Infra Insight Blog : written by Nossaman LLP Infrastructure attorneys, covers infrastructure project delivery, including Public-Private Partnerships, Operations & Management Agreements, policy, and news.

On May 17, 2013, the Texas Department of Transportation and AGL Constructors reached commercial close on the design-build and capital maintenance agreements for the I-35E Managed Lanes Project.  AGL Constructors is a joint venture comprised of Archer Western Contractors, LLC, Granite Construction Company and The LANE Construction Company. AGL Constructors was conditionally awarded the contract in December 2012, and was one of four teams the Texas Department of Transportation shortlisted for the project in early 2012.

The I-35E Managed Lanes Project is the first phase in a multi-phase program to relieve traffic congestion along an existing 28-mile corridor of I-35E in Dallas and Denton Counties. The scope of the $845 million design-build contract includes the design and construction of tolled managed lanes, general purpose lanes, collector-distributor roads and bridges. The scope of the capital maintenance agreement includes the optional long-term maintenance of the project’s managed lanes component.  The capital maintenance agreement consists of up to three optional five year terms.
 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The Indiana Finance Authority (IFA) and the Indiana Department of Transportation (INDOT) will hold the I-69 Section 5 Industry Forum on May 22, 2013.  Sign in will begin at 10:00 a.m. ET and the program will start promptly at 11:00 a.m. at the Government Center South Auditorium, 300 West Washington Street, Indianapolis, Indiana 46204.  Governor Mike Pence, INDOT Commissioner Michael Cline, Public Finance Director of the State of Indiana Kendra York, and INDOT Deputy Commissioner for Innovative Project Delivery Jim Stark are expected to address the attendees.  The presentations will cover the I-69 Section 5 project scope, objectives, procurement timeline, delivery model and Request for Qualifications.

The first 67 miles of the new 142-mile I-69 corridor opened in November 2012 and construction is now underway on all 27 miles of I-69 Section 4.  All highway design, construction and financing firms interested in participating in a design, build, finance, operate and maintain procurement for the Section 5 project are encouraged to attend the forum.

All interested attendees are encouraged to RSVP to Sydney Dudek at sldudek@kpmg.com by 5 p.m. ET on Friday, May 17, 2013.  Those unable to attend in person and wishing to participate virtually should contact Ms. Dudek to ensure registration.

For more information about I-69 between Evansville and Indianapolis, visit the project website.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

On May 8th, 2013, the Riverside County Transportation Commission (RCTC) approved a $632 million dollar design-build contract for the SR-91 Corridor Improvement Project.  The design-builder is a joint venture between Atkinson Contractors, LP and Walsh Construction Company.  URS is the team’s lead designer.

RCTC had previously pre-qualified 4 teams for the project and issued the RFP on July 26, 2012:  The 4 pre-qualified teams were:  Atkinson/Walsh, a joint venture; Flatiron/Skanska/Rados, a joint venture; Shimmick/Obayashi/FNF, a joint venture; and Kiewit Infrastructure West.

RCTC’s selection of the Atkinson/Walsh joint venture was the culmination of a best value procurement and evaluation of proposals received from the four prequalified proposers.  The best value selection criteria included the combination of a net present value price score and a technical proposal score as well as an adjustment to the price score based on completion schedule.  Atkinson/Walsh’s design and construction price is $140 million lower than RCTC’s engineer’s estimate.  In addition, all proposers proposed a schedule duration of 1218 days, 10 months earlier than the outside completion deadline set by RCTC.

The project is being developed under California’s Design-Build Demonstration Program authorized by legislation passed in 2009.  The project will widen State Route 91 with the addition of new freeway lanes, toll/express lanes extending the existing SR-91 express lanes into Riverside County, expanded freeway-to-freeway connectors and better access to and from the freeway at congested locations.  The toll lanes will connect to the existing SR-91 Express Lanes operated by Orange County Transportation Authority and provide drivers with a seamless tolled express lane from I-15 to SR-55.  RCTC is developing the project in cooperation with Caltrans.  Upon completion of the project, RCTC will operate and maintain the toll facilities for a period of 50 years.

The project will be financed through a combination of toll revenue bonds, sales tax bonds and an approximately $416 million dollar TIFIA loan from USDOT. 

Corey Boock co-authored this entry.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The U.S. Department of Transportation announced Monday that it is making $474 million in financing available through its transportation investments grant program pursuant to the Full-Year Continuing Appropriations Act, 2013 (Pub. L. 113-6, March 26, 2013).  The appropriation is similar to the appropriation for the “TIGER” program and USDOT will continue to refer to the program as ‘‘TIGER Discretionary Grants.’’ As with previous rounds of TIGER, funds for the FY 2013 TIGER program will be awarded on a competitive basis for projects that will have a significant impact on the Nation, a metropolitan area or a region.  

“President Obama has challenged us to make sure our nation’s transportation infrastructure is up to the job of attracting and supporting businesses and the families that rely on them," U.S. Transportation Secretary Ray LaHood said in a statement. “And because the Appropriations Act that funds TIGER requires that funds be obligated by October 1, 2014, this round of TIGER will be making a difference soon.”  To give USDOT enough time to obligate funds by the statutory deadline, a project must be ready to go by June 30, 2014.  

Grants will range from $10 million to $200 million to fund eligible projects, which include highways and bridges; public transit; passenger and freight rail; intermodal facilities; and marine and port investments.   According to the USDOT, at least $120 million of the $474 million must be awarded to projects in rural areas.

TIGER money can be used to fund up to 80% of a project’s total cost, though if a project can show that is has a significant amount of nonfederal funds included in its overall financing package, the project may have a competitive edge, the USDOT has said.

Recent projects that have benefitted from TIGER include the 3.3 mile M-1 Rail project in Detroit, which received $25 million, and the Port of Corpus Christi, Texas, which received a grant of $10 million to expand rail service at the port with a new rail yard.

This is the fifth round of financing being distributed under TIGER since the program was put in place by the American Recovery and Reinvestment Act of 2009.  Since its inception, demand for funding under the TIGER program has been significant.  According to the USDOT, in the first four rounds of the TIGER program, the USDOT received more than 4,050 project proposals seeking more than $105.2 billion.  While demand has been great, only approximately $3.9 billion in transportation project grants have been given out so far under the program.

Interested applicants can review the USDOT’s grant resources page and view the full Notice of Funding Availability.   Applications for grant money are due by June 3.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The Florida Department of Transportation (FDOT) announced on April 19, 2013 that it accepted Statements of Qualifications (SOQs) from seven proposers in response to a Request for Qualifications for the I-4 Ultimate Project.  The list of proposer teams may be found at the I-4 Ultimate Project website.

The project involves the reconstruction of over 21 miles of I-4 in Orange and Seminole Counties, including 19 major interchanges, 56 new bridges and 71 bridge replacements, and the addition of two managed toll lanes in each direction.  The estimated cost of the project is approximately $2.1 billion. 
 
The I-4 is often considered the backbone of surface transportation in Central Florida.  It provides a crucial link between Tampa on the west coast and Daytona Beach on the east coast, as well as serving the Orlando Metro area, one of the world's most popular travel destinations.  The I-4 Ultimate Project seeks to alleviate congestion by adding managed lanes and improving access to and from the interstate. 
 
The project is being procured as a public-private partnership, through an anticipated 40-year design, build, finance, operate and maintain (DBFOM) concession agreement.   The Concessionaire will receive availability payments throughout the operating period, and FDOT assumes the traffic revenue risk.  This is only the fifth highway P3 in the United States to adopt an availability payment structure.
 
Next month, FDOT is expected to short-list at least three and as many four proposers, who will have the opportunity to submit their proposals in early 2014.   The successful proposer is anticipated to be selected in the spring of 2014. 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

On May 1, the Los Angeles County Metropolitan Transportation Authority (Metro) will hold an industry forum to present initial concepts for several multimodal P3 projects that are being considered for the Sepulveda Pass Corridor in Los Angeles County.  The forum will be held from 9:00 a.m. to 12:00 p.m. in the Ticket Room at Los Angeles Union Station.  Los Angeles Mayor Antonio Villaraigosa, Los Angeles County Supervisor Don Knabe, and Art Leahy, Metro's CEO, are expected to address the forum attendees. 

The projects under consideration include a high-capacity rail system and a tolled highway within the Corridor in the vicinity of the I-405 Freeway, a transit connection to the Los Angeles International Airport and a north-south transit opportunity in the east San Fernando Valley that would provide connections to Metro's County-wide transportation network.  The I-405 through the Sepulveda Pass is one of the most congested freeway segments in the nation.  An additional HOV lane is currentlly under construction.
 
Highway and rail tunnels through the Sepulveda Pass, with an initial cost estimate from US $10 - 13 billion, were identified in a concept study authorized by the Metro board this past December.  The study indicated that premium transit fares and tolls will be necessary to finance the projects due to limited alllocation of public funding under the Measure R sales tax measure that the voters of Los Angeles County approved in November 2008. The Sepulveda Pass Corridor is one of twelve transit projects with funding allocations from Measure R. 
 
Metro is considering the procurement of a pre-development agreement with a private consortium to plan the scope, financing and method for delivering portions or all of the projects.  The project delivery method may be a long term DBFOM concession agreement.
 
To attend the forum, RSVP by April 26 to Teri Argabright of HDR/InfraConsult, Metro's P3 Advisory Team Lead, at Teri.Argabright@hdrinc.com.  Please provide your name, firm contact information and names of attendees.  
 
Tristan Robinson co-authored this entry.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Possibly lost in the shuffle of the rollout last week is the news that the President’s budget proposal (PDF) includes $130 million to help fund two significant transit system improvements in Los Angeles, the Regional Connector and the West Side Extension.

The Regional Connector would be a 1.9-mile underground line that would tie together the Gold, Blue and Expo lines and allow a one-seat ride from Montclair to Long Beach and from East Los Angeles to Santa Monica.  The West Side Extension would build out the Purple Line subway from Wilshire & Western to Westwood, a distance of 9.5 miles.

Both projects were slated for Full Funding Grant Agreements in the Federal Transit Administration’s FY 2014 New Starts Report (PDF).  Metro has identified these two projects as its priority projects.

Only one other project, the Columbia River Crossing, a bridge project with an FTA-supported transit component, was included in the President’s budget proposal and recommended for a FFGA in the New Starts Report.  The Columbia River Bridge Project is co-sponsored by the Oregon and Washington Departments of Transportation.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The California High-Speed Rail Authority recently announced that a joint venture composed of Tutor Perini, Zachry Construction and Parsons has provided the apparent best value proposal for the initial design-build construction package of California's high-speed rail system located in the Central Valley.  The Authority received four other proposals from Dragados/Samsung/Pulice (composed of  Dragados SA; Samsung C&T America and Pulice Construction), California Backbone Builders (composed of Ferrovial Argoman and Acciona), California High-Speed Rail Partners (composed of Fluor, Skanska and PCL Constructors) and California High-Speed Ventures (composed of Kiewit Infrastructure West, Granite Construction and COMSA EMTE USA).  The apparent best value scores are shown in the table below:

The apparent best value selection was based 70 percent on price and 30 percent on technical scores.  The Tutor Perini/Zachry/Parsons proposal price of $985,142,530 was also the lowest price proposal.  The apparent best value proposal price was also significantly below the Authority's cost estimate of between $1.2 and 1.8 billion.  While the initial determination of the apparent best value proposer has been made, the procurement remains in progress.  If the Authority is unable to reach a final contract with Tutor Perini/Zachry/Parsons, the Authority may continue the procurement with the next most highly ranked proposer.

Please see the Authority's website for further information.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

More evidence of the beneficial impacts of transit-oriented development has arrived in the form of a new property values study by the American Public Transportation Association, the Center for Neighborhood Technology and the National Association of Realtors.  

(See also our blog post regarding the EPA report released last month promoting funding mechanisms and other strategies for communities to provide more transit-oriented development.)  

The study found that homes closer to public transit performed 42 percent better (in terms of resilience of property values)  than those further away.  This finding was based on an analysis of home values in San Francisco, Phoenix, Boston, Chicago, and Minneapolis-St Paul between 2006 and 2011.  

Price resilience was highest for properties near transit stations with the most connections and most frequent service.  Interestingly, housing type (apartment, single-family, townhouse etc) had no impact on the study, with the results holding true across all property types.  Residents in a “transit shed” (within a half a mile of selected transit) also had “better access to jobs and lower average transportation costs” than the study area as a whole.  

The full text of the report is available on the American Public Transportation Association website.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

This week the Maryland Transit Administration (“MTA”) issued a Request for Information (“RFI”) requesting private sector involvement to collect best practices for delivery and financing of the planned Maryland National Capital Purple Line and Baltimore Red Line.  The proposed Maryland National Capital Purple Line is a 16-mile light rail transit line project that will extend between Bethesda and New Carrollton, Maryland.  The proposed Baltimore Red Line is a 14.1 mile, east-west transit line that will connect Woodlawn, Downtown Baltimore and Johns Hopkins Bayview Medical Center campus.  The RFI comes days after Governor O’Malley signed the new Maryland Public-Private Partnership (“P3”) legislation into law.  The new P3 legislation provides a more predictable and linear process for private sector involvement in future P3 projects, while also requiring competitive bidding, protection of public assets and the ability for private sector actors to submit unsolicited proposals to address Maryland’s imminent infrastructure needs.  With the new P3 law paving the way, the MTA hopes the RFI will uncover combinations of traditional project delivery approaches that will achieve the highest time and cost savings, while ensuring high-quality service.

The deadline for RFI responses is May 8, 2013.  The RFI and the official press release can be found on the Maryland Transit Administration website.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Nossaman would like to congratulate the California Department of Transportation and the San Francisco County Transportation Authority for the Presidio Parkway Project's recognition as the "Best Real Estate Deal of the Year" in the category of Infrastructure/Public-Private Partnership by the San Francisco Business Times.  Winners were announced at the publication's annual awards dinner in San Francisco on March 20, 2013.

This recognition is the latest in a number of industry awards honoring the Presidio Parkway Project, which is the first transportation project to be procured under California's 2009 PPP statute, and only the fourth highway project in the United States developed using an availability payment structure.  A Nossaman team, led by Barney Allison, advised Caltrans on the $1.1 billion deal, which reached financial close on June 14, 2012.
 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

As the 2013 award season heats up for 2012 successes around the world, the juries are increasingly finding the US market hard to ignore. Infrastructure Journal and PPP Bulletin International, the two London-based media organizations that annually recognize top projects and industry organizations worldwide, have each announced their finalists for this year's best transportation transactions and firms. Focusing on public-private partnership projects as opposed to those mega-projects which are the subject of major design-build contracts, these organizations nevertheless both found much to honor during a standout period.

Infrastructure Journal has announced that the Virginia Department of Transportation's Downtown Tunnel/Midtown Tunnel/MLK Extension Project ("Midtown Tunnel") is one of four finalists for its Global Transport Deal of the Year, the third time in four years IJ has so recognized US projects, starting with the Texas Department of Transportation's North Tarrant Express, named the Global Transport Project of 2009 and finalist for the overall Global Infrastructure Project of that year; and the Florida Department of Transportation's I-595 Project, also a finalist for the 2009 Global Transport Project. For this year's awards, the publication reviewed more than 600 submissions and will announce the winner on April 17, 2013.

PPP Bulletin International has announced that the California Department of Transportation's Presidio Parkway Project, the Midtown Tunnel and VDOT's I-95 Express Lanes project are all among the finalists for its Best Transport Project of the Year. The publication will announce the winner on May 23, 2013.

We congratulate VDOT, Caltrans and their private partners for this well-deserved recognition.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

In a proposed rule to be published today, April 1, 2013, in the Federal Register, the United States Environmental Protection Agency will withdraw the numeric effluent limits for construction stormwater turbidity that the agency previously had proposed in 2009.  EPA is now proposing a rule that specifies minimum Best Management Practices (BMPs) as effluent limitations for purposes of controlling  pollutants in construction site stormwater runoff.  In general,  the rule concludes that BMP-based effluent limits constitute both a technically feasible and a cost effective way to regulate construction site stormwater pollutants.

This development will not eliminate stormwater monitoring or the construction stormwater numeric action levels set forth in the Construction Stormwater General NPDES Permits that govern construction sites in certain states that have assumed administration and enforcement of the federal Clean Water Act NPDES permitting program, such as California and Washington.  But this development will assure more cost effective regulatory compliance for construction sites in states, such as Texas, that are still subject to stormwater regulation by EPA because those states have not yet been granted delegation of federal Clean Water Act permitting authority.  This development also indicates that EPA has determined that the technical hurdles for controlling and treating pollutants in stormwater and the extremely high costs of stormwater compliance with numeric limits for pollutants like sediment make BMPs, and not numeric limits, the appropriate approach to controlling stormwater pollutants to the "maximum extent practicable" as required by the federal Clean Water Act.   In light of this proposed rule, it appears that EPA will not be proposing to raise the already extremely high bar set by California's State Water Resources Control Board and Washington's Department of Ecology when those agencies adopted their statewide Construction Stormwater General NPDES Permits.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Almost a year to the day from when the procurement began, the East End Crossing P3 project has achieved financial close.  Raising nearly $1 billion of public and private debt and equity funding, WVB East End Partners, made up of equal shares to WI East End (“Walsh”), VINCI Concessions Investments and Bilfinger East End Holdings, will now finalize design and begin construction of the project which consists of a new bridge over the Ohio River, a tunnel as part of the Kentucky approach, and a highway as part of the Indiana approach.  Indiana Finance Authority acts as the public sponsor under the availability payment contract which was signed at the end of last year as well as the conduit issuer for the private activity bonds.

The debt portion of the financing is made up of two series of tax exempt private activity bonds.  Series A, in the principal amount of $482,310,000, has maturities starting in July 2035 with final maturity in January 2051; pricing for the long bonds is between 4.56% and 4.96%.  A construction financing tranche in the principal amount of $194,495,000, has a nominal maturity of January 2019, but is callable earlier as milestone payments are achieved; baseline substantial completion is scheduled for the end of October, 2016.  This Series B short-term piece is priced to yield 2.28%.  Lead underwriter for the deal is Bank of America Merrill Lynch, with JP Morgan, Goldman and RBC Capital as co-senior underwriters.  Equity members will contribute approximately $78 million towards project costs.

As described in our earlier blogs when the P3 availability payment contract was signed, this project featured a number of firsts for a US P3 procurement and this was also the case for the financial close.  East End is the first US project to achieve “flat” investment grade ratings from S&P and Fitch; according to S&P Indiana is “one of the strongest appropriation pledges in this sector” and the contract is a “…well developed public/private agreement with clear and logical risk allocation.”  The project is also the first US P3 transport deal to not use TIFIA in its capital structure.

The attractive pricing for the bonds helped reduce the risk of changes in long-term muni bond rates since October, 2012, when WVB submitted their proposal, which in turn resulted in very little change in the availability payment since the bid date.

We congratulate the sponsors on reaching this major project milestone.

• Email This
• Print
• Comments
• Trackbacks
• Share Link