ALAMEDA, Calif. — California officials announced this week that they have signed an agreement for construction of the first state courthouse financed through a public-private partnership.

The deal calls for a consortium led by Paris-based Meridiam Infrastructure to build a new courthouse in Long Beach. The Long Beach Judicial Partners consortium will finance, design, build, operate, and maintain new courthouse facility.

After taking possession of the building, the state government will make availability payments for 35 years, which are designed to cover capital costs, as well as ongoing operations and maintenance.

The annual $52 million service payments are subject to appropriation, and are also performance-based — meaning the state pays less if court space or functionality falls below agreed specifications.

"We've worked hard with the project company to structure this unique arrangement so that it will achieve long-term value for the state," William Vickrey, California's administrative director of the courts, said in a statement Monday.

The Administrative Office of the Courts selected Meridiam as its preferred partner in June from among three finalists winnowed from the responses to its original request for proposals.

Monday's announcement signals that the state has signed off on the deal, and that the project consortium has closed its financing.

That means construction should begin in 2011, with the new courthouse ready for occupancy by the fall of 2013. It will replace a 51-year-old building state officials describe as dilapidated, too small, and beset with issues related to security and accessibility.

The Long Beach city government provided the six-acre property for the new courthouse, plus a financial contribution. In return, it will receive title to the existing courthouse after it is vacated.

California has embarked on a multi-billion dollar courthouse modernization program, but it is primarily financed with traditional municipal bond financing. Gov. Arnold Schwarzenegger, an ardent P3 advocate, led the charge to have the Administrative Office of the Courts use the Long Beach court as a P3 pilot. The project structure is unique.

"As the building is constructed, commissioned, and occupied, the AOC will distill best practices from this process that could be applied to similar future projects, not only within the judicial branch, but also by other state entities," Vickrey said.

The project company is fronting about $49 million of the projected cost, which is estimated at about $490 million, according to the AOC. The balance will be secured through loans from a consortium of six banks.

"We are very excited to have been chosen for this project," said Stuart Marks, project director for Long Beach Judicial Partners. "We believe that it's at the forefront of a new wave of infrastructure delivery."

The Administrative Office of the Courts retained Ernst & Young Advisory, Inc. as financial adviser and Hawkins, Delafield & Wood LLP as outside legal counsel.

The partners' financial advisers include KPMG and BNP Paribas, and Fulbright & Jaworski, LLP, provides legal counsel.

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