Performance-Based Infrastructure

Innovations in the California Courts - 20 of Years of Great Ideas
One Branch: Performance-Based Infrastructure

In 2002, ownership of California’s trial court buildings passed from the 58 counties to the judicial branch of the state. With this transfer, completed in 2009, came the responsibility of maintaining the court buildings and constructing new facilities. Many of the buildings are in poor repair, while others are simply outmoded and need to be replaced.

The Office of Court Construction and Management (OCCM) was created in 2003 as a division of the Administrative Office of the Courts. OCCM is charged with managing existing court facilities, repairing and remodeling these facilities as needed, and constructing new buildings. At present, more than 50 new construction and major remodeling projects are in various stages of completion. Most of these projects were funded through legislation authorizing the collection of court user fees and assessments set aside for this purpose. However, in this time of fiscal constraints, some of the funding authorized for court construction has been borrowed or reallocated for other purposes, so the judicial branch is exploring other methods of financing its building projects.

Currently, about 100 more courthouse construction projects need funding. No single source of public funding is large enough to finance these projects. Because of this shortfall, the Judicial Council, through the AOC, is pilot-testing an innovative way to finance and construct new court buildings called performance-based infrastructure, or PBI.

PBI is a partnership between the public sector owner—in this case, the judicial branch— and a private project company that—in the case of the new Long Beach courthouse—finances, designs, and builds the courthouse and then operates and maintains the building. Once the court occupies the building, the judicial branch pays the project company an annual fee; the state is the legal owner of the land and building. The yearly payment is performance based; that is, it is conditional based on the successful operation and maintenance of the building.

This performance-based approach ensures that the private partner will employ high standards both in construction and in maintenance of the court building.

The PBI delivery method contains other advantages for the state—and the taxpayers. It transfers many of the risks of development from the state to the private company. The private partner undertakes the construction on a fast-track basis, which leads to rapid creation of much-needed local construction jobs, with the economic benefits they bring. The state does not begin to pay until the court building is occupied.

The new Governor George Deukmejian Courthouse in Long Beach is the first courthouse in the United States to be built using the PBI method. In 2010, the AOC reviewed applications from three consortia and selected Long Beach Judicial Partners as the project company. Construction began in May 2011; by the end of August, the foundation was finished and construction had begun on the building.

The new courthouse site, located on Magnolia and Pine in downtown Long Beach, is scheduled to open in late 2013. Chief Justice Tani Cantil-Sakauye (fourth from the right) attended the groundbreaking ceremonies held on April 7, 2011. The striking design of the new courthouse will make it a landmark addition to downtown Long Beach. The 31-courtroom building will cost $490 million, and construction will be completed in late 2013. Long Beach Judicial Partners will manage and maintain the building for 35 years and then turn the building over to the judicial branch.

The project in Long Beach is a pilot effort meant to test PBI as a project delivery method. If the public/private partnership proves successful, the experience gained will be invaluable for similar projects in the future.

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