Kutak Rock Client Prince George’s County Public Schools Closes First Public Schools P3 Project in the United StatesNews | January 12, 2021
Kutak Rock congratulates firm client Prince George’s County Public Schools (PGCPS), in conjunction with Prince George’s County Education & Community Partners (PGCECP), on the closing of its public-private partnership (P3) project. This project will build five new middle schools and one new K-8 school in Prince George’s County, Maryland and is the first K-12 school P3 to close in the United States.
More than half of the 208 schools in Prince George’s County are more than 50 years old and in need of improvements and modernization. PGCPS has identified that over $8.5 billion is needed over 20 years to fully modernize building systems and components, repair or replace existing schools, or expand existing capacities; however, approximately only $210 million is available annually via traditional funding, which falls substantially short of these critical infrastructure needs. By utilizing a P3, PGCPS chose to make use of an alternative funding approach in order to enable approximately 8,000 students to have new schools available to them as soon as July 2023.
The P3 approach of design-build-finance-maintain will allow the schools to be built faster, with approximately $174 million in savings from lower constructions costs and preventative maintenance costs. PGCECP will be responsible for life-cycle maintenance for a term of 30 years, with PGCPS always maintaining ownership, operational control, and certain day-to-day maintenance responsibilities for the schools.
While P3s have been used for a range of projects in the United States, this first-of-a-kind project required PGCPS to take a creative approach to many issues. For example, with the project taking place on six sites instead of one, there were many unique factors that required consideration. Additionally, PGCPS took a novel approach in dividing life-cycle and day-to-day maintenance responsibilities, allocating certain other risks among PGCPS and PGCECP, and ensuring wider community benefits are achieved through the P3. These types of customizations help demonstrate that P3s can be tailored to meet the unique needs of governmental entities and their private sector partners.
Since June 2019, Kutak Rock served as outside counsel to PGCPS and supported PGCPS to define, procure, negotiate, and execute this project. Hilary Jackler, Washington, DC/Richmond Regional Managing Partner, who led the Firm’s efforts of the project stated, “It has been a true pleasure to be able to support such committed PGCPS stakeholders on this ground-breaking project.” Partner Nicole Moriarty added, “We are honored and excited to have been a part of this innovation in school delivery and look forward to seeing how it will be used to meet the needs of additional student populations across the country.”