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Howard County looks to private sector for $139 million courthouse replacement project

Howard County Executive Allan Kittleman is turning to the private sector to help fund a $139 million courthouse to replace the current 174-year-old historic building in old Ellicott City, a relic of a bygone era struggling with limited space and security for more than two decades.

Bogged down by the hefty price tag, plans to replace the aging building have died in the hands of county executives since the late 1980s. Kittleman seeks to finance the project using a P3, a public-private partnership in which the county and the private sector share costs — the first of its kind to fund a courthouse in the state.

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Kittleman said the proposed partnership is "the most efficient and effective way to deliver a modern facility at the best value to our taxpayers in the long run" as the county balances other capital projects, like a 13th high school.

If the Howard County Council approves the plan in March, the county will build the new 227,000-square-foot courthouse on county-owned land on Bendix Road in Columbia, a complex that houses several government offices, including offices formerly under the courthouse that were pushed out to conserve space. The project, which includes a 600-space parking garage and eight courtrooms — three more than the current courthouse — would open by mid-2021, according to early county estimates.

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In an all-too-familiar pledge by local politicians to revamp the courthouse, Howard County Executive Allan Kittleman plans to replace the aging building. He is exploring a roughly $128 million public-private partnership, the first of its kind to finance a courthouse building in the state.

The county typically floats bonds for construction projects and hires companies to handle design, construction and maintenance in separate competitively bid contracts. In the P3, the county would enter into a 30-year contract with a private consortium of consultants, who would handle design, construction and maintenance of the site.

Holly Sun, the county's budget director, said the P3 allows the county to share risks with the private sector and provides "a faster and guaranteed way" to complete and maintain the courthouse over 30 years. The private sector would shoulder operation and maintenance.

But the county must ensure the contract is broad enough to allow the private and public partners to complete the site using innovative approaches, Sun said. A common criticism of P3s is the contracts lock public agencies into a preconceived design that limits the county's flexibility, according to a report by the U.S. Department of Transportation.

The hybrid P3 project costs $24 million less than the traditional method of financing through county-issued bonds. The county is considering a hybrid partnership, which shares costs between the public and private sector. A complete P3 relies entirely on the private sector and would cost $328 million or $15 million more than the traditional method, Sun said.

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IMGRebel, a private consultant hired by the county to explore funding options, recommended pursuing a hybrid P3, but the Kittleman administration has not determined how much money the county would front.

"If there is a consensus from elected officials that we want to do this, then we'll officially start the competitive-bidding process. We're really at the early preparation stage," Sun said.

In January, an advisory group that gives recommendations on the county's financial picture, the Spending Affordability Advisory Committee, unanimously recommended a hybrid P3 model in which the county and the private sector split the costs of the project evenly while ensuring operation and maintenance costs remain predictable and affordable over time.

The committee concluded the project would not impact high bond ratings the county has maintained for 19 years in a row. If the county splits costs evenly, the annual impact of the project on the budget could be between $14.4 million and $17 million in 2022, according to the report.

In the past, county officials mulled expanding the existing location, repurposing land in Normandy Shopping Center in Ellicott City or tearing down the current structure.

The county expanded the building in the late 1930s and 1960s, and, in the mid-1980s, poured $11.3 million into the courthouse to extend the structure to six levels. Plans for a $9 million renovation in 2012 were scuttled because of limited security at a proposed site in Columbia.

The new courthouse on Bendix Road would be built after the current government complex is demolished. The county plans to lease space for displaced offices and identify a long-term plan, which could include purchasing an additional building, in the near future, said Jim Irvin, director of the county's Department of Public Works.

The Council will formally introduce the bill on Feb. 6 at 7 p.m at the George Howard Building in Ellicott City. A public hearing on all legislation introduced in February will follow on Feb. 21 at 7 p.m.



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