(Yonkers, New York) Yonkers Public Schools’ Public-Private Partnership (P3) is among the world’s 100 most innovative urban infrastructure projects, announced today by KPMG at the World Cities Summit in Singapore. KPMG Global Infrastructure practice, in conjunction with Infrastructure Journal, published the top programs in the 2012 Infrastructure 100: World Cities Edition. A distinguished group of industry judges selected the projects based on their scale, feasibility, complexity, innovation and impact on society. KPMG’s press release announcing the top programs worldwide summarized Yonkers’ selection:
The Yonkers, New York Schools PPP – described as “gutsy” by one of the North American judges – is the first social infrastructure PPP for a public school district in the United States. It will involve the upgrade of 38 schools for the Yonkers Public School District. The US $1.7 billion project is truly unique in the United States, and if implemented correctly could be a real pathfinder for American education in an era of increasingly constrained public finances.
“We are in the business of educating children, not managing facilities,” said Superintendent of Yonkers Public Schools Bernard P. Pierorazio. “The P3 allows us to transfer the responsibility of building management to the private sector, who can do it more efficiently and, frankly, more effectively. In turn, we can concentrate on what we do best – preparing students to achieve.”
Yonkers Public Schools Public-Private Partnership
Despite receiving high marks for school quality and program initiatives, Yonkers school buildings have fallen into a state of critical disrepair. The District’s buildings are the oldest in New York State; the average age is 73 years old, nine are over 95 and the oldest is 117. Ninety five percent of the buildings are deemed “unsatisfactory” by the State, and the majority were built to educational standards of a previous era – they are dark, poorly ventilated and uniformly too small. Exacerbating the problem is Yonkers’ growing enrollment, currently over 25,000 students. Presently 4,000 seats short, the District is projected to grow by an additional 3,000 students within the next ten years, totaling a 7,000-seat shortfall.
While maintaining and rebuilding its infrastructure has been a priority, budgetary and bonding constraints have forced the District to apply emergency fixes rather than address long-term sustainability.
The P3 is dedicated to the development and maintenance of the District’s capital assets using a design-build-finance-maintain model. Availability payments provide a strong motivation for the private partner to make the renovations and ongoing updates necessary to deter emergency situations and provide for innovative advancements.
“The P3 model is a viable solution to the ongoing financial constraints that have limited our ability to provide our students with the modern, well-maintained learning environments they deserve,” said Yonkers Board of Education President Paresh Patel. “We have outlined a three-phase, 15-year Educational Facilities Plan to refurbish our schools, and the P3 is critical to its success.”
As the fourth largest school district in New York, Yonkers provides a unique opportunity for private funds looking for long-term investments. Furthermore, as currently planned, Phase I of the District’s $1.7 billion Educational Facilities Plan will create 13,000 jobs.
In March, Yonkers Public Schools completed the initial step of the P3 project, selecting the team of Macquarie Capital, Freshfields Bruckhaus Deringer LLP, and URS Corporation as financial, legal, and technical advisors. The team is highly experienced in US P3 transactions and has been involved in every major US P3 transaction with similar financing to Yonkers’ project. The advisors will use their extensive expertise to assess the feasibility of Yonkers’ plan.
Superintendent Pierorazio said that he is optimistic that the P3 project will provide a practical solution to the District’s capital improvement needs. “Only in this way can education continue to command the absolute full attention of our community,” said the Superintendent. “For as education goes, so does the city of Yonkers.”