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Travis Commissioners hear more details on new courthouse project

Wednesday, April 18, 2012 by Michael Kanin

Consultants hired to assist Travis County officials with key construction decisions related to its potential new downtown Civil and Family Courthouse recommended Tuesday that the county not build the structure to its maximum legal size. Instead, the consultants – with international firm Ernst & Young – suggested that the building be limited to a smaller size due to concerns about overbuilding and parking.

 

They also noted that the court could use either traditional construction methods or a public-private partnership that could find the county ceding building maintenance and operations to a private firm. The total costs of the project would range from just under $268 million to more than $404 million, depending on which construction method the Travis County Commissioners’ Court selects. The county’s contribution to those costs could also vary.

 

Whatever decision is made by court members, Ernst and Young representatives urged them to pick up the pace. “One recommendation that’s not on here that we would like to make is move quicker,” said Mark Gibson, a principal with the firm’s Real Estate Advisory division. “There’s momentum for this project…don’t waste that.”

 

Travis County officials continue to deal with the lingering affects of the jurisdiction’s last major construction project. Years late, and millions over budget, the county’s Criminal Justice Center played a role in early discussions about the new courthouse. The shortcomings of the county on the project drove Commissioners Karen Huber and Margaret Gomez to call for the court to slow its process in order to avoid mistakes of the past.

 

However, the rest of the court continued to move forward on a track that called for both more information on the public private partnership idea and a firm to help vet that information. That process resulted in the hiring of Ernst and Young. 

 

If constructed, a new downtown courthouse would be built on a lot located at the corner of Third and Guadalupe Streets. It would serve as a new home for the civil functions of Travis County’s judicial system.

 

Initial projections completed by a different consultant – Broaddus and Associates – for illustrative purposes suggested that the lot at Third and Guadalupe could accommodate up to 2 million square feet of development. If built to full capacity, court members were told that the building would be the largest west of the Mississippi River. (See In Fact Daily, August 18, 2011).

 

Ernst & Young consultants suggested that this approach might not be wise. According to a presentation offered by the consultants, “significant uncertainty” exists about how much market-support the county could count on over the length of the development timeline. Ernst and Young’s team also expressed concerns about potential over-development in “multi-family and hotel uses” and how that could affect any broader county project.

 

The use of a public-private partnership to finance the project could allow Travis officials to rely on some level of private funding to finance it. Though this approach could relieve county officials of some of the fiscal burden associated with the new courthouse, because private, taxable, bonds would be a featured method of financing, interest costs could escalate.

 

However, a value-for-money calculation performed by Ernst and Young suggested that the cost of constructing the facility via public-private partnership could be as much as $12 million less than a traditional, design-bid-build method. A design-build approach would result in roughly $11 million in savings over a design-bid-build effort.

 

Commissioners and their consultants have heard a range of options for the final construction of the facility. Besides various figures associated with space and cost, the prospect of including a retail portion of the development has also surfaced.

 

Ernst and Young presented the court with four potential construction scenarios. Three of these called for them to authorize only the courthouse portion of the project. The fourth suggested a larger project that would produce not only a fairly sizable courthouse and parking structure, but the potential for a retail tower to be added at some point in the future.

 

County Judge Sam Biscoe seemed ready to defer to Ernst and Young’s call for quick movement. He set the item to return next week for a possible decision on construction method.

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