The LSU Board of Supervisors is scheduled to vote Friday on an agreement with the LSU Real Estate and Facilities Foundation that would give the REFF authority to select and recommend a private vendor to upgrade the aging utilities and energy systems infrastructure on the main campus.
If approved by the board, the agreement will set in motion a procurement process that strives to be open and transparent, and is designed to attract some of the most experienced players in the district energy sector. That process, according to a draft of the agreement, requires the REFF to conduct an extensive vetting process that will include two rounds of procurement and will be overseen by a committee comprising multiple stakeholder groups.
For more than a year, LSU has been studying how best to structure a public-private partnership to upgrade its outdated and inefficient energy system, and the prospective P3—which is expected to be worth tens of millions of dollars over many years—has, not surprisingly, generated a lot of interest in industry circles and controversy in political ones.
Among the groups interested in doing the deal is a joint venture owned, in part, by local private equity firm Bernhard Capital Partners. The venture, Louisiana Energy Partners, submitted a proposal, outside of a formal procurement process, to LSU earlier this year, shortly after LSU’s consultant recommended opening the process to bidders around the country.
Bernhard Capital was founded and is largely owned by Jim Bernhard, one of the most powerful Democratic businessmen in the state, who was nominated to the LSU board earlier this summer by Gov. John Bel Edwards, a Democrat. Bernhard did not accept the nomination, after initially saying he would, because of potential conflicts of interest with companies he owns that do business with LSU.
While the LAEP proposal is still floating around LSU, opening the procurement process to other bidders will make the deal more competitive.
Meanwhile, it’s unclear whether LSU board member Jay Blossman, who has close ties to Bernhard Capital, will recuse himself from Friday’s vote.
Blossman is a director of Bernhard Capital by virtue of his position as a paid board member of a separate, majority Bernhard-owned company, Charah Solutions.
Blossman has served on the Charah board since June 2018 but did not disclose his position to LSU, as required by law, until early August, days before the board was originally set to vote on the REFF agreement.
The item was pulled from the August board meeting agenda.
Blossman has declined to comment. LSU officials have downplayed any conflict of interest, noting that Charah Solutions is not seeking to do business with LSU and that Friday’s vote is only to formalize an agreement with its affiliate, the LSU REFF, not to engage in a contract with Bernhard’s group or any other potential vendor.
“Friday’s board is just to approve the REFF item,” LSU spokesman Ernie Ballard says. “There’s nothing concerning the potential company proposal.”