Fulbright client, Meridiam Infrastructure, and its special purpose vehicle, Long Beach Judicial Partners LLC (LBJP), closed a public-private partnership (PPP) transaction with the Judicial Council of California, Administrative Office of the Courts (AOC), to design, build, finance, operate and maintain a new $492M courthouse and a related existing parking structure in Long Beach, California.
The Long Beach Court Building project is notable because it is the first social infrastructure PPP transaction in the United States and it is the first non-transportation PPP in California. The project also marks the first time the AOC will use “performance-based infrastructure” to deliver a courthouse.
Occupying six acres of state-owned land, the project has secured $442M worth of debt financing from a club of six banks through a 7-year mini-perm financing structure.
Fulbright advised Meridiam Infrastructure and LBJP throughout the process, from the development of LBJP’s bid for the project, which was submitted in December 2009, through LBJP’s selection as preferred bidder in June 2010, and the finalization of the project contracts and financing documents on December 20, 2010.
“We are delighted to have worked with Meridiam on this ground breaking PPP project, which represents a significant development in the procurement of social infrastructure in the State of California and nationally across the United States” commented Andrew Hart, London-based Partner, who co-led the Fulbright team, together with New York-based Senior Counsel Michael Pikiel and New York-based Partner Mark Tibberts.
Mike Pikiel added that “as part of the “performance-based infrastructure” construct and under the 35-year project agreement, the project must be designed and built to meet certain specified standards and the AOC makes availability payments only if the building is operated and maintained in accordance with detailed performance criteria. This delivery method has broad application and can be used in other social infrastructure sectors such as schools, government buildings, prisons, military, and water and wastewater treatment.”
The completed courthouse will be a multi-story, an approximately 545,000 square feet facility that will accommodate 31 civil and criminal courtrooms, 800 workers and 3,500 to 4,500 daily visitors. The building will include office space that will be leased to the County of Los Angeles for its justice related agencies, compatible retail space, a controlled-entry space, and an in-custody holding facility. A nearby existing parking structure will also be renovated and expanded to over 900 spaces as part of the project. Development of the project is slated to begin nearly immediately and the new courthouse is scheduled for occupancy in late August, 2013.
The Fulbright team representing Meridiam and LBJP, which included many disciplines and several Fulbright offices, was lead by Andrew Hart, partner (London), Mike Pikiel, senior counsel (New York) and Mark Tibberts, partner (New York). They were supported by Dayna Volpe, associate (New York) and Alyssa Vazquez, senior associate (New York). The team also included Victor Hsu, partner (Los Angeles) and Robert Barnes, senior counsel (Los Angeles) with respect to real estate, leasing and California legal matters, and David Gillespie, partner (New York) with respect to tax matters. Partners Dick Bourgeois, Dick Kornblith, Andrew Demetriou, and associate Jessica Olmon also contributed.
