The National Nuclear Security Administration's (NNSA) existing manufacturing plant in Kansas City, Missouri, is of Cold War vintage. Replacing it was a top priority for this separately organized agency within the U.S. Department of Energy. Ballard Spahr assisted CGA Capital Corporation and its affiliates in arranging financing for construction and long-term operation of a 1.5 million-square-foot manufacturing and research facility near the site of the outdated plant.
The highly structured financing totaled $687 million. The total cost of the complex, including design, construction, equipment, and payments on the 20-year credit-tenant lease, is estimated to be several billion dollars—one of the largest projects ever undertaken by the U.S. General Services Administration. Ballard Spahr attorneys oversaw the creation and negotiation of all loan documentation and had a major role in completing all lease and construction documents.
Our longtime client, CGA Capital of Timonium, Maryland, was the exclusive financial adviser and structuring agent for the complex, public-private venture and was the sole arranger of the private placement of bonds through an arrangement with a privately held securities firm.
"The Ballard Spahr team truly served as our partner over a multiyear period in virtually every element required to complete this extremely significant and complex net lease financing," said W. Kyle Gore, a Managing Director and Principal with CGA Capital. "We benefited greatly from our nearly 20-year relationship … which enabled us to close an incredibly unique transaction with major institutional investors on behalf of a major real estate development firm."
The five-building complex will serve as the NNSA's new national security campus and is expected to be fully occupied in 2014. It will be the primary producer of nonnuclear mechanical, electronic, and engineered materials for the U.S. nuclear weapons arsenal and other national security missions. The new campus is being developed using sustainable design principles, which will reduce environmental waste and maintenance and energy costs, resulting in a savings to the federal government of about $100 million annually.