Lease-Leaseback Construction
From May 2006
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Next Stop, Roseville
Roseville Joint Union High School District could be the next local district to use a lease-leaseback arrangement after skyrocketing construction costs pushed the estimate for Antelope High School from $50 million to a staggering $84 million. Chris Grimes, district director of facilities development, says the district is likely to opt for a lease-leaseback contract to avoid further price increases and delays while some of the more expensive components of the campus are redesigned.
“Without lease-leaseback, we’d have to reject all bids after a redesign,” says Grimes. “Lease-leaseback is like rebuilding an engine while the airplane is in flight.”
Many districts are facing similar pressures to produce new facilities and the big-needs-small-budget syndrome is increasingly pushing them toward creative financing options. Couple that pattern with the growing track record of successful lease-leaseback projects, and the stage is set for a new public-private trend in school construction.
There’s no question lease-leaseback gets the job done efficiently, but many districts are also pleased to find the private-delivery method builds a more inspired product. Lease-leaseback projects often boast new technologies and cutting-edge designs atypical of public-school facilities. Clark & Sullivan’s Cowan attributes that quality to the flexibility lease-leaseback agreements afford contractors in terms of schedule, design and subcontractor procurement.
“Lease-leaseback gives tremendous flexibility to join with the school district, architect and trade partners to find the best way to build the facility,” he says.
It’s that freedom that drives innovation, says Cowan. On lease-leaseback projects, Clark & Sullivan invites trade contractors to submit new construction ideas with their pricing proposals. The open communication promotes out-of-the box thinking and gives school districts access to best practices at the trade level. “With each lease-leaseback project, we get about 75 to 100 new ideas from our trade contractors,” Cowan notes. “We’re often able to implement these ideas and save money.”
But, as with many public-private partnerships, the devil is in the details. Some advocacy and trade groups are concerned lease-leaseback agreements bypass the competitive bidding requirement for public-works projects.
Continued...
Roseville Joint Union High School District could be the next local district to use a lease-leaseback arrangement after skyrocketing construction costs pushed the estimate for Antelope High School from $50 million to a staggering $84 million. Chris Grimes, district director of facilities development, says the district is likely to opt for a lease-leaseback contract to avoid further price increases and delays while some of the more expensive components of the campus are redesigned.
“Without lease-leaseback, we’d have to reject all bids after a redesign,” says Grimes. “Lease-leaseback is like rebuilding an engine while the airplane is in flight.”
Many districts are facing similar pressures to produce new facilities and the big-needs-small-budget syndrome is increasingly pushing them toward creative financing options. Couple that pattern with the growing track record of successful lease-leaseback projects, and the stage is set for a new public-private trend in school construction.
There’s no question lease-leaseback gets the job done efficiently, but many districts are also pleased to find the private-delivery method builds a more inspired product. Lease-leaseback projects often boast new technologies and cutting-edge designs atypical of public-school facilities. Clark & Sullivan’s Cowan attributes that quality to the flexibility lease-leaseback agreements afford contractors in terms of schedule, design and subcontractor procurement.
“Lease-leaseback gives tremendous flexibility to join with the school district, architect and trade partners to find the best way to build the facility,” he says.
It’s that freedom that drives innovation, says Cowan. On lease-leaseback projects, Clark & Sullivan invites trade contractors to submit new construction ideas with their pricing proposals. The open communication promotes out-of-the box thinking and gives school districts access to best practices at the trade level. “With each lease-leaseback project, we get about 75 to 100 new ideas from our trade contractors,” Cowan notes. “We’re often able to implement these ideas and save money.”
But, as with many public-private partnerships, the devil is in the details. Some advocacy and trade groups are concerned lease-leaseback agreements bypass the competitive bidding requirement for public-works projects.
Continued...
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