Tutor Perini-O&G JV Announces Pending Contract for the $3.76 Billion New York City Borough-Based Jail System, Manhattan Facility

Rhea-AI Summary

Tutor Perini (NYSE: TPC) and its joint venture partner O&G are finalizing a contract for the Manhattan Jail Project in New York, valued at $3.76 billion. The project, part of New York City's Borough-Based Jail System, has a duration of 7 years and 3 months.

The scope includes designing and constructing a state-of-the-art facility featuring 1,040 beds, 125 below-grade parking spaces, and 20,000 square feet of community and commercial space. The facility will include dedicated areas for on-site services, programming, recreation, food services, and staff facilities.

Tutor Perini is the managing partner in the joint venture, with O&G holding a 25% stake. HOK serves as the design partner. The contract value has been added to Tutor Perini's backlog in Q4 2024.

Positive

• Secured major contract worth $3.76 billion
• Project adds significant value to Q4 2024 backlog
• Long-term revenue visibility with 7+ year project duration
• Company maintains controlling interest (75%) in joint venture

Negative

• Extended project timeline may expose to cost inflation risks
• Large project concentration risk in single contract

Insights

Construction Industry Financial Analyst

The pending $3.76 billion Manhattan Jail Project contract represents a transformative opportunity for Tutor Perini, with several key implications for investors:

Financial Impact & Scale: The contract value is approximately 3x TPC's current market capitalization of $1.2 billion, making this a company-defining project. With a 75% controlling interest in the joint venture, TPC's share amounts to roughly $2.82 billion, translating to an average annual revenue contribution of approximately $390 million over the 7.25-year duration.

Strategic Advantages: The project's structure offers multiple benefits:

• The design-build format with HOK, a renowned architectural firm, typically allows for better margin control and reduced change-order risks
• The 25% partnership with O&G provides risk sharing while maintaining operational control
• The long duration offers exceptional revenue visibility through 2032, providing a stable foundation for future growth
• The prestigious nature of the project enhances TPC's credentials for future large-scale public infrastructure bids

Operational Considerations: The project's complexity requires careful analysis:

• Working capital requirements will be substantial, though public sector projects typically offer reliable payment terms
• The below-grade construction and urban location present execution challenges that could impact margins
• Labor availability in NYC's competitive construction market will be important for successful delivery
• The community space component adds complexity but demonstrates expertise in mixed-use facilities

This contract positions TPC as a major player in NYC's infrastructure development, potentially leading to additional opportunities in the region's ongoing infrastructure modernization initiatives. The project's scale and complexity align with TPC's core competencies in large-scale public works, while the joint venture structure effectively balances risk and reward.

LOS ANGELES--(BUSINESS WIRE)-- Tutor Perini Corporation (NYSE: TPC) (the “Company”), a leading civil, building and specialty construction company, announced today that the Tutor Perini-O&G Joint Venture is in the process of executing contract documents for the previously announced Manhattan Jail Project in New York. The City of New York recently held a public hearing regarding the proposed contract for this project between the New York City Department of Design and Construction and the Tutor Perini-O&G JV. The anticipated contract amount is $3,764,251,168. The contract term is expected to be 2,646 consecutive calendar days (seven years and three months) until final completion.

The project scope includes design and construction of a new state-of-the-art facility that will have dedicated space for on-site services and programming, indoor and outdoor recreation, food services, staff offices and facilities, amenities, below-grade accessory parking, and a secured entry. The new facility will contain 1,040 beds and provide 125 accessory parking spaces below grade for all staff and service providers. In addition, the facility will provide 20,000 square feet of community and commercial space on the ground floor.

Tutor Perini is the managing partner in the joint venture with O&G serving as a 25% partner. The joint venture’s design partner is HOK.

The contract value was added to the Company’s backlog in the fourth quarter of 2024.

About Tutor Perini Corporation

Tutor Perini Corporation is a leading civil, building and specialty construction company offering diversified general contracting and design-build services to private customers and public agencies throughout the world. We have provided construction services since 1894 and have established a strong reputation within our markets by executing large, complex projects on time and within budget, while adhering to strict quality control measures. We offer general contracting, pre-construction planning and comprehensive project management services, including planning and scheduling of manpower, equipment, materials and subcontractors required for a project. We also offer self-performed construction services including site work, concrete forming and placement, steel erection, electrical, mechanical, plumbing and heating, ventilation and air conditioning (HVAC).

View source version on businesswire.com: https://www.businesswire.com/news/home/20250219487195/en/

Tutor Perini Corporation

Jorge Casado, 818-362-8391

Vice President, Investor Relations and Corporate Communications

www.tutorperini.com

Source: Tutor Perini Corporation

FAQ

What is the value of TPC's Manhattan Jail Project contract?

The Manhattan Jail Project contract is valued at $3,764,251,168 ($3.76 billion).

How long will it take TPC to complete the Manhattan Jail Project?

The project duration is 2,646 consecutive calendar days, equivalent to seven years and three months until final completion.

What is TPC's ownership stake in the Manhattan Jail Project joint venture?

Tutor Perini is the managing partner with a 75% stake, while O&G holds a 25% stake in the joint venture.

What is the bed capacity of TPC's new Manhattan jail facility?

The new Manhattan jail facility will contain 1,040 beds.

When was the Manhattan Jail Project added to TPC's backlog?

The contract value was added to Tutor Perini's backlog in the fourth quarter of 2024.