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Commissioners begin work on planning process for new courthouse

Wednesday, January 25, 2012 by Michael Kanin

The Travis County Commissioners Court has begun to sift through options for construction of a new downtown Civil and Family Courthouse. Though still early in the effort, court consultants delivered a rough picture Tuesday of a host of project financing, construction, maintenance, and operations choices.


The consultants, from multi-national firm Ernst & Young also discussed the intensity of the development. Should the site, which sits at 3rd and Guadalupe streets, be developed to its full potential, it would be the largest single building west of the Mississippi River. That would mean a maximum height of 72 stories, with 1.4 million square feet of leased space in addition to approximately 500,000 square feet of space the county would use.


Ernst & Young principal Mark Gibson pointed out that whether Austin would be able to support such a project would be a key question.


“The question is, can Austin absorb that?” said Gibson. “We heard in the public meeting, ‘we’d like to build the maximum we can on the site.’ Well, that’s fine in theory, but is it an economic reality, or will you have 20 floors of that building unoccupied?”


County officials and Ernst & Young staff will seek public comments on the project over the next three months. They will return to court on March 20 to deliver their recommendations. Commissioners will then make decisions about how to proceed—and whether or not the process should include private funding.


To complete the massive project, the court will consider engaging the private sector through a public-private partnership. Though widely used as an alternative construction option in British Commonwealth countries, such a process is not commonly used United States, Gibson said.


Gibson divided the court’s options into six basic categories. They included two traditional construction methods—design, bid, build and design build—as well as four public-private options—privatized lease-to-own, design build finance, design build finance maintain, and design build finance maintain and operate.


Design, bid, build is the traditional structure used by public entities in construction projects. Design build is an alternative to that process that would allow the county to hire one entity to conduct both the design and the construction phases of the project. These options are public-led.


Privatized lease-to-own would offer the county private money up front while allowing it to proceed in along more traditional construction methods. Design build finance would partner the county with a private entity that would also finance the project. Design build finance maintain would also have that entity pick up the tab for building maintenance, and design build finance maintain and operate would also have it pay for such amenities as janitorial service.


Gibson noted that Ernst & Young’s recommendations could incorporate elements from different processes. He added that the firm would compare the costs and benefits of the county operating and maintaining the building to the costs and benefits of private cooperation.


“We can absolutely put in numbers and put in writing that the (private) consortium maintain (its responsibilities to the building),” he said. “The question is: ‘Will you maintain it under the design-bid-build traditional way to that same level?’” 


Ernst & Young will also help the county decide on an appropriate set of partners for the project. The firm reported that 21 parties of various experience replied to a request for information (RFI) issued by the county for the project. Gibson added that the response was encouraging. “We saw a variety of development methods and financing methods…a great deal of flexibility in the marketplace,” he said. “(The) RFI validated significant local and national interest.”

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