Oklahoma County explores P3 for stalled jail project

Oklahoma County is exploring a public-private partnership to help finance a replacement for its troubled jail amid rising costs and a delay in securing a site for the project.

Raymond James, Morgan Stanley (MS), and Jefferies responded to a request for proposals, which listed two lease-purchase financing options ? $450 million for the jail in its entirety or $41 million for the jail's mechanical and electrical equipment. The terms called for an up to 30-year commitment and the issuance of tax-exempt and taxable fixed-rate bonds backed by the county's annual appropriation of lease rental payments.

Proceeds from the P3 would supplement $260 million of general obligation bonds county voters approved in June 2022 to fund a new jail.

Oklahoma's largest county, which has a population of about 800,000, sold $45 million of the authorized debt in 2023 in a deal structured with serial maturities between 2025 and 2033.

Since then, costs have climbed. The county is eying a jail that would accommodate 2,400 inmates and include four courtrooms with an estimated cost of $672 million, according to County Engineer Stacey Trumbo. He said an anticipated Dec. 31 closing date cited in the RFP has been moved to the spring.

The county aims to replace its 13-story detention center in downtown Oklahoma City ? which opened in 1991 and has been under state and federal scrutiny for health, safety, and other concerns ? with a facility that would have room for medical and mental health treatment.

Earlier this year, commissioners opted to move forward with a mental health facility funded with $50 million in expiring American Rescue Plan Act money.

While the responses to the RFP are under review, a court battle over a jail site continues.

The county commission sued Oklahoma City in June over its denial of a special use permit for a site on the city's outskirts, asking an Oklahoma County District Court judge to prohibit the city from enforcing any zoning ordinance or permit denial that would prohibit the jail project.

The lawsuit claims such permits are not applicable to the county as "the superior sovereign." In September, Judge Douglas Drummond rejected the city's motion to dismiss the case.

In October, Moody's Ratings confirmed the county's Aa1 issuer and GO limited tax ratings, which had been put under review in June for a lack of sufficient information.