Tag Archive for financing for municipalities

Build a Challenging Municipal Courthouse for Your City

City Court of Atlanta

Lenwood A. Jackson, Sr. Justice Center

Garfield Traub Courthouse Case Study

The Need: Build a new, secure municipal courthouse to meet the needs of the city for the future.

The Challenge: Mayor unable to place the request for new bonds for a new courthouse before the voters for a period of 4 years due to other established priorities.  Solve the problem of having to wait for the public referendum so that the courthouse development could proceed on a much earlier schedule.  Utilize a design-build and best value selection to ensure a predictable good result in the on-time, on-budget delivery of the new courthouse.

The Risk: Judges residing in a 46 year old, overcrowded and unsafe environment, exposing themselves, staff and citizens to possible injury and harm.  Time was of the essence.  Waiting 4 extra years would expose the city to significant inflation on the budget.

The Opportunity: To work with city staff, judges and courthouse staff in planning a modern and safe facility, connected to the new jail and resolving the financing dilemma.  The door was opened to city introductions by the contracting firm already building the new jail.

The Solutions:  

  1. Financing – Recommending the use of excess city revenues coming from “fines and forfeitures” revenue as a source for amortizing new bonds sold to design and build the new courthouse.  This historic revenue source had a history of generating $25 million per year, 5 times the amount needed to amortize the $60 million price tag for the new courthouse, therefore ensuring the ability to gain Investment Grade Ratings for the new bonds without a needed referendum approving the sale of General Obligation Bonds.
  2. Delivery – By avoiding the necessity to award a referendum approved bond offering in the prescribed design-bid-build method to the “lowest bidder”, and suffering the exposure to the poor results endemic in such a process, the city was able to compete and award the assignment to the design-build team deemed best qualified with the best value option for the city.
Atlanta Courthouse Court Room

Lenwood A. Jackson, Sr. Justice Center Court Room

The Result:  The new 208,000 square-foot, six-story Municipal Courthouse of Atlanta, now known as the Lenwood A. Jackson Justice Center, replaced the 46-year old, 46,000-square-foot building that ran out of space a decade prior to this new project.  The new City Court was designed to fulfill all the City’s space requirements for 25 years.  Garfield Traub’s innovative, low-cost, tax-exempt financing solution, utilizing a 25 year AAA Rated Certificate of Participation and backed by an Atlanta 25 year Annual Appropriation Lease commitment to be appropriated from the city’s “fines and forfeitures” revenues,  did not require the City’s general obligation and taxing authority.  As a result, the development was able to proceed without the need for a public referendum.  Ground breaking was achieved by a “fast track” process within nine months from project award.  The facility was delivered under a design-build agreement, a month ahead of schedule and approximately $1 million under budget, five years sooner than it could have been completed under the traditional procurement process.  This facility was designed to deliver up to 15 courtrooms, administrative offices, conference spaces, secure parking for the judges, an underground sally port to the new city jail, secure access controls and separate circulation for inmates, judges and the public.

To find out how your City can successfully build a courthouse to meet your City’s needs contact Garfield Traub.

EB-5 Program – Creating Foreign Investment With Visas

In the interest of fair and balanced reporting, we thought this April 15, 2012 New York Times article by Ann Lee of Demos on “Visas-for-Dollars” is deserving of everyone’s attention.  As our firm intends to be in the market later this year and into next year raising EB-5 funds for a portion of the financing of a new hotel and conference center for a California city, we want to do what we can to draw attention to the need for transparency in all transactions.

Making Visas-for-Dollars Work

By ANN LEE as posted in The New York Times
Published: April 15, 2012

EB-5 Program Creating VisasAMONG the most popular tools for attracting foreign investment to the United States is the EB-5 program. It seems like the perfect win-win: any foreigner who invests between $500,000 and $1 million here, and creates at least 10 domestic jobs from that investment within two years, gets a green card.

Given how many high-worth investors are clamoring to enter the United States, the EB-5 program could have a significant effect on American unemployment. Indeed, it has brought in some $1 billion over the last fiscal year, and the President’s Council on Jobs and Competitiveness has called for the EB-5 program to be “radically” expanded over the next few years.

Unfortunately, the program is so rife with fraud and corruption that it could actually have the opposite impact and deter investment. To regain its credibility, the program must make a number of changes to enable more transparency and demand more competence from its operators.

The most egregious problems with the EB-5 program can be found in its 218 regional centers, which work with private-sector brokers to identify local investments and direct foreign participants to them. Examples abound of centers and brokers playing down risky investments and misrepresenting how the program works, including a promise that EB-5 investments are guaranteed by the federal government — when the government in fact does nothing of the sort. Many investments have failed to create the required 10 jobs and even gone bankrupt, leaving the investor without his money or his green card.

While many EB-5 regional centers have solid records, a disturbing number have directed investor money to risky projects and companies that pay little to no return, overseen by brokers who get a commission regardless of how the investment plays out.

Aside from accusations of outright fraud, there is also a clear lack of understanding among government administrators about how to manage an investment program. As a result, they often approve businesses that are simple to understand, like a condo development or a grocery store, but whose business models don’t generate enough profit to hire workers, while rejecting more sophisticated businesses that stand a greater potential of generating profits and jobs.

For the time being, these problems haven’t turned the tide of interest in the EB-5 program. But that could change: recent high-profile investigations by Reuters and Businessweek, as well as a warning against fraudulent brokers by the Chinese Supreme People’s Court, could start having a significant deterrent effect, especially since other countries, like Canada, are following America’s lead with their own versions of the program.

Fortunately, the solutions are straightforward. The federal government needs to rein in freewheeling brokers with heavier penalties for misrepresenting investments, hire more business-savvy administrators and make the entire process more transparent, so that applicants know why their money was accepted or rejected.

The EB-5 program has a lot of promise to reduce unemployment, and the White House is right to call for its expansion. Rather than end it, let’s fix it.

Ann Lee is a senior fellow at Demos and the author of “What the U.S. Can Learn From China.”

If you would like to see how Garfield Traub Development can help you get your essential developments financed with the EB-5 program, please contact us.

  • Veteran Owned Business Directory, Get your free listing, now!