On August 8, 2011, the 1st District Court of Appeal in San Francisco published a decision holding that Phase 2 of the Presidio Parkway project can move forward as a public-private partnership (P3). The unanimous opinion approved of and affirmed the February decision by Judge Wynne Carvill of the Alameda County Superior Court to the same effect, allowing the California Department of Transportation (Caltrans) and the San Francisco County Transportation Authority (SFCTA) to proceed with Phase II as a P3. The decision was issued less than five months after the appeal had been taken, because Caltrans and SFCTA had asked the Court to expedite what would normally be a longer process in order to get the critical project moving forward promptly.
Professional Engineers in California Government (PECG), the union representing Caltrans engineers, sought to stop Phase II of the project, which is replacing the old and outmoded approach to the Golden Gate Bridge in San Francisco. PECG sued Caltrans and the SFCTA, arguing that the project was not authorized by Streets and Highways Code section 143, recent legislation broadening the types of P3 projects that could be performed in California. However, the Court of Appeal rejected PECG’s argument that, under section 143, Caltrans employees or direct consultants must perform all the preliminary planning and design services, as opposed to being only responsible to see them done correctly. The Court also rejected PECG’s other arguments, that the project was not supplemental and that P3 efforts under California law must be confined to toll projects, holding that the legislation authorized much broader use of innovative financing, in this case an availability payment.
The Presidio Parkway Project is the first project to reach award under California’s new public-private partnership statute. This decision should ease the way for other projects, and also provide helpful precedent for design build projects authorized under parallel legislation.
At the end of 2010, Caltrans, in cooperation with SFCTA, signed a contract awarding the project to Golden Link Concessionaire, LLC, a consortium led by Hochtief PPP Solutions North America and Meridiam Infrastructure North America.
PECG will have until September 16 to ask the California Supreme Court to review the Court of Appeal decision. It is not known if PECG will seek review, however the Supreme Court grants review in only a small number of cases based on specific criteria.
Nossaman represented SFCTA in the litigation and Caltrans was represented by its own Department counsel. Nossaman has also provided assistance to Caltrans in the procurement of the project.
For more about the Presidio Parkway Project and section 143, see Presidio Parkway Project Moves Forward as Court Denies Request for Writ of Mandate and Injunction, Presidio Parkway Project Awarded, Preferred Proposer Selected for Presidio Parkway Project, Final RFP for the Presidio Parkway Project Released, Presidio Parkway Reaches Two Important Milestones, and Presidio Parkway Project RFQ Issued.