In unique approach, one county utilizes a P3 to build public schools

A suburban Maryland school district, faced with the staggering prospect of dealing with a $8.5 billion backlog in building repairs and upgrades just a few years ago, celebrated the opening of six brand new middle schools this fall. The brightly lit, environmentally friendly buildings feature amenities like 3-D printers, performance spaces and ventilation systems that can screen out viruses. Even better, the schools come with a built-in maintenance plan for the next 30 years.

The program by the Prince George’s County Public Schools used a financing tool that’s more common for infrastructure projects like toll roads: a public-private partnership. By turning to the private sector, the school district was able to deliver the new schools in less than three years. Construction lasted only two years.

“It usually takes us six to seven years per school from design to construction completion,” said Jason Washington, an associate superintendent who oversaw the project for the school system. But existing buildings were up to 80 years old and falling apart, and the district was running out of space for middle school students. “We had to find a way to do it faster.”

The school district says the six schools cost $485.8 million, which includes the cost of facility maintenance for three decades. If it had used the traditional method for building the schools, the cost would have been $868.8 million, the school district says, and it would have taken 16 years to complete construction.

Lisa Buglione, the executive director of the Association for the Improvement of American Infrastructure, a group that promotes public-private partnerships, said the Prince George’s County project is the first in the country she is aware of that used that model to build new schools.

But she said officials in other school districts are interested in the approach. “There’s lots of different challenges that are happening in schools and opportunities to address them by looking outside the box, using alternative delivery and different procurement methods,” she said.

Often, government agencies look at public-private partnerships for revenue-generating infrastructure, like toll roads, parking meters, airports or transit lines. But governments can structure the deals differently so that they pay contractors “availability payments” from their regular budget, rather than from a new revenue stream, she said. For example, the Prince George’s County schools are paying the consortium that built the six schools $28.6 million in the first year, with yearly adjustments for inflation.

The results of the fast-track approach were on display in Maryland earlier this month, when Washington and other local officials cut ribbons for all six schools in a single week.

In Hyattsville, just outside of Washington, D.C., they gathered in a gym and laughed as dressed-up eighth graders in a string ensemble performed a piece inspired by zombies from outer space. Later in the ceremony, another student played piano, emphasizing the creative and performing arts focus of the school.

The new four-story building includes music, band and dance rooms, along with a media center and a black box theater. There are “outdoor classrooms” with wi-fi and power outlets to enable students to explore native plants and other environmental features. The building is designed to maximize the use of natural light in classrooms, accommodate solar power and electric vehicle chargers by next year, and use filters and ultraviolet light to prevent the spread of viruses. All classrooms are above the ground floor, and the school has wide halls, security cameras and other features to increase security for students in case of an active shooter.

Washington said the six new schools had similar designs, although some modifications were made, for example, for one facility that handles children from kindergarten through eighth grade.

He said the arrangement would ensure that the schools would continue to be in good shape for the next 30 years. The contractors have to meet 48 key performance indicators each month, with timeframes fix any problems and penalties for failing to do so spelled out in the contract. For example, the contractors have to remove all graffiti, repaint all walls every two years and replace turf fields every seven years. Plus, the contractors have to replace every major mechanical and electrical system in the building at least once over the 30-year course of the contracts. When the contract is over, he explained, “we won’t be getting back a dinosaur that immediately needs to be replaced.”

The construction also gave Prince George’s County Public Schools a chance to promote minority-owned businesses. A third of the spending, or $134 million, went to minority business enterprises, which was above the contract’s minimum threshold. Nearly two-thirds of Prince George’s County residents are Black, and more than a fifth are Hispanic.

School district officials were so satisfied with the approach that they’re planning a second stage. Instead of six schools, the next contract  will mandate that eight be built. It will increase the thresholds for minority business participation, and include a requirement that 40% of workers on the project are local.

The second phase would also include a “community investment program” to allow community members and businesses to buy into the deal in an attempt to help local residents build wealth. The program could make up as much as 10% of the deal.

“That came from our belief in doing what we can to democratize the investment,” Washington said. “The biggest complaint that folks have on P3s is that these ‘big bad developers’ come in and make all the money, fleecing the community, and we get no return on that investment. We believe that, if county taxpayer dollars are paying for this, they should also benefit on the upside of this project.”

Washington said it will take the district up to two years to figure out how to structure that component of the deal, as it explores questions like what the minimum buy-in should be for local residents.

But many residents and officials who were initially skeptical of using public-private partnerships are now on board with the idea, and Washington hopes to keep pushing new ideas. “We are excited about trying new stuff from the baseline of what we know is successful,” he said.