Decision on Yonkers school project moves closer

Yonkers, New York is examining if a PPP might be the way to fix its ageing school system infrastructure. A decision could be made by mid-summer.

A decision on whether to embark on what would amount to a landmark social infrastructure project for the US, involving the school district of Yonkers, New York, could come as early as mid-summer.

The city school system in April picked law firm Freshfields Bruckhaus Deringer, Macquarie Capital and URS Corporation from a November request for proposal (RFP) to evaluate if a public-private partnership (PPP) could redress its ageing campus infrastructure.

Freshfields is conducting a legal analysis to determine if the “existing statutory authority” for the city can enable funding a PPP procurement process, while Australia-headquartered Macquarie and URS Corporation are running a value-for-money breakdown.

URS is a publicly traded San Francisco-headquartered construction, design and engineering firm and a federal government contractor.

Yonkers has sought to obtain $700 million in financing, and envisioned a design, build and maintain contract for its 40-school district. A recent evaluation identified a total $1.7 billion in renovation was needed for school property.

A PPP would require use of the availability payment structure, or APS, because a school system is not a revenue-generating asset.

Unlike Canada or the UK, the US has never used private capital to finance education-related infrastructure.

In the US, the Long Beach Courthouse project in Los Angeles, awarded to a consortium led by Meridiam Infrastructure, is the most prominent example of a social infrastructure PPP in the US to date.

In light of that, the prospective Yonkers school system project is a closely watched development in the asset class, acknowledged New York-based Freshfields partner Kent Rowey.

“The project is very doable,” he said.