Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the University Infrastructure P3 topic
No spam. Unsubscribe anytime.
University of Kentucky P3 for central utility plant approved; medical‑school lease renewed
Summary
A legislative committee approved a $600 million University of Kentucky public–private partnership to expand central utility plants and infrastructure and separately approved a 20,000 sq ft lease for the College of Medicine annex at $38 per sq ft ($912,000/year).
The committee approved a public–private partnership (P3) that expands the University of Kentucky’s central utility plants and utility infrastructure to support the Chandler expansion and related medical and research facilities.
Elizabeth Baker, speaking for the university, told the committee the project would increase the P3 scope to $600 million by transferring $200 million of previously authorized restricted funds into the P3 and would build a new central utility plant, modernize existing plants and provide redundant capacity to keep medical facilities operational 24/7. “This project…is critical for the commonwealth and it is critical for the university,” Baker said.
Baker described the P3 as a design‑build‑finance‑operate‑maintain arrangement with a private partner (Kentucky Infrastructure Partners). The project will be financed via partner equity (approximately 9%) and debt issued through a nonprofit entity; UK and the Commonwealth will have no upfront payments or new Commonwealth debt. Upon substantial completion, the university will make semiannual availability payments and annual payments tied to performance standards.
Committee members asked about the size and source of long‑term availability payments; the committee was told those payments will be made from UK HealthCare revenues and agency funds rather than from Commonwealth general obligation debt.
After questions from members about efficiency and whether aging units would be replaced, the committee approved the P3 agreement in a roll call vote.
Separately under the same agenda, Elizabeth Baker presented a lease renewal for a 20,000‑square‑foot College of Medicine facility adjacent to Bowling Green Medical Center. The lease is $38 per square foot for an annual cost of $912,000. Baker said the leased space supports medical student training; UK reported past class sizes and outlined plans to grow the incoming class and expand to a 160‑student capacity over several years.
Committee members praised the partnership and the detailed due diligence the university provided. The committee approved the lease renewal in a roll call vote.
The committee did not set implementation dates in the hearing; the P3 presentation described a three‑year construction timeline and a 30‑year operation and maintenance term for the central utility plant.
