K-12 School District First In U.S. To Use P3 Concession Agreement

In Maryland, the Prince George's County Public Schools will tap into a Public-Private Partnership (P3) Concession Agreement to design, build, and maintain six new schools.

In Maryland, Prince George’s County Public Schools (PGCPS) and Prince George’s County Education & Community Partners (PGCECP) are using an alternative construction financing project to design, build, finance, and maintain six public schools. The K-12 school district is the first in the nation to partner with the private sector to bundle a multi-school delivery program, which will deliver the urgently needed schools by 2023.

The PGCECP consortium includes developer Fengate Capital Management Ltd., design-build contractor Gilbane Development Company/Gilbane Building Company, designer and architect Stantec, and maintenance services provider Honeywell. JLL served as the technical and financial advisor to PGCPS.

Prince George's County
A rendering of Hyattsville Middle School, one of six public schools to be built in Prince George’s County, MD as part of a public-private partnership. (Image: Prince George’s County Public Schools)

Formally known as the Blueprint Schools, the agreement between PGCPS and the lead member of PGCECP was finalized in mid-December. Through the initiative that supports approximately 8,000 students, PGCECP will design, build, finance and maintain the new Drew-Freeman, Hyattsville, Kenmoor and Walker Mill middle schools, as well as a new middle school and K-8 school in the Adelphi and southern areas of the county. This pioneering delivery approach is the first of its kind for a U.S. public school system and is designed to build new schools faster, cutting the delivery time in half with lower construction costs and preventative maintenance.

Following commercial and financial close, PGCPS and PGCECP together announced the creation of a $1 million endowed fund supporting scholarships, student internships, mentoring opportunities and apprenticeships valued at $4.7 million, as part of the school system’s Alternative Construction Finance Program.

Other community benefits include the guaranteed procurement of at least 30 percent of total eligible costs of the program to minority-owned businesses, community-based enterprises, and community-based small businesses that will serve as a much-needed economic stimulus. In addition, approximately $174 million in savings is expected in deferred maintenance and construction costs, compared to a traditional construction procurement model.

“It is vital that we continuously invest in our students’ future and today’s announcement will allow us to do just that,” said said Dr. Monica Goldson, Chief Executive Officer, PGCPS. “Throughout this process, Prince George’s County Public Schools has remained committed to our goal of supporting our students at every stage of their educational experience, ensuring they have every tool needed for success. We cannot afford to wait another 10 years to provide our students, teachers and communities with new state-of-the-art facilities. I look forward to working with Prince George’s County Education & Community Partners to complete an investment that is long overdue.”

Prince George’s County is rapidly growing as evidenced by increasing housing demand, job growth, and economic strength over the last few years, according to JLL. This swift growth brings a strong need for additional K-12 schools that will meet projected enrollment numbers, in order to provide a solution for overcrowding and to modernize existing schools in safety and productivity for the long term. More than half of the county’s schools are over 50 years old.

Utilizing the P3 Concession Agreement structure, PGCECP will deliver the new schools and be responsible for the maintenance and renewal of the facilities for 30 years. Upon completion of the $1.24 billion program, the schools are guaranteed 15 years of useful life remaining on all major building systems, including roofs, HVAC, electric, plumbing and so forth.

“This P3 is so special because it is a major step forward in delivering equal opportunities to the students and families of Prince George’s County,” said Bob Hunt, Managing Director, Public Institutions, JLL. “Without this agreement in place, it would take more than 15 years for these schools to get funded and built. Of the many learnings uncovered from this year’s pandemic, I think we can all agree on the pivotal role our schools and their faculties play in the lives of our children.”

The new schools will support the education of thousands of students and save the county millions of dollars in building costs and deferred maintenance.

“With municipal budgets bearing the burden of the pandemic nationwide, these types of agreements can offer a real solution to ensure that schools can be built and maintained while providing budget certainty,” said Lindsay Stowell, Executive Vice President, Public Institutions, JLL. “Deferred maintenance can cause a domino effect on infrastructure—and one that is challenging and costly to bounce back from. This P3 eliminates that concern and promises institutional pride for many years to come.”

“We are pleased to have reached commercial and financial close on this critical project and to be a part of the new scholarship, internships, and apprenticeships program announced today,” said Mac Bell, Managing Director, Infrastructure Investments, Fengate. “We are honored to partner with PGCPS to deliver this much-needed infrastructure for Prince George’s County and its students, and we are committed to ensuring the benefits of this project extend beyond the buildings, in support of student development and community businesses through the endowment fund and work and training opportunities.”

“This is an important step toward realizing new critical school improvements for Prince George’s County while offering new educational resources to support its students,” said Darin Early, Managing Director, Public Private Partnerships, Gilbane Development Company and Principal-in-Charge, Prince George’s County Education & Community Partners. “Gilbane Development Company and Gilbane Building Company are honored to be a part of this innovative partnership that will modernize schools for 8,000 students while driving local participation and apprenticeship opportunities, and boosting economic inclusion.”

“Having built schools in the state of Maryland for more than 25 years, we know how transformational they can be to a community and we look forward to this impactful collaboration with Prince George’s County Public Schools,” said Paul J. Choquette, III, Executive Vice President, Gilbane Building Company. “Our partnership will support economic inclusion for the county while we build vital new schools for the community.”

“This critical milestone allows us to now focus on the design and construction of education spaces that will meet the growing needs of the community,” said Laura Sachtleben, Education Sector Leader for Stantec. “We are honored to be designing these new schools which will offer innovative learning environments through small and large group instruction and peer-to-peer engagement while helping students discover their skills and interests.”

“Honeywell is proud to be a part of this effort to not only create and service new schools but also build learning opportunities in the Prince George’s County community,” said Keith Fisher, vice president and general manager of Services for Honeywell Building Technologies. “As the services partner for this effort, we understand the unique needs of the education sector and the need to keep buildings in prime condition to foster and enhance the learning environment.”

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