October 21, 2019

October 18, 2019

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Creativity in Funding Necessary for Miami-Dade Civil Courthouse P3 Success

As Miami-Dade County continues to take steps towards the launch of a proposed civil courthouse public-private partnership (P3), its representatives have stressed the need to bring the right deal to market, balancing the community’s goals of improved court capacity and accessibility with existing funding challenges.  The final project could combine an availability model DBFOM with real estate development, which would create a unique opportunity for international equity investors and construction companies to partner with real estate developers familiar with the Miami market.

The population of Miami-Dade County today is twenty-five times greater than it was when the County planned its existing courthouse facility in 1925.  To facilitate the increased judicial demand that comes with population growth, courthouse services have since been spread across the County.  The County has long recognized the need to improve its existing judicial infrastructure.  In 2014, the County sought to fund construction of a new courthouse through the issuance of general obligation bonds.  However, the bond financing was not favored by voters.  While the County continues to leave open the possibility of a different delivery model, the P3 model now appears to be the preferred approach to the courthouse project.

The County has identified approximately $50 million in currently available capital funds that could be applied towards the project.  In addition, the costs of operating the existing County courthouse are approximately $3 million per year, which the County has indicated may be applied towards availability payments. The County may also make available certain valuable real estate properties to a private developer in the form of a long-term lease or other partnership as partial consideration for the development and operation of the project.

If the County does proceed with a P3 that combines the courthouse with a real estate development, the request for proposals will pose unique opportunities and challenges on both the equity and financing front.  As the financial model with respect to the courthouse would contemplate a combination of availability payments from the County and revenues generated from the private real estate development, equity participants and lenders will need to assess risk with respect to both the courthouse and the real estate development.  This will raise unique issues with respect to the risk allocation between the County and private participants, and the equity and financing documents will need to be structured accordingly.

© 2019 Bilzin Sumberg Baena Price & Axelrod LLP

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About this Author

Albert Dotson, Bilzin Sumberg Law Firm, Real Estate and Land Development Attorney
Partner

Nationally recognized for his work on public-private partnerships (P3), Al's experience includes rail and transit facilities, airports, marinas, sports stadiums, convention centers, healthcare/life sciences facilities, educational institutions, water and sewer facilities, and parking structures.

Al is recognized throughout Florida for his work representing local, national, and international clients in responding to government contract solicitations and defending against, or prosecuting quasi-judicial and judicial bid protests.

305-350-2411
Associate

Andrej Micovic is an Associate in Bilzin Sumberg's Land Development & Government Relations Group. He focuses his practice in the areas of government procurement and complex government transactions, including public-private partnership (P3) finance and general project finance. Andrej has substantial experience in the development, procurement, financing, construction, and purchase and sale of infrastructure and energy projects, in the United States and throughout Latin America, representing sponsors, issuers, borrowers, underwriters, lenders, purchasers, and sellers.

Andrej's Practices

  • Public-Private Partnerships
  • Government Contracting
  • Land Use & Zoning
  • Real Estate Development & Construction
  • Finance
  • Real Estate Finance
  • Commercial Finance
  • Corporate
  • International

Credentials

Cornell University, J.D., 2010

University of Miami, B.B.A., Economics and Legal Studies, 2007

305-350-2361
Associate

Eric Singer is an Associate in the Government Relations & Land Development Group. His practice focuses on government procurement contracts and the development approval process, including planning and zoning applications, government approvals and permits. Eric also represents clients in quasi-judicial matters and has handled land use cases in state and federal courts at the trial and appellate levels.

305-350-2354