Riverside County Transportation Commission Closes on Billion Dollar Finance Plan for the SR-91 Project

Commuters using the heavily congested SR-91 corridor between Riverside and Orange County in Southern California can enjoy an early July 4th celebration—on July 3, 2013, the Riverside County Transportation Commission closed on a billion dollars of financing for the SR-91 project which will provide needed relief of congestion in the corridor when the project is completed in May of 2017.  RCTC achieved financial close on the project less than 60 days after awarding the design-build contract for the project to a joint venture of Atkinson/Walsh.  The SR-91 corridor improvement project includes an eight-mile extension of the highly successful SR-91 Express Lanes operated by the Orange County Transportation Authority, the first all-electronic toll collection facility in the United States.  The two counties have entered into a cooperative agreement to coordinate the development and operation of the two express lanes projects.  The project also involves adding two new general purpose lanes in Riverside County, one in each direction.

The finance plan optimizes an innovative combination of toll road revenue bonds, sales tax revenue bonds, a subordinate TIFIA loan, as well as the use of sales taxes on a pay-go basis during the construction period.  The toll road revenue bonds are sold in two series—the Series A bonds are current interest bonds in the principal amount of $123,825,000 maturing June 1, 2048, the Series B bonds are capital appreciation bonds in the initial outstanding amount of $52,829,601.60 maturing June 1, 2043.  Both series received investment grade ratings from Fitch and S&P.  The sales tax revenue bonds are made up of serial bonds with maturities ranging from 2018 to 2033 and a term bond maturing June 1, 2039; Fitch, S&P and Moody’s assigned ratings in the “AA” category to the sales tax revenue bonds.
The TIFIA loan is in the initial principal amount of $421,054,409, and, despite the run up in US Treasury bond rates in recent weeks, was assigned an interest rate of 3.47% and matures June 1, 2051 or the last payment date occurring no later than 35 years after the Substantial Completion Date, whichever date is earlier.  The TIFIA loan is subordinate in lien priority to the senior toll road revenue bonds except if a bankruptcy related event occurs in which case the TIFIA loan “springs” to parity with the senior bonds.

Lead investment bankers for the toll road revenue bonds and the sales tax revenue bonds are Goldman and BofA Merrill Lynch; Nossaman LLP acts as special counsel to RCTC in connection with the design/build contract and negotiation and closing of the TIFIA loan.

Contract Award for Riverside Extension of SR-91 Express Lanes

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.

CTC Authorizes First Regional Design-Build Projects

On April 7, 2010, the California Transportation Commission (CTC) authorized the first two regional design-build projects under the state's innovative contracting authority under Senate Bill 4, SBX2 4. 

  • The ExpressLane Project is a joint state/local project of the Los Angeles County Metropolitan Transportation Authority (LA Metro) and the Department of Transportation (Caltrans), which will be implemented by Caltrans.  The project will convert existing carpool lanes on Interstates 10 and 110 to high-occupancy toll (HOT) lanes, or ExpressLanes.
  • The Riverside County Transportation Commission (RCTC) SR-91 Corridor Improvement Project is a local transportation entity project slated for implementation by a regional entity.  It will widen State Route 91 with the addition of new freeway lanes, toll/express lanes, expanded freeway-to-freeway connectors and better access to and from the freeway at congested locations.

Other regional transportation agencies will no doubt be encouraged by the CTC’s unanimous approval of these two projects.

SBX2 4, which authorizes alternative contracting for certain projects was approved on February 20, 2009.  The CTC developed its related P3 policy guidance on October 14, 2009.