are wondering how much of a difference the Bureau will actually make. The Bureau is a great concept, but could it result in an even murkier, more bureaucratic process for project sponsors to navigate? With the right vision and a dedicated staff, the Bureau could truly revolutionize the way project sponsors access federal credit programs, but implemented poorly, this office could add additional time, effort, and resources to an already protracted process.

Finally, what impact will the Presidential election have on the future of the Bureau? As a legal entity created by the FAST Act, the Bureau will still exist in the next Administration, but how the next President and Secretary of Transportation choose to use the Bureau could vary widely. One perspective could be to view the Bureau as an office with almost unprecedented statutory carte blanche to streamline, accelerate, and reform the credit programs and environmental permitting requirements administered by the Department. The next Administration could recognize how meaningful the Bureau could be and take the baton from Secretary Foxx.

On the other hand, the next Administration could view the Bureau as a layer of bureaucracy unnecessarily duplicative of the functions better served by the modal administrations. Should such be the case, the next Administration could retain the Bureau’s existence on paper while decentralizing its functions back to the modes.

The Build America Bureau provides an historic opportunity for U.S. DOT to promote the accessibility of its loan programs and to accelerate the environmental permitting process for complex infrastructure projects. The appropriate disposition of these issues will be critical to the successful fulfillment of its statutory mandate.

Structuring Successful Broadband P3s

Public entities have recently been looking for new ways to harness right of way (ROW) for broadband public-private partnership (P3) projects.  Last year, the city of Santa Cruz made history by entering into a roughly $50 million P3 with local Internet service provider Cruzio to deliver 1-gigabit broadband access to every property in the city’s jurisdiction.  Construction began this month.  San Francisco is now considering pursuit of a similar P3.  On the other side of the country, the Pennsylvania Turnpike Commission (“PTC”) recently released requests for proposals for legal and financial services for a broadband network P3 along the Turnpike right of way.  The State of Kentucky entered into a 30-year P3 in 2015 with a private consortium with the goal to build a middle-mile broadband network to promote economic development, education and research capabilities, public safety, healthcare delivery and connectivity for libraries and communities.

The Santa Cruz and PTC P3 projects offer a study in contrasts.  These two projects are using the P3 delivery model to meet different goals.  Santa Cruz is using a P3 to expand broadband service within the municipality where the public will benefit from improved internet service and the private partner will benefit from increased business.  The city plans to fund the project through a municipal bond backed by the future revenues from the service.  Santa Cruz will own the network and Cruzio will operate it, paying the city rent.

While some of the details are unclear, it appears that the PTC is pursuing a shared resource model for its broadband P3.  The PTC will make ROW available for a broadband fiber optic backbone with a WIFI overlay in exchange for dark or lit capacity (conduit alone or conduit plus service, respectively).  The public benefit from this model is the increased service and capacity of the network for agency needs, and the private benefit is the ability to build and run a major backbone fiber optic system while avoiding right of way rental fees.  In essence, the shared resource model allows a public entity to leverage private investment within its ROW to receive broadband capacity in return.

The economic beauty of the shared resource model lies in the fact that the incremental cost to the broadband provider of delivering backbone capacity to the public agency is a fraction of the value of that capacity to the agency and a fraction of the rental value for the right of way.  For this low incremental cost, the broadband provider delivers value equal to or greater than the fair market rent that the public agency would otherwise charge.  A true win-win.

As public entities continue to pursue broadband P3 projects, they must carefully assess and allocate the respective roles and responsibilities of the public and private partners.  In addition to the design, construction, finance, and operations/maintenance of the broadband infrastructure, public entities must also consider how the telecommunications service will be provided and how it will be marketed.  Unsurprisingly, how these roles and responsibilities ought to be allocated will depend on the government’s objective.  Project success depends on tailoring the delivery model to these objectives and financial constraints.

For this reason, the Santa Cruz P3 is going to allocate roles and responsibilities differently from the project the PTC is pursuing.  The PTC is not seeking to provide last-mile internet service as a utility to a broad citizenry, as Santa Cruz is.  Instead, entering into a broadband network P3 will provide the PTC and the Pennsylvania Department of Transportation improved network connectivity through lit capacity for these agencies’ own needs along the Turnpike’s 550 miles of right of way.

Under the utility model, the public agency usually owns and maintains the fiber network and the private entity usually designs, constructs, administers, and markets the project and its resulting Internet service.  Financing may be done by either or both parties.  This model can scale and fund the project in one of two ways—first, as a ubiquitous system with a corresponding basic “utility” charge to all residents to finance the project with a corresponding option for each resident to enter into an individual contract with the Internet service provider, or second, on a pay-as-you-go basis that would be less expensive initially but would not provide ubiquitous service.  San Francisco is grappling with these choices in its own quest to provided 1-gigabit services throughout the city and county.

This allocation of roles does not necessarily make sense for a broadband P3 project like the PTC’s.  The public agency does not need to own, operate or maintain the backbone system in order to attain its objectives.  It merely needs the rights to its allocated capacity from the larger system.  The broadband provider needs to finance, build, operate/maintain and market the rest of the system in order to generate revenues and profit from its capacity.

The Institute for Local Self-Reliance recently published a report addressing many of these issues, ultimately concluding that successful broadband P3s are structured in a way that provides meaningful benefits and control for both the public and the private entities involved.  Public entities interested in pursuing broadband P3s must weigh the unique risks and rewards associated with such an arrangement and carefully allocate control to deliver a project that will succeed.  As has been clear from the Santa Cruz and PTC cases, how broadband P3s are structured may vary greatly in order to tailor the P3 delivery model to different objectives and financial circumstances.

Thousands Of Californians Sign Up For VMT Trial

In response to a request from the California Department of Transportation, 5,000 California drivers signed up for the state’s nine month pilot program to replace the state’s gas tax with a charge based on vehicle miles traveled.  Starting July 1 of this year, the volunteers will make simulated payments based on how many miles they travel.  Participants include drivers from every part of the state and from every socioeconomic background, according to Malcolm Dougherty, Caltrans executive director.  “The opportunity to provide valuable input and evaluate the viability of a mileage-based user fee system demonstrates the commitment that Californians have to our roads and keeping them well maintained,” said Dougherty.  Findings from the program will be reported to the State Legislature and the California Transportation Commission at the end of the program in March 2017.  Ultimately it will be up to the State Legislature to decide whether to switch from the current state gas tax to a full-scale, road charge program.

California’s gas and diesel taxes bring in $2.3 billion per year to fund operation and maintenance and capital costs on California’s 50,000 lane miles and 13,000 bridges, leaving nearly $5.7 billion in unfunded repairs each year.  The VMT program starts just after the California Transportation Commission voted in May to cut planned road and transit projects totaling $754 million and delayed another $755 million of planned work from the state’s five-year transportation plan because of a decrease in gasoline tax revenues due to improved gas mileage and a drop in fuel prices.

Participants in the study, including 50 members of the California Trucking Association, pick from six simulated payment options, including a time permit that allows unlimited travel for a specific period, a mileage permit, and an odometer-based charge.  Options to record the vehicle mileage include a device that plugs into the vehicle’s electronics, a smartphone app, and one that records mileage through the onboard technology found on most new vehicles.

At the federal level, FHWA is considering applications from other states for a $1.5 million grant to fund a mileage fee pilot program, including along the I-95 Corridor that runs from Florida to Maine.  According to a survey last March of motorists across the country, a large majority support a shift to some form of road user fee from the gas tax, realizing that new ways are needed to fund construction and maintenance of surface transportation infrastructure in the US.

National Council for Public Private Partnerships asks “What’s Next?” at its Annual P3 Connect Conference

The National Council for Public Private Partnerships, reengineered its 2016 “P3 Connect” annual conference June 27 to 29, 2016, posing the question “What’s Next” for public-private partnerships in the United States.  NCPPP (as it is widely known in the P3 space) launched four Institutes to offer answers.  NCPPP created four separate Transportation, Energy, Real Estate and Social Infrastructure and Water institutes, each of which met in Chicago over the three day conference starting discussions with “where are we now” and ending with “where do we go from here.”

In parallel, NCPPP reprised its P3 “Bootcamp,” drawing participants from across P3 industry to present their thoughts and experiences in “What’s Next” discussions to those who sought a primer in terminology, history, challenges and advantages.  This year’s P3 Connect offered both a “101” and “201” course of study that offered both introductory and deeper looks into P3s structures, implementation, financings and challenges.

Several prominent projects and peoples were recognized with the 2016 National Public-Private Partnership Awards.  The Excellence in Individual Leadership Award was given to John Picerne, founder and CEO of the Corvias Group, which itself is comprised of three companies fostering long-term relationships in the military and university housing spaces, as well as the Corvias Solutions arm, fostering creative P3 opportunities, most recently with renewable energy platforms on military facilities as well as the first-of-its-kind Prince George’s County stormwater P3.  Infrastructure Project Awards went to Presidio Parkway and the Grand Parkway Project, two landmark transportation projects that are in service.  Other awards recognized creative municipal redevelopments and the merits of service-based P3s with the “NYC SAFE Disposal Program,” which granted a concession to manage household hazardous materials disposal in New York City.

NCPPP anticipates continued work through its Institutes, including plans to stand up a federal P3 Institute as the P3 market continues to explore new spaces.

NCPPP is a non-profit, non-partisan organization founded in 1985 and reimagined in the early 2010’s and presents itself as a forum for the brightest ideas and innovators in the partnership arena.  NCPPP, and each of its institutes, advocates for the advantages of P3 solutions to infrastructure and other challenges and facilitates the formation of P3s to deliver solutions to those challenges.

Maryland Purple Line Concessionaire Achieves Financial Close – Time to Build!

Financing for the Maryland Purple Line closed on Friday, June 17 – marking an important milestone for the Maryland Transit Administration’s (and Maryland Department of Transportation’s) plan to deliver a transit solution to ease travel between the Maryland suburbs and Washington, D.C.

Once the project reached commercial close in early April, the winning concessionaire, Purple Line Transit Partners LLC (PLTP), worked closely with the MTA/MDOT team to finalize the financing structure and various other issues. This culminated in a week of financial closings which allowed the precedent-setting approximately 36-year public-private partnership (P3) to proceed.

PLTP’s financing plan included:

  • Negotiating an $874.6 million Transportation Infrastructure Finance and Innovation Act (TIFIA) loan, which closed June 14;
  • Securing approximately $313 million in Private Activity Bonds (PABs), issued through the Maryland Economic Development Corporation and underwritten by JP Morgan and RBC Capital Markets, on June 17;
  • Harnessing $138 million in private equity from PLTP’s members; and
  • Utilizing approximately $900 million in anticipated federal “New Starts” grant funding.

The Purple Line’s financing structure helped Maryland taxpayers realize substantial savings. Since the proposal deadline in late 2015, due to rate and credit spread risk sharing under the project’s P3 agreement, the State of Maryland will save more than $550 million over the term. The PABs utilized in the project, in fact, were sold at the lowest interest rates ever achieved in the United States P3 market.

As the project reached financial close, the parties also executed an amendment to the P3 contract. The amendment reduced the base availability payments owed during the operations period to amounts determined by factoring the savings on future interest payments into PLTP’s financial model.  Maryland anticipates that the “New Starts” full funding grant agreement with the Federal Transit Administration will be signed later this summer.

The Purple Line achieved several industry milestones. It is the largest full DBFOM P3 in the history of the U.S. and Maryland’s third – and by far largest – P3, with total value over the term at approximately $5.6 billion, including a capital cost of about $2 billion. The project also secured the fifth largest TIFIA loan (and second largest TIFIA loan for a P3 project) in the TIFIA program’s history.

Jumpstarting the development process, the parties negotiated a notice to proceed that allowed limited work to proceed before the financial close. Construction activities are on schedule to begin in late 2016, and the project is slated to open for service in spring 2022.

The project faced several challenges, including a change in state executive administration and ongoing litigations generally involving environmental impacts diligence and property valuation. It also grappled with stakeholder demands and a need to find cost efficiencies during a formal procurement lasting more than 30 months.

For more on the history of the Purple Line, please see our previous blogs here and here .  More information on the project can be found at purplelinemd.com.

Successful Proposer Selected for UC Merced 2020 Project

The Regents of the University of California announced on June 15, 2016 that it has selected Plenary Properties Merced as the successful proposer for the UC Merced 2020 Project.

“We are impressed by the creativity, efficiency and aesthetic qualities evident throughout the winning proposal,” said UC Merced Chancellor Dorothy Leland.  “Plenary Properties Merced has produced a compact, environmentally sensitive design that blends beautifully with our existing campus, facilitates our multi-disciplinary teaching and research methods, and provides flexibility for future changes in building usage.  Most important, it’s a cost-effective way of building out our campus.”

The Plenary Properties Merced team includes Plenary Group, as sole equity member, Webcor Builders, as lead contractor, Skidmore, Owings & Merrill Inc., as lead campus planner, and Johnson Controls Inc., as lead operations and maintenance firm.  UC Merced

The project is the first higher education availability payment P3 project to be awarded in the United States, and may well serve as a template for future higher education capital projects, both within the UC system and nationally, if successfully completed.  “UC Merced, the youngest campus in our system, is poised to become a model for our other campuses as we look for the most efficient ways to construct, operate and maintain facilities that enable us to pursue our teaching, research and public service missions,” said UC President Janet Napolitano.

The project involves the design, construction, financing, operation and maintenance of a broad mix of academic, residential, student life, and recreational facilities at the University of California’s youngest Merced campus for a 39-year contract term.  The project will nearly double the physical capacity of the campus and is intended to support projected enrollment growth from 6,700 current students to 10,000 students within five to seven years.

The UC Board of Regents will be asked to approve the project’s conceptual design and related external financing in July, and the project is anticipated to reach commercial and financial close in August.  Delivery of the first set of facilities is scheduled for 2018, and the full project is scheduled to be delivered by 2020.

Click here for more information about the UC Merced 2020 Project.

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