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ADOA Looks into P3s for Capitol Mall Projects

Courtesy of Arizona Department of Administration

By Roland Murphy for Arizona Builder’s Exchange

As was foreshadowed by Gina DeCotiis, Arizona Department of Administration Procurement Supervisor, at the AZBEX Public Works Conference last month, ADOA is looking to get creative in how it manages and refurbishes its properties on the Capitol Mall.

DeCotiis said at the time the department has more than $400M in total projects that are aged and facing severe deficits for structural and deferred maintenance.

Last month the department issued an RFI to look at firms that might be interested in a public-private-partnership to do just that.

In the RFI’s introduction section, the department says, “This is a unique opportunity to contribute in the transformation of the State Capitol, in Phoenix, Arizona. Each week day, thousands of state government employees swell the Capitol population, providing additional opportunities for local establishments. The State seeks to obtain information, on a preliminary basis, to assess feasibility and interest from public-private-partners, or other possible financial transaction structures, to design, finance, construct, operate, and maintain (or any subset of those roles), one or more Capitol Mall revitalization projects for the co-location of state agency employees. The State intends to co-locate, within the Project area, several State Agencies housed throughout Phoenix.”

The department is keeping its options open. The RFI lists eight possible transaction structures common to the P3 process, covering the gamut from Finance Only all the way out to Build-Own-Operate, and everything in between. It then adds it’s willing to consider other structures that may fall outside the traditional approaches.

Project Scope and Goals

ADOA listed 14 items it anticipates needing from a development partner for the program, but added there could be more. Among the services it expects to require are:

  • Existing structure demolition
  • Class A interior finishes
  • Collaborative space
  • Utilities relocation, and
  • Design to LEED Silver Standard

The document says this is to be a 100 percent turnkey project and that the state is interested in exploring more mixed-use projects in the complex that will generate more revenue. “The long-term goal for the Capitol Mall is a higher density, mixed-use approach that can be a catalyst to the surrounding area, stimulate economic activity, and enhance the Capitol Mall Complex. This initial project may or may not include a mixed-use component.”

The request includes two basic scenarios. In the first, one or more State office buildings would be created to co-locate employees from both State-owned and privately leased space. At least four different State business units would be included. The State would offer a long-term ground lease for the land, and the development proposal would include construction, operation and maintenance. A variation on the scenario includes the possibility of adding a mixed-use space on the first floor.

In the second scenario, one office building would be constructed at 1739 W. Jackson to handle co-location of 17 different State business units. Terms under this arrangement are the same regarding the ground lease and the construction, operation and maintenance expectations. This scenario also includes a variation for a possible first-floor mixed-use space.

Speaking at last month’s conference, DeCotiis said, “As we continue to look for new ways to develop our infrastructure, we encourage everyone to look at the requests for information that are coming up and provide us with any thoughts you have that can help us attain that goal. We’re looking to replace more than eight structures on the Capitol Mall in the next five to seven years.”

It looks like the department is wasting no time in working toward that goal.

The RFI can be found here. All responses are due by Nov. 28.

NOTE: Paid subscribers receive additional project details in our twice-weekly PDF publication, including project stakeholder information and valuable project bidding leads. Find out more about AZBEX subscriptions or contact Rebekah Morris at rmorris@azbex.com or (480) 709-4190

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