FDOT Announces Apparent Best Value Proposer for I-4 Managed Lanes Project

The Florida Department of Transportation (FDOT) announced today that it has selected I-4 Mobility Partners as the apparent best value proposer to design, build, finance, operate and maintain the I-4 Ultimate project.  The I-4 Ultimate project contemplates a 40-year availability payment contract at a total design and construction cost of $2,323,000,000.00 in year of expenditure dollars.  This cost is approximately $860 million less than the highest proposal received by FDOT at $3,180,033,233.90 in year of expenditure dollars.  Commercial and financial close is expected to occur later this summer. 

The members of the I-4 Mobility Partners team include the following:

  • Skanska Infrastructure Development Inc. (Equity Member)
  • John Laing Investments Limited (Equity Member)
  • Construction Joint Venture – Skanska USA Civil Southeast Inc., Granite Construction Company, and the Lane Construction Corporation (Lead Contractor)
  • Design Joint Venture – HDR Engineering, Inc. and Jacobs Engineering Group, Inc. (Lead Engineer)
  • Infrastructure Corporation of America (Lead Operations and Maintenance firm)

The project includes the reconstruction of 21 miles of I-4 from west of Kirkman Road in Orange County to east of State Road 434 in Seminole County.  The I-4 Ultimate project adds four tolled express lanes to I-4 while maintaining the existing free general use lanes, providing a choice to motorists.  The express lanes will be operated with variable tolls which will be adjusted to improve traffic flow throughout the corridor.  FDOT will retain the toll revenue and will control the toll rates. 

The FDOT press release can be found on the project website.

Congressional Panel Explores International Experience with Public-Private Partnerships

On Tuesday, April 8th, the House Transportation and Infrastructure Panel on Public-Private Partnerships held a hearing on "The International Experience with Public-Private Partnerships".  The Panel focused in particular on the Canadian experience, observing that over the past two decades Canada has become one of the most advanced and active markets for P3s. The witness list and links to their testimony are as follows:

The Honorable John Delaney, United States Representative, Maryland

Dr. Larry Blain, Chairman of the Board of Directors, Partnerships British Columbia | Written Testimony

Mr. David Morley, Vice President, Business and Government Strategy, Infrastructure Ontario | Written Testimony

Cherian George, Managing Director – Americas, Global Infrastructure & Project Finance, Fitch Ratings | Written Testimony

Dr. Matti Siemiatycki, Associate Professor, Program in Planning, University of Toronto | Written Testimony

Congressman John Delaney began by describing the magnitude of the nation’s infrastructure deficit.  Referring to an estimate made by the American Society for Civil Engineers, he explained that close to $4 trillion needs to be invested to bring infrastructure in the US up to world class standards.  As governments are cash strapped, he advocated that private sector capital be engaged to increase investment in infrastructure to fill the gap, and he noted the importance of smart P3 frameworks to meet this infrastructure challenge.  Congressman Delaney referred to The Partnerships to Build America Act (H.R. 2084), which he introduced to the House on May 2013.  He explained that The Partnerships to Build America Act would provide for the financing of state and local government transportation, energy, communications, water, and education infrastructure projects through the creation of an infrastructure fund.

The Panel did not put questions to Congressman Delaney, leaving that for the House. The Panel did, however, engage in a lively discussion with the remaining witnesses about the Canadian experience with P3s and explored the suitability of the Canadian approach for infrastructure projects in the US.

Witnesses outlined various factors that have resulted in successful P3 projects in Canada.  The creation of specialized provincial agencies staffed with experts skilled with both evaluating projects for P3 delivery and negotiating with the private sector was noted as a significant factor contributing to successful P3 deals. Further, the development by these agencies of consistent and predictable procurement processes and standardized documentation has facilitated the delivery of P3 projects and encouraged the development of the P3 market in Canada.

Mr. George of Fitch Ratings, discussing P3s from a global perspective, pointed out that P3s can provide public value, but these transactions need to be appropriately designed and carefully crafted to address all stakeholder concerns.  He indicated that projects that have a defined scope where performance can be measured are better suited to P3 delivery.  He noted that lessons can be learned from past P3 projects undertaken around the world.  He spoke to a few examples including the 407 toll road in Ontario and Chicago’s Skyway toll concessions, each of which came under considerable criticism and involved legal disputes.

Witnesses pointed out that in Canada P3s are not typically used to raise new money to pay for infrastructure through user fees or tolls.  Instead, P3s are viewed in Canada as a way to finance a project using private capital that is repaid overtime by the government through availability payments.  Congressman Sean Patrick Maloney (D-NY) indicated that while P3s are not viewed as a funding solution in Canada, P3s are being considered for that purpose in the US.

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The Regents of the University of California Issues RFQ for UC Merced 2020 Project

The Regents of the University of California (the "Regents"), on behalf of University of California, Merced ("UC Merced"), issued a Request for Qualifications today for the UC Merced 2020 Project (the "Project").

UC Merced is the newest campus of the University of California and is strategically situated in San Joaquin Valley at the foot of the Sierra Nevada near world-famous Yosemite National Park.

The Project represents the second phase of campus development under UC Merced’s Long Range Development Plan and involves a significant campus expansion to support projected enrollment growth from 6,200 current students to 10,000 students by the year 2020.  
 
The Regents is seeking a developer to undertake the comprehensive development, including the design, construction, financing, operation and maintenance of some or all elements, of academic, administrative, research, recreational, student residence and student services buildings, utilities and infrastructure, outdoor recreation and open space areas, and associated roadways, parking and landscaping, for UC Merced.  The Project will be located on approximately 219 acres, which includes the existing 104-acre campus, and will involve up to 1.85 million square feet of new facilities.  The Project envisions a dynamic expansion of the existing UC Merced campus with new mixed-use development that integrates students, faculty and staff into a sustainable living and learning environment.
 
Statements of Qualifications are due on June 17, 2014, and the Regents anticipates shortlisting between three and five respondents in September, 2014.
 
For more information regarding the RFQ and the Project, please visit the Project website at: http://2020project.ucmerced.edu/.

Indiana Achieves Commercial Close on its Second Availability Payment P3

Indiana closed its second availability payment-based P3 project, the I-69 Section 5 project.  "Section 5" is the fifth of six planned sections to link Evansville, Indiana with Indianapolis.  The RFQ for Section 5 was published on May 23, 2013 and the Indiana Finance Authority ("IFA") – once again partnering with the Indiana Department of Transportation – never missed a deadline, achieving commercial close on April 8, 2014.

Indiana’s private partner is the I-69 Development Partners, with Isolux Infrastructure Netherlands B.V., a Spanish-Dutch P3 developer (“IIN”) partnering with its affiliate, Corsan-Corviam Construccion, S.A., as its design-builder, and the joint venture of Arizona-based AZTEC Engineering Group, Inc. and Técnica y Proyectos S.A. (or “TYPSA”), as its designer.  Regional and Indiana-based team members Burgess & Niple, Inc., E&B Paving, Inc. and others round out the concessionaire team.  The I-69 Section 5 project involves reconstructing a 21 mile stretch of existing Indiana State Route 37 to interstate standards, a project with both rural and urban design features, underground geological “karst” challenges and located adjacent to the home of Indiana’s flagship state university in Bloomington.

The Section 5 marks IIN’s first stateside P3.  IIN, with three other major international and domestic  developers and regional P3 players, are also shortlisted for Indiana’s next P3 procurement, the Illiana/I65 Project, linking Northwest Indiana with the companion P3 project being procured by the Illinois Department of Transportation, creating alternative entry into the greater Chicago area.

I-69 Development Partners bid an attractive $21.78 million base year “maximum availability payment,” and also achieved a high technical evaluation score.  Four shortlisted teams submitted proposals in response to IFA’s RFP and  were evaluated in late January.  A low bid and a high technical evaluation won IIN the day.  Financial Close is expected in late June 2014.

John Smolen co-authored this entry. 

Florida I-595 Express Lanes Open

On March 26, the Florida Department of Transportation (FDOT) celebrated the grand opening of the $1.2 billion I-595 Express Corridor Improvements Project (Project) in Broward County, Florida.  The Project is the nation’s first Availability Payment public-private partnership and the first public-private highway deal in Florida.

The Project consists of the reconstruction of the I-595 mainline from the I-75/Sawgrass Expressway interchange to the I-595/I-95 interchange on I-595 and from Peters Road to Griffin Road on Florida's Turnpike, for a total project length of 13 miles.  The Project includes three reversible express, variable-toll lanes at grade in the median of the existing highway, from Interstate 95 to Interstate 75, a distance of approximately 10 miles.  

In March of 2009, FDOT signed the concession agreement with ACS Infrastructure Development Inc., a U.S. subsidiary of Group ACS in Spain, to design, build, finance, operate and maintain the I-595 for 35 years.  Construction of the Project began in June 2009 and was completed in less than 5 years and ahead of schedule.
 
Some of the key milestones and achievements highlighted by FDOT are:
  • I-595 improvements completed over 15 years sooner than originally projected
  • Innovative design/build processes allowed for execution of the I-595 Project in record time
  • Less than 0.7% of the construction cost in scope changes
  • No time added to the contract
  • All project milestones achieved
  • Project of the Year Award in 2009 by the American Road & Transportation Builders’ Association (ARTBA) for outstanding contributions to the promotion of public private partnerships that advance transportation infrastructure improvements
  • Award of Excellence in Civil/Public Works in 2010 by Southeast Construction Magazine for partnering with three private golf courses for storm water treatment and saving millions of dollars in right of way acquisitions.
  • 2009 North American Transport Deal of the Year by Project Finance Magazine. 
Nossaman is proud to have served as FDOT’s outside legal advisor on this groundbreaking transaction.
 
For more information about the I-595, visit the project website.

FDOT Receives Financial Proposals from Four Teams for I-4 Ultimate Project

The Florida Department of Transportation (FDOT) announced yesterday that it received four financial proposals in response to a Request for Proposals issued by FDOT on October 11, 2013 for the I-4 Ultimate Project.  On June 5, 2013, FDOT announced a shortlist of four proposers, all of whom submitted financial proposals yesterday and technical proposals on February 12, 2014 seeking the contract to design, build, finance, operate and maintain the project.

The estimated $2 billion project, which will be developed through a public-private partnership concession agreement, includes the reconstruction of 21 miles of I-4 from west of Kirkman Road in Orange County to east of State Road 434 in Seminole County.   The project adds four tolled express lanes to I-4 while maintaining the existing free general use lanes, providing a choice to motorists. 

FDOT received financial proposals from the following shortlisted teams (listed in the order received):

  1. Ultimate Mobility Partners (InfraRed Capital Partners Limited; Fluor Enterprises, Inc.; Kiewit Infrastructure South Co.);
  2. I-4 Mobility Partners (Skanska Infrastructure Development Inc.; John Laing Investments Limited);
  3. 4wardPartners (VINCI Concessions S.A.S.; Meridiam Infrastructure I-4 Ultimate, LLC; Walsh Investors, LLC); and
  4. I-4 Development Partners LLC (Macquarie Capital Group Limited; OHL Concesiones.A.; FCC Construccion S.A.).
FDOT is reviewing the financial proposals and technical proposals and expects to make final selection of a best value proposer at a public meeting on April 23, 2014.  
 
For further information, please visit the project website at www.moving-4-ward.com.  A more detailed list of each proposer team can be found under “Project Info/Docs” on the project website.

Federal Highway Trust Fund Funding Problem Will Hit State Projects This Fall

Posted by guest blogger William Moore.

William Moore of Vianovo works with the Transportation Transformation Group,  a consortia of public and private entities that looks at ways of improving the funding and financing of the nation's transportation infrastructure, which is co-chaired by Nossaman Partner Geoffrey Yarema.

Absent swift action by Congress, state departments of transportation will begin to have cash flow problems that could delay payments to vendors and slow projects.  Without action by the fall, new projects may have to be shelved until Congress can resolve the funding crisis that confronts the Highway Trust Fund.

For many years, the U.S. Department of Transportation has insisted it must keep a cash cushion of $4 billion in the highway portion of the Highway Trust Fund and $1 billion in the transit portion. This July, absent action to stem the negative cash flow, the highway fund will dip below the minimum in July; the transit fund will succumb in August.

This is not unprecedented. A similar situation occurred in 2008, but it was brief dip below the minimum balance and involved only the highway account.

As in 2008, the Federal Highway Administration, the agency in charge of highway spending, is expected to begin delaying reimbursements to states. Some expect reimbursements will occur only once every two or four weeks, instead of the current practice of daily payments. Without additional funding, no new surface transportation projects would be funded by the HTF in 2015.

Reflecting the uncertainty of funding, Moody's Investors Service in February downgraded the ratings of 16 GARVEE bond issues tied to U.S. road money. The rating agency said it had decided to cut the scores from A1 to Aa3 for those GARVEEs that rely solely on federal monies and lack cash-funded debt reserves or other structural protections against possible interruption to the flow of federal money. The bonds were issued by agencies in California, Georgia, Idaho, Kentucky, Maine, Michigan, Montana, New Hampshire, North Carolina, Oklahoma, Rhode Island, Washington, West Virginia and Washington, D.C. It also cut the ratings of GARVEEs issued by Michigan and New Jersey agencies from A1 to A2.

Since 2008, revenues from motor fuels taxes into the Highway Trust Fund have dropped. In response, Congress has transferred $53 billion into the fund from the government’s general fund. DOT Acting Undersecretary for Policy Peter Rogoff told a House committee March 12 that when balances fall below the minimum this summer, the department will have to implement emergency measures to maintain a positive balance. The measures will cause cash flow problems for state transportation agencies that pay contractors for highway and transit capital projects.

The current surface transportation authorization expires September 30, 2014. Congress will need to find an additional $16 billion per year to maintain current Highway Trust Fund spending levels, leading many to anticipate that this year’s bill will be more about revenue than about policy. In order to avoid massive layoffs mere months before the November congressional elections, Congress may have to enact a short-term revenue bill this summer to temporarily maintain the program while working towards an end-of-the-year long-term solution. 

Disclaimer: The views and opinions expressed in this post are those of the author and do not necessarily reflect those of Nossaman LLP.

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Congressional Panel Explores Industry's Views on Public-Private Partnerships

On Wednesday, March 5, the House Transportation and Infrastructure Special Panel on Public-Private Partnerships held a hearing entitled "Overview of Public-Private Partnerships for Highway and Transit Projects" to review the role of P3s in delivery of highway and transit projects. The witness list and links to their testimony are as follows:

Mr. Joseph Kile, Assistant Director for Microeconomic Studies, Congressional Budget Office (CBO) Written Testimony

Mr. James M. Bass, Interim Executive Director and Chief Financial Officer, Texas Department of Transportation Written Testimony
 
Mr. Phillip Washington, General Manager, Regional Transportation District Written Testimony
 
Mr. Richard A. Fierce, Senior Vice President, Fluor; on behalf of Associated General Contractors of America Written Testimony
 
The hearing was well-attended by Members of the panel, who all expressed their interest in the issue and usefulness of the hearing, and the question and answer period delved into a variety of subjects, from if and how the federal government should be involved in P3s to exploring specific examples of how P3s would be beneficial.
 
Both Members and witnesses discussed the importance of evaluating each potential project for its suitability to proceed as a P3.  There was wide agreement that P3s are a valuable tool for infrastructure projects, but they are not a “silver bullet” for solving our nation’s infrastructure needs.  There were many questions directed at Mr. Kile from the CBO as Members tried to drill down on whether savings exist in the short and long term by using P3s versus traditional financing and project delivery.  The CBO’s research is limited by the number of major P3s to examine, but Mr. Kile noted that they are delivered slightly faster and are slightly less expensive.  Witnesses also said that P3s, particularly those involving the operation and maintenance of projects, may benefit from efficiencies as the private sector takes into account life-cycle costs during the design and construction of the project. 
 
Members and witnesses also identified environmental streamlining as an area where project timeframes and costs can be reduced. Mr. Bass noted that as a result of MAP-21 provisions, Texas will be taking lead responsibility for environmental reviews, which will create permitting efficiencies.  Additionally, as states go through the procurement process with P3s, it is critical that environmental reviews of projects stay on schedule.
 
Rep. Sean Patrick Maloney (D-NY), a self-professed fan of P3s, asked panelists whether the PAB and TIFIA programs are structured correctly as is, or if they need expansion.  Witnesses universally expressed the importance of these two particular programs to successful P3 projects, with Mr. Fierce of Fluor advocating to lift the cap on PABs. 
 
Del. Eleanor Holmes Norton (D-DC) expressed some concern at how “private” some P3s are, given the common use of PABs, the TIFIA program, or other federal funding sources to make up a large portion of the project funding.  Witnesses clarified that in some projects, the private equity bridges a gap in funding that allows a project to move forward faster than it otherwise could. 
 
Rep. Michael Capuano (D-MA), while saying he likes the idea of finding new tools to upgrade our country’s infrastructure, noted that P3s would play a lesser role if policymakers made the politically unpopular decisions to increase taxes or other fees and fully fund the Highway Trust Fund and local funding sources. 
 
Rep. Candice Miller (R-MI), from a state without a P3 law, focused on eliciting from witnesses what states have had success with P3s.  Witnesses pointed to Virginia as a leader, and also to the useful role the U.S. Department of Transportation has taken in bringing together folks with expertise in P3s in various states to share thoughts with other states considering adopting a P3 law. 
 
Simon Santiago co-authored this entry. 

White House Backs the $2.2 Billion Purple Line

On Tuesday, March 4th federal officials recommended the Maryland Transit Administration’s Purple Line Public-Private Partnership Project ("Purple Line") to receive $100 million in federal construction money as part of the Obama Administration’s 2015 fiscal year budget. The Federal Transit Administration recommended the Purple Line as one of seven large transit projects in the nation to receive full funding grant agreements, which allow for a longer-term payment commitment by the federal government. The other six projects are the Westside Subway Expansion – Section 1 (Los Angeles), Sunrail Phase II South (Orlando), Green Line Extension (Cambridge to Medford, MA), Red Line (Baltimore), Columbia River Crossing Project (Portland) and TEX Rail (Fort Worth).

The Purple Line, which is estimated at $2.2 billion in construction costs, is seeking a total of $900 million in federal funding.  Representative Donna Edwards (D-MD), whose district is located along the proposed line in Prince George’s County commented on the announcement, “This really keeps the Purple Line on the trajectory we need.” Maryland transit officials hope to begin construction on the 16-mile light-rail transit line in 2015, with services beginning in 2020. 

 

City of Indianapolis Shortlists Three Development Teams for Marion County Consolidated Justice Complex

On March 4, 2014, the City of Indianapolis announced that three development teams have been short-listed to compete to design, build, finance, operate and maintain a new Marion County Consolidated Justice Facility.  Replacing existing facilities, the proposed new facility will consolidate various aging and inefficient facilities throughout the county, and may house separate adult and juvenile detention, inmate processing, the prosecutor, public defender, probation and community corrections, clerk, coroner, crime lab and other state and federal agencies.  The new complex will add 1,000 new jail beds and ease overflow of courtrooms in the City County Building.

The three short-listed teams are, in alphabetical order:

Indy Justice Partners
Equity Members: Fengate Capital Management Ltd., AECOM Global Fund I LP, Shiel Sexton Company, Inc.
 
Plenary Edgemoor Justice Partners
Equity Members: Plenary Group USA Ltd., Edgemoor Infrastructure & Real Estate LLC
 
WMB Heartland Justice Partners
Equity Members: Meridiam Infrastructure Indy Justice, LLC, Balfour Beatty Investments, Inc., Walsh Investors, LLC
 
The City originally received five responses to its Request for Proposals and Qualifications (RFPQ).  Over the coming weeks, the City will meet with the three short-listed development teams and plans to release a Request for Revised Proposals to the three teams by late spring with a due date late this summer.  Finally, the City will then select a preferred developer group and submit the project to the City-County Council for approval.  
 
Additional information about the teams, including non-equity local partners, is available on the project website.  

Major Court of Appeals Decision Allows Construction of $5 Billion Transit Rail Project in Honolulu to Proceed

On the front page of Nossaman's website, we report on the result of decisions by the United States Court of Appeals for the 9th Circuit and the United States District Court for  the District of Hawaii that allow the construction of a 20-mile, $5 billion, rail transit project to proceed.  This project will transform the City of Honolulu, which now has some of the worst traffic  in the United States.  Nossaman was counsel to the City of Honolulu in the litigation.

These cases clarify important aspects of the alternative selection process under the National Environmental Policy Act (NEPA) and section 4(f) of the Department of Transportation Act.  More specifically:

  1. Linking planning and NEPA.   These cases confirm that, under certain circumstances, transportation agencies may rely on the studies and decisions made during the transportation planning process to narrow the range of reasonable alternatives considered in an environmental impact statement (EIS).  Prior to the enactment of MAP-21, applicants for major capital transit project grants (“new starts) had to prepare an “Alternatives Analysis” to demonstrate the need for and financial feasibility of the transit project.  FTA and the FHWA issued guidance on linking the transportation planning process and the NEPA process so as to avoid duplicative analyses in EISs and EA/FONSIs.  The Alternative Analysis was specifically referenced in  this guidance as a way for transit projects to document this linkage. MAP-21 eliminated the requirement that the FTA  prepare the Alternative Analysis, required  FHWA and FTA to more rigorously link planning and NEPA.  The 9th Circuit agreed that the FTA could properly rely on the Alternatives Analysis to to limit the range of alternatives presented in the EIS where the FTA provided guidance regarding the preparation of the Alternatives Analysis and the public was provided an opportunity to comment on the Alternatives Analysis .  This express linking of planning and NEPA should be of considerable benefit in defending focused alternative analyses in the future.
  2. Extraordinary additional cost alone is sufficient to reject an alternative as imprudent under Section 4(f) of the Department of Transportation Act.  Section 4(f) prohibits the use of land from publicly owned parks, recreational areas, and wildlife and waterfowl refuges, as well as all historic sites, of national, state or local significance, unless the Secretary determines that there are “no feasible and prudent alternatives” to the use of such lands.  FTA rejected two tunnel alternatives from detailed evaluation in the EIS  because they would have cost an additional $650 million more than the proposed project.  In 2012, The District Court upheld the FTA’s determination that additional cost for the tunnel alternative  rendered the one of the tunnel alternatives as not prudent.  In its February 2014 decision, the District Court upheld the FTA’s determination that the second tunnel alternative was not an avoidance alternative and was not the “least harm” alternative on cost and other grounds.  
These cases involved many other important issues, including the treatment of subsurface traditional cultural properties and burial sites, and constructive use of Section 4(f) sites, to name a few.  The 9th Circuit decision is HonoluluTraffic.Com v. Federal Transit Administration, 2014 U.S. App. (9th Cir. February 18, 2014).  The District Court decision affirmed by the 9th Circuit is HonoluluTraffic.Com v. Federal Transit Administration, 2012 U.S. Dist. (D Haw. November 1, 2012).
 
Edward Kussy co-authored this entry. 
 
View a larger version of the map above on the project website

President Obama Announces a Proposal to Fund a Four Year Surface Transportation Bill at $302 Billion

On February 26, President Obama announced a proposal to fund a four year surface transportation bill that would increase spending by 22% for highways and 70% for transit over current levels.  The White House provided a Fact Sheet that outlines to proposal.   The current law, the Moving Ahead for Progress in the 21st Century Act (MAP-21) expires at the end of September.  That means that a new bill or an extension must be agreed to by both Houses of Congress by that time.  The President's envisions a $302 billion four year bill that builds on the substantive provisions of MAP-21.  More specifically, 

  • Administration envisions finding an additional $150 billion for a one time infusion into the Highway Trust Fund through various tax reforms.  This would cure the current shortfall and provide for an additional $90 billion dollars over current trust fund revenues, allowing for the four year $302 billion dollar bill.  
  • The plan highlights a “Fix-it-First” approach to encourage greater emphasis on repairing existing transportation facilities. 
  • The proposal would provide $206 billion for highway projects, $72 billion for transit, $19 billion for rail, and $10 billion for a multimodal freight grant program. 
  • The program would continue the TIFIA program at the current level of $1 billion per year. 
  • Also envisioned are new provisions to enhance program efficiency, improving project delivery and expediting the regulatory review process. 
  • The program would continue current themes of focusing on transportation design to support more resilient communities.  
AASHTO welcomed the announcement, particularly because of the additional funding it would provide for transportation funding and for addressing the growing shortfall in the Federal Highway Trust Fund.  Chairman Shuster of the House Transportation and Infrastructure Committee was encouraged by the President's proposal, noting that Chairman Camp of the House Ways and Means Committee also proposed funding transportation through $125 billion in tax reforms.  
 
The White House Fact Sheet was not clear as to whether the Administration plans to send a bill to Congress.  It also said nothing about additional funding for high speed raid projects.  Finally, the statement made no mention of long term fixes for highway trust fund, such as additional or alternative users fees, beyond the life of the four year proposal.
 
The White House also announced a new $600 million for TIGER grants from the Consolidated Appropriation Act, signed by the President on January 17, 2014.  It is clear that the Administration would like to continue TIGER grants for the foreseeable future.
 

Indiana Finance Authority Shortlists 4 Proposers for its Indiana Portion of the Illiana Corridor Project & I-65 Added Capacity Project

On February 28, 2014, the Indiana Finance Authority ("IFA"), in coordination with the Indiana Department of Transportation ("INDOT"), shortlisted four teams for its Indiana Portion of the Illiana Corridor Project (the "Indiana Portion") and I-65 Added Capacity Project ("I-65 Project" and collectively with the Indiana Portion, the "Project").  The project website is located at http://www.in.gov/ifa/2763.htm.  

The Illiana Corridor Project is a collaborative effort among the Illinois Department of Transportation (“IDOT”), INDOT, and IFA to construct a highway, approximately 46.8 miles long, which provides an east-west connection between I-65 in Indiana and Interstates 57 and 55 in Illinois.  The Indiana Portion consists of the new construction of an 11.7 mile, four-lane median divided tolled highway, extending from the Illinois/Indiana stateline at the west end and connecting to I-65 north of Lowell, Indiana at the east end.  The I-65 Project involves the construction of additional travel lanes on I-65 and will be located between SR 2 extending north to US 30.  IDOT is pursuing a separate procurement for the portion of the Illiana Corridor located in Illinois; three out of the four teams shortlisted by IFA were also shortlisted by IDOT.

The Project marks the third foray of Indiana into the emerging availability payment structure of public-private partnerships in the United States, having led with the East End Crossing project (part of the Louisville-Southern Indiana Ohio River Bridges Project), successfully financed at the end of March 2013 and the I-69 Section 5 Project, scheduled for commercial close in April 2014.  The Project also marks the third effort of the joint IFA and Indiana Department of Transportation Team in using innovative project delivery approaches to meet growing transportation infrastructure demands in Indiana.  

The shortlisted teams, in alphabetical order, are: 
  • Indiana Corridor Transportation Group (joint venture of ACS Infrastructure Development, Inc. and Fengate Capital Management Ltd.), partnering with Dragados USA, Inc., F.H. Paschen, S.N. Nielsen & Associates LLC and William Charles Construction Company, LLC  as the joint venture lead contractor, Jacobs Engineering Group, Inc. as the lead engineering firm and with others. 
  • Illiana East Mobility Partners (through its sole equity member, Cintra Infraestructuras, S.A.), partnering with Ferrovial Agroman US Corp and White Construction, Inc. as the joint venture lead contractor and Janssen & Spaans Engineering, Inc., as lead design and engineer and with others.
  • Isolux Infrastructure Netherlands B.V. (with Isolux Infrastructure Netherlands B.V. acting as sole equity member) partnering with Corsan-Corviam Construccion, S.A. as lead contractor, a joint venture of AZTEC Engineering Group, Inc. and TYPSA (Tecnica y Projectos S.A.) working together as the lead engineering firm and with others. 
  • WM Indiana- Illiana Partners, LLC  (joint venture of Walsh Investors, L.L.C. and Meridiam Infrastructure Illiana IN, LLC), partnering with Walsh Construction Company II, LLC as the builder, Parsons Transportation Group as the lead engineering firm and with others.
IFA plans to issue a final RFP in July of this year with award and execution of the comprehensive P3 agreement at the end of 2014.
 
The INDOT press release can be found on the project website. 

California Successor Agencies Rejoice: IFD Law Now Includes Redevelopment Project Areas

By Albert Reyes

In a move that should make successor agencies to redevelopment agencies happy, a new law was passed and approved by the Governor on February 18, 2014 (AB 471) that, among other things, amends Section 53395.4 of the California Government Code to allow infrastructure financing districts to finance a project or portion of a project located within a redevelopment project area or former redevelopment project area.

Infrastructure financing district law now provides a mechanism to finance projects that would have otherwise been financed by redevelopment agencies but for their elimination.  Cities or counties (which generally act as the successor agency, in charge of implementing the dissolution of redevelopment agencies), can now form a infrastructure financing district over a redevelopment project area to finance redevelopment projects that were not yet completed prior to the dissolution of redevelopment agencies.

Section 53395.4(c) states: “A district may finance a project or portion of a project that is located in, or overlaps with, a redevelopment project area. The successor agency to the former redevelopment agency shall receive a finding of completion, as defined in Section 34179.7 of the Health and Safety Code, prior to the district financing any project or portion of a project under this subdivision.” The debt or obligation created under Section 53395.4(c) will be subordinate to an enforceable obligation of the former redevelopment agency.

AB 471 did not amend the formation or bond issuance process for infrastructure financing districts.  The formation of the infrastructure financing district and the issuance of bonds must be approved by the two-thirds vote of qualified electors (unless the vote is a landowners vote, if there are fewer than 12 registered voters). The newly formed infrastructure financing district can issue bonds to pay for real or other intangible property with an estimated useful life of 15 years or longer and certain public capital facilities of communitywide significance and such bonds will be secured by any increase in property tax revenue (assuming taxing entity consent) over the assessed value of the property within the infrastructure financing district.

AB 471 is effective immediately.  

Indiana Does it Again! IFA Selects Preferred Bidder for I69 Section 5 Availability Payment Project

Following on the success of the East End Crossing P3 project, the Indiana Finance Authority selected a team led by international P3 developer Isolux Infrastructure to design, build, finance, operate and maintain a 21 mile interstate project.  The developer expects to spend $325 million on capital costs for the project and has brought several local contractors on board to assist in the design and construction of the project.  Commercial close is expected in early April, with financial close and the commencement of construction expected this summer.  Substantial completion is anticipated by late fall 2016, several years ahead of schedule.  A major component of the developer’s responsibilities include operation and maintenance of the existing SR 37 highway, a portion of which is located outside of Bloomington, IN, home to Indiana University.

The project is a key component of the new Interstate 69 between Evansville and Indianapolis, a 142 mile corridor that is a major access route for the entire region.

As with the East End Crossing P3 procurement, IFA met every procurement milestone and all 4 shortlisted teams actively participated in the process and submitted compliant bids.  The success of the I69 procurement and the commencement of the P3 procurement for the Illiana/I65 project evidences Indiana’s position as a national leader in leveraging private capital and innovation to deliver transportation infrastructure sooner than expected and at the lower possible cost to taxpayers.  Indiana’s P3 transportation program benefits from the stellar credit ratings conferred on the State attracting low-cost private sector financing using an availability payment form of public-private partnership. 

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