Prince George’s County utilizes public-private partnership for K-12 school system

Normally, the process of building six schools would take up to 16 years to complete, while this project is expected to be completed in three due to the P3 agreement.

Located just minutes outside of Washington, D.C., Prince George’s County is home to the 20^th largest school system in the United States, supporting more than 136,500 students from surrounding urban, suburban and rural communities. Prince George’s County Public School’s (PGCPS) had a very clear goal: provide students with access to high-quality learning environments and a broad array of educational opportunities. But the goal was an ambitious one: at least 10 of PGCPS’ schools had already been closed due to safety concerns and more than 40 percent of the district’s properties built in the early 1960’s were in need of replacement or total renovation. With student enrollment increasing, PGCPS was left with few options but to build new schools. The challenge was finding the funds to support that construction, without jeopardizing the financial stability of Prince George’s County.

With a dual need to modernize buildings and secure funding, PGCPS turned to JLL who was able to help bring PGCPS’s vision to life. Charged with this objective, the firm crafted a unique, first-of-its-kind public private partnership (P3) agreement that would allow a private developer to design, build, finance, operate and maintain six new schools at a cost of $1.24 billion spread out over the next 30 years. In return, PGCPS and its students would get five brand new middle schools and one K-8 school in just three years and the taxpayers would save nearly $175 million in deferred maintenance and construction costs. Additionally, 30 percent of the project funds will be allocated to minority and woman-owned businesses and community-based businesses within Prince George’s County.

Although common in higher education institutions and K-12 schools in other countries, P3s haven’t been used by U.S. K-12 school districts for construction and maintenance of new school buildings – until now.

As the lead technical and financial advisor, JLL was able to deftly manage the process from the very beginning. Community interest was robust, so it was important to clearly communicate project updates and business needs to key stakeholders, including leadership at PGCPS and Prince George’s County. For this project, instead of the traditional, prescriptive and detail-oriented approach, PGCPS opted for an outcome-driven procurement, allowing the developer to determine the best path to achieve the desired performance specifications. The project and related financing was complex, requiring close communication and collaboration. As a result, request for qualifications, request for proposals, project agreements, technical and educational design specifications and the payment structure was carefully managed from strategy to closing.

When the schools are completed no later than 2024, they will be modern, data rich, and equipped with state-of-the-art technologies, furnishings, fixtures and equipment. The developer will be responsible for the maintenance and renewal of the schools until 2053 and the schools are guaranteed between 10 and 15 years of useful life remaining on all major building systems, including roofs, HVAC, and electric. Most significantly, PGCPS is able to transfer financial and maintenance risks to the developer, while retaining control of their schools and receiving a higher standard of care.

By taking a non-traditional route, PGPCS will empower and provide a first-class educational environment for thousands of students, create more than 3,000 jobs within the community, and save the county millions of dollars in building and deferred maintenance costs.