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Council leader flags holes in unique $140 million courthouse contract

Kate Magill
Contact ReporterHoward County Times

Howard County has selected a firm to design and construction its new $140 million circuit courthouse, but the head of the County Council said she won’t sign the deal until more of the developer’s contract is hammered out.

Bethesda-based developer Edgemoor-Star America Judicial Partners has been tapped to lead the design, construction and maintenance of the courthouse as part of a public-private partnership that will cost the county more than $300 million over 30 years.

The County Council must approve the agreement between the firm and the county.

Council chairwoman Mary Kay Sigaty said she’s skeptical of the deal because of information that’s missing from the contract, including the amount for the first annual payment from the county to Edgemoor-Star next year, estimated to be $10 million.

The amount owed could shift some depending on interest rates and inflation and the numbers likely won’t be final until the close of the deal later this fall, according to county spokesman Paul Milton.

There are also blanks in the contract, which needs council review, over when Edgemoor-Star may refinance the deal.

“I’m not prepared to approve a multi-year contract that we don’t know if it’s been fully negotiated yet,” Sigaty said. “I’m a steward of the taxpayer dollar and it’s irresponsible for me to approve a contract without having the negotiated terms in it.”

Officials from the Department of Public Works and the Office of Law are working with the council to include parameters for the charges in the contract before it’s approved and to show what the change in capital and facilities management charges could look like if interest rates move a half or whole percent, according to Milton.

If approved by the County Council, Edgemoor-Star will hire 23 partners to complete the project, which is scheduled to begin in August 2019 in Columbia.

Designs from Edgemoor-Star include a 237,000-square-foot courthouse, a four-story atrium, 691-space parking garage and space to add a sixth judge to the courthouse’s five-person bench.

“It was clear from the outset that the county was serious [and] organized and then demonstrated that by hiring very qualified advisers to help with the procurement and finally Howard County is a AAA county, we knew they had the credit to finance [the project],” said Brian Dugan, managing director for Edgemoor-Star.

The county has the highest bond rating — AAA — from Wall Street agencies which allows it to issue bonds at a lower cost, sometimes saving millions over the term of a loan for major construction projects and programs.

Replacing the county’s 175-year-old Ellicott City courthouse has been a priority for County Executive Allan Kittleman, who has been determined to secure financing for the project that’s been stagnant since the 1980s.

Due to the project’s large scale and $139 million price tag, the county pursued a unique public-private partnership that splits costs — and risks — between it and the developer.

Nine companies were interested in bidding on the project and Edgemoor was among three finalists.

Dugan said his firm has completed several similar projects, but that Howard’s is the fourth in the country of this specific nature that holds the firm to specific performance requirements during design and construction. Edgemoor completed a courthouse in Long Beach, Calif. under this method and is in the midst of two other courthouses using performance-based criteria.

Under basic terms of the deal, Edgemoor will finance and manage the design, construction and maintenance of the facility for 30 years. Howard County will pay the firm $75 million when it moves into the courthouse in 2021 as well as annual payments of approximately $10 million, adjusted for inflation, for the next 30 years.

After that, Howard County will take over the building and its upkeep. Assistant to the Director of Public Works Holger Serrano estimated the courthouse could last up to 100 years. Serrano did not have an estimate for future costs.

Other council members, including Democrat Jon Weinstein, are less concerned about any lapses in information in the agreement.

The council is expected to vote on the agreement on July 27, before its August recess. Council members are expected to discuss the contract at a work session on Monday.

kmagill@baltsun.com

twitter.com/kate_magill

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