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$500M Marion County Justice Center relies on novel funding

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A mainstay of the travel industry, all-inclusive packages are gaining traction with governments that want a simpler way to deliver new public facilities.

For an annual fee, a private-sector consortium will design, build, finance, maintain and operate a new road or building. The model is common around the world and in the U.S. transportation industry but still rare for buildings.

Indianapolis could become one of the first U.S. cities to ink such a deal with a new jail and courthouse on the former site of the GM stamping plant.

The project could cost as much as $500 million, but it won’t require a tax hike, and the annual fee won’t be any greater than the $122.6 million a year the city now pays to operate courts and correctional facilities.

At least, that’s the promise of Mayor Greg Ballard. Whether that promise is realistic is impossible to gauge because the mayor’s deputies won’t reveal details of their analysis.

Director of Enterprise Development David Rosenberg declined to state the maximum annual fee, which the city already has shared with three pre-qualified bidders. The mayor’s office also refused to release the request for proposals, a type of document typically considered a public record.

Indiana Public Access Counselor Luke Britt said he couldn’t think of an exemption to open-records law that would apply to the RFP. The city still had not cited an exemption as the story went to press.

Former city controller Jeff Spalding said the administration’s unwillingness to walk through the math behind its conclusions makes him skeptical the new facility won’t end up requiring more public dollars.

“I want the criminal justice center to happen,” said Spalding, who left the Ballard administration in April 2013 to become director of fiscal policy and analysis at the Friedman Foundation. “There’s more potential downside if you don’t do it the right way.”

Several other cities are considering the all-inclusive model for justice facilities. Houston issued a request for information but pulled it back after Indianapolis entered the market, Rosenberg said. He presumes Houston officials are waiting to see how Indy’s deal works out.

“We certainly have a lot of eyes on us,” Rosenberg said. “If this model becomes successful, a lot of other cities in the country will start to adopt it.”

Proposals from the three bidders are due in October. Rosenberg anticipates working with the preferred bidder on 35-year contract, which would be presented for the City-County Council’s approval in early 2015.

Eliminating inefficiencies

The city and Marion County currently spend $122.6 million on jail operations, rent for offices, rent for disparate correctional facilities and inmate care at Eskenazi Health, the county charity hospital, Rosenberg said.

That figure reflects inefficiencies like transporting inmates, much of which would be eliminated with a new, modern jail sharing a campus with criminal courts, Rosenberg said. He declined to go into detail about the expected savings on operations.

Spalding said he wonders whether the assumed savings are too optimistic.

Current spending includes an $18 million-a-year contract with Corrections Corporation of America, which operates one of two county jails. That contract expires at the end of 2017, and it won’t be renewed.

“I don’t disagree that they’ll end the contracts, but all of the expense for the services delivered under those contracts will not disappear,” Spalding said.

The annual fee won’t be the city’s only expense once the justice center is built. The sheriff will continue to provide jail security, food and laundry service, and the city will have to pay the utility bills.

Performance requirements

The certainty of predetermined annual payments from a government entity is attractive to private-sector players because it helps them find investors or lenders, said Allan Marks, a partner in the Los Angeles office of law firm Milbank Tweed Hadley & McCloy, which has a large practice in global finance.

Carrying the debt and turning a profit are up to the consortium of finance, construction and architecture firms. “A lot of these deals don’t work,” Marks said. “There are some that do. The private sector thinks they can manage the risk.”

Marks said the deals don’t mean lower costs across the board, but construction, financing and long-term maintenance, taken together, should be less expensive than if handled separately.

All-in-one contracts are less common for public buildings, but Indianapolis found examples in Ontario and California.

A new courthouse in Long Beach, California, cost $346.7 million, and the state will pay an annual fee to a consortium called Long Beach Judicial Partners, according to the state Administrative Office of the Courts.

The service fee for the 2014-15 fiscal year is $51.8 million, a courts spokeswoman said. That includes a capital charge of $35.9 million for the design, construction and financing.

The operations and maintenance portion of the fee is subject to inflation-based increases, and it can be reduced if LBJP doesn’t meet certain performance requirements.

One of the attractions of “performance-based infrastructure,” Rosenberg said, is that it requires the private-sector partner to periodically replace or refurbish things like heating and cooling systems and roofing.

Because of those life-cycle upgrades, the justice center should be in good shape when it’s turned over to the county after 35 years, Rosenberg said.

“We don’t get back a building that’s 35 years old. We get back a building that’s seven, eight, nine years old. We can operate it again for an additional 20 to 30 years,” Rosenberg said.•
 

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  1. Good luck, but as I have documented in three Hail Mary's to the SCOTUS, two applications (2007 & 2013),a civil rights suit and my own kicked-to-the-curb prayer for mandamus. all supported in detailed affidavits with full legal briefing (never considered), the ISC knows that the BLE operates "above the law" (i.e. unconstitutionally) and does not give a damn. In fact, that is how it was designed to control the lawyers. IU Law Prof. Patrick Baude blew the whistle while he was Ind Bar Examiner President back in 1993, even he was shut down. It is a masonic system that blackballs those whom the elite disdain. Here is the basic thrust:https://en.wikipedia.org/wiki/Blackballing When I asked why I was initially denied, the court's foremost jester wrote back that the ten examiners all voted, and I did not gain the needed votes for approval (whatever that is, probably ten) and thus I was not in .. nothing written, no explanation, just go away or appeal ... and if you appeal and disagree with their system .. proof positive you lack character and fitness. It is both arbitrary and capricious by its very design. The Hoosier legal elites are monarchical minded, and rejected me for life for ostensibly failing to sufficiently respect man's law (due to my stated regard for God's law -- which they questioned me on, after remanding me for a psych eval for holding such Higher Law beliefs) while breaking their own rules, breaking federal statutory law, and violating federal and state constitutions and ancient due process standards .. all well documented as they "processed me" over many years.... yes years ... they have few standards that they will not bulldoze to get to the end desired. And the ISC knows this, and they keep it in play. So sad, And the fed courts refuse to do anything, and so the blackballing show goes on ... it is the Indy way. My final experience here: https://www.scribd.com/document/299040062/Brown-ind-Bar-memo-Pet-cert I will open my files to anyone interested in seeing justice dawn over Indy. My cases are an open book, just ask.

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  3. They say it was a court error, however they fail to mention A.R. was on the run from the law and was hiding. Thus why she didn't receive anything from her public defender. Step mom is filing again for adoption of the two boys she has raised. A.R. is a criminal with a serious heroin addiction. She filed this appeal MORE than 30 days after the final decision was made from prison. Report all the facts not just some.

  4. Hysteria? Really Ben? Tell the young lady reported on in the link below that worrying about the sexualizing of our children is mere hysteria. Such thinking is common in the Royal Order of Jesters and other running sex vacays in Thailand or Brazil ... like Indy's Jared Fogle. Those tempted to call such concerns mere histronics need to think on this: http://www.msn.com/en-us/news/us/a-12-year-old-girl-live-streamed-her-suicide-it-took-two-weeks-for-facebook-to-take-the-video-down/ar-AAlT8ka?li=AA4ZnC&ocid=spartanntp

  5. This is happening so much. Even in 2016.2017. I hope the father sue for civil rights violation. I hope he sue as more are doing and even without a lawyer as pro-se, he got a good one here. God bless him.

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