Infra Insight Blog

Late last Friday on November 5^th, the U.S. House of Representatives passed the $1.2 trillion bipartisan infrastructure bill, the Infrastructure Investment and Jobs Act or IIJA, which President Biden intends to sign on Monday, November 15^th. Much of the focus of the bill has been on the unprecedented increase in federal spending to rebuild the nation's roads, bridges, airports, seaports and transit systems. However, there are several provisions of the infrastructure bill that expand, and hopefully will make more transparent, the TIFIA credit assistance program. A low-cost ...

On September 3, 2020, San Luis Obispo Regional Transportation Authority (SLO RTA) closed the first TIFIA loan under the U.S. Department of Transportation’s (Department’s) Transportation Infrastructure Finance and Innovation Act (TIFIA) Rural Project Initiative (RPI).  The SLO RTA manages several local and express fixed-route transit lines, as well as several paratransit and dial-a-ride services throughout San Luis Obispo County located in the Central Coast region of California.  The SLO RTA’s current administration, operations, and bus maintenance facility has ...

Last week I attended the Transportation Research Board Annual Meeting in Washington, D.C.  During my Revenue and Finance Committee meeting we heard a presentation from Roger Bohnert, Director of Outreach and Development, for the Build America Bureau.  Among several priorities for the TIFIA Program, the low cost federal credit program for transportation projects, Mr. Bohnert described the Rural Projects Initiative, or “RPI,” which is designed to encourage more utilization of the TIFIA Program for projects in communities with a population of less than 150,000 (based on the ...

A pair of Senators from both sides of the aisle, Senator Todd Young (R-Ind.) and Senator Catherine Cortez Masto (D-Nev.), introduced the Public Buildings Renewal Act of 2019 last week, which would authorize the use of tax exempt financing along with private equity to rebuild schools and public buildings through public-private partnerships.  We owe it to our students and teachers, our firefighters and nurses, and all taxpayers to find a way to upgrade our schools and public buildings.  This is a public health and safety issue that impacts not just Hoosiers, but all Americans.  Our bill ...

Have you ever wished there was a comprehensive, easily accessible project cost database for major US transportation projects?  It would be populated following an in depth review of information available from State DOT’s and would capture not just the capital cost of the project, but it’s operation and maintenance cost and delivery and financing approach.  The information could be valuable in many ways, including assessing the project performance outcomes for P3’s and non P3’s.

As I found out a couple of weeks ago at the Transportation Research Board annual meeting, there ...

Last week the House Republican leadership unveiled its much anticipated US tax reform bill.  The bill proposes the most sweeping changes to the tax code in 30 years—since the 1986 Tax Act, which by the way imposed many of the restrictions on private activity bonds that we operate under today.  Among its many provisions would be the outright elimination of tax exempt private activity bonds for a host of public works type projects.

PABs have been the cornerstone of the financing of billions and billions of dollars of new public infrastructure—much of the focus has been on the $6.5 billion ...

Last week the Orange County Transportation Authority executed the design/build contract for the I-405 Improvement Project with OC405 Partners, a joint venture consisting of OHL USA and Astaldi Construction Corporation.  With a contract price of $1,217,065,000 and a total estimated project cost of $1.9 billion, the project, which consists of 16 miles of reconstruction of one of the most congested corridors in the United States including 14 miles of tolled express lanes, is the largest highway project in California currently under development.

OCTA is a multi-modal county ...

Over a thousand US public finance attorneys converged on the City of Chicago last week for the annual National Association of Bond Lawyers Bond Attorneys Workshop.  The conference, the oldest and largest of its kind, featured a number of breakout sessions devoted to a wide range of issues facing the public finance legal community, including the new management contract rules recently issued by the IRS, Revenue Procedure 2016-44 .  As I wrote sometime ago, NABL was a major influence proposing changes to the rules to make them less formulaic and more flexible given the range of business ...

The need to spend significant dollars on the repair and expansion of the nation’s public infrastructure is a major concern expressed by many.  Even the two presidential candidates for the major political parties, who don’t seem to agree on anything else, agree that a commitment to repair and rebuild the nation’s infrastructure is critical to economic productivity and opportunity for its citizens.

In a recent paper published by the Center for American Progress, a public policy and research organization, entitled Assessing Claims About Public-Private Partnerships, the ...

In response to a request from the California Department of Transportation, 5,000 California drivers signed up for the state’s nine month pilot program to replace the state’s gas tax with a charge based on vehicle miles traveled.  Starting July 1 of this year, the volunteers will make simulated payments based on how many miles they travel.  Participants include drivers from every part of the state and from every socioeconomic background, according to Malcolm Dougherty, Caltrans executive director.  The opportunity to provide valuable input and evaluate the viability of a ...

Drivers of the I-405 in Orange County California are one step closer to an improved facility.  Today the Orange County Transportation Authority (OCTA) authorized release of a final request for proposals to design and construct the I-405 Improvement Project, the largest highway project in Southern California.  The project includes upgrading 16 miles of the I-405 between SR-73 in Costa Mesa and I-605 near the Los Angeles County line, adding a general purpose lane in each direction.  A new lane will also be added next to the current HOV lane between SR-73 and SR-22, and both lanes, in each ...

We all know how hard it is to change federal statutes these days—you need an Act of Congress and the President to sign the bill.  Last week, a group of the top public finance lawyers in the US offered an approach relating to the use of tax exempt bonds that wouldn’t require a change in tax statutes but instead could be accomplished through a change in the regulations relating to the so-called private use test.  As the group pointed out in its letter to high ranking US Treasury officials, Congress itself has made it clear that Treasury had the authority to adopt other, more flexible rules.

The ...

In a number of recent conversations regarding using Public-Private Partnerships (P3s) to deliver large infrastructure projects under an availability payment structure, I’ve heard a lot of angst by public owners over the cost of private finance and that AP’s may be viewed as debt by the rating agencies.  It’s true the rating agencies have indicated that AP’s can be considered debt for purposes of assessing an agency’s debt capacity but that’s only one aspect of the delivery method to consider.

S&P has issued several reports/FAQs regarding P3’s in the last couple of ...

California has long been a transportation innovator, whether battery powered cars, high speed rail or the home of the first managed lanes facility in the United States—the SR91 Express Lanes.  The SR91 Express Lanes opened in 1995; the 10 mile project with two managed lanes in each direction connecting Orange County and Riverside County was originally developed as a P3 toll concession and acquired in 2003 by the Orange County Transportation Authority (and also featured the first fully electronic toll collection system in the world).  Additional managed lanes projects have been ...

To help promote Infrastructure Week—which brings together thousands of stakeholders from around the country to highlight the critical importance of investing in and modernizing America’s infrastructure systems, and the essential role infrastructure plays in our economy—Nossaman is reposting this article on California’s infrastructure needs. To learn more about Infrastructure Week, which runs May 11-May 15, please visit www.infrastructureweek.org or follow Infrastructure Week on Twitter @RebuildRenew.

California is the most populous state in the Country; ...

This Friday, January 23, 2015, California will take the first step in investigating a road user charge pilot program as an alternative to the gas tax when the CTC convenes the Road User Charge Advisory Committee meeting.  The committee was created last year by SB 1077 which authorizes a pilot study.  California joins a handful of other states that are exploring road user charge pilot programs, including Oregon, Washington, and Minnesota.

The 15 member committee is made up of representatives of local and regional agencies, privacy advocates, auto groups and state officials.  According ...

At the TRB P3 Subcommittee meeting on January 12, 2015, among the topics discussed is the growth in the U.S. P3 market of the availability payment approach and less use of toll concessions.  Availability payment contracts have the advantage of lowering financing costs, incentivizing high quality performance and keeping toll setting authority with the public owner.  However, there may be a limit to the amount of annual payments a public agency is willing to commit itself to make.  Toll concessions shift demand and revenue risk to the private sector and interest particularly among ...

The San Joaquin Hills Transportation Corridor Agency today successfully refinanced $1.4 billion of its $2.2 billion in outstanding debt issued to fund construction of the 73 Toll Road. "This is great news for drivers and the communities that surround the 73 Toll Road," said Scott Schoeffel, Chairman of the San Joaquin Hills Transportation Corridor Agency, the joint powers authority responsible for financing the 73 Toll Road. "Refinancing improves the agency's long-term financial health by lowering the annual debt service payments and improving financial flexibility."

The ...

In an historic move, Standard & Poor’s upgraded the Orange County Transportation Agency SR91 Express Lanes Toll Revenue Bonds to AA-, making it one the highest rated managed lanes projects in the world.  The bonds were issued last year to refund bonds that were issued in 2003 when OCTA acquired the SR91 Express Lanes project from the private consortium that developed the project under California’s prior P3 law.

The 91 Express Lanes is a four-lane, 10-mile toll road built in the median of California’s Riverside Freeway, State Route 91, between the Orange/Riverside County line and ...

During the Use of WIFIA breakout session at the NCPPP P3 Connect conference this week in Denver, Elizabeth Corr, Associate Division Director for the EPA, confirmed that the agency will not need to complete the formal federal rulemaking process to implement the Water Infrastructure Finance and Innovation Act.  The Act, or WIFIA, was recently enacted by Congress to make low cost loans and loan guarantees available to public and private sponsors of water projects and is based on the highly successful TIFIA program for transportation projects.  Ms. Corr mentioned that EPA conducted its ...

Wrapping up the 2013 P3 awards season, East End Crossing won the Projects Grand Prize as well as the Gold Prize for best P3 road project at the Partnerships Bulletin awards ceremony Thursday night at the Park Lane Hotel in London.  The toll bridge availability payment project in southern Indiana, USA, was the top winner among 7 other P3 projects nominated from around the world.  Attended by over 700 of the leading industry participants, the project was recognized for its innovative financing structure and well run procurement process.

Connecting Kentucky and Indiana over the Ohio ...

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 ...

Recognizing the innovative P3 approach to project delivery and financial structure for a major US infrastructure project, the Bond Buyer awarded the Indiana Finance Authority's private activity bonds for the East End Crossing the Deal of the Year Award at its annual event held at the Waldorf Astoria hotel in New York City.  Notably, this is the first P3 transaction to win the award.

The $1.2B East End Crossing, a portion of the $2.6B Ohio River Bridges project, one of the largest transportation undertakings in the U.S. and the first availability payment P3 for the Indiana Finance ...

The Indiana Finance Authority (IFA) issued its Request for Qualifications (RFQ) for an availability payments public private partnership for the financing, building and operating of the 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) on November 12.  The Illiana Corridor Project is a collaborative effort among the Illinois Department of Transportation (IDOT), Indiana Department of Transportation, and IFA to construct a highway, approximately 46.8 ...

Last week I attended an invitation only round table organized by Karen Hedlund, Deputy Administrator for the Federal Railroad Administration.  The round table was held in conjunction with the High Speed Rail Conference held at LA Metro's headquarters in Los Angeles, California.  With the House T&I Committee expected to begin marking up a rail bill, Ms. Hedlund sought ideas about how to expand the Railroad Rehabilitation Improvement Financing credit program to be a more useful source of low cost debt capital for commuter rail projects.  Around for a number of years, RRIF has been ...

Last week the Nevada Department of Transportation (NDOT) conducted a two-day industry workshop at the Golden Nugget Conference Center in Las Vegas, Nevada, for Project Neon, a freeway improvement project on the west side of Las Vegas. More than 200 attendees, including major international developers and local contracting firms, learned about NDOT’s plans to procure the first phase of the project (the P3 Phase) under an availability payment approach where the winning bidder would design, build, finance, operate and maintain the project for approximately a 35-year term. This ...

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 ...

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 ...

On December 27, 2012, the Indiana Finance Authority (IFA) achieved commercial close of the East End Crossing project in southern Indiana, part of the broader Louisville-Southern Indiana Ohio River Bridges Project.  WVB East End Partners, LLC (WVB), is the private counterparty for the East End Crossing project under an availability payment concession, a first for Walsh and VINCI in an equity role in the US P3 market.  The parties reached agreement and executed the public-private agreement before the end of the year as scheduled, capping an extraordinary procurement on an expedited ...

On November 16, 2012, the Indiana Finance Authority (IFA) selected WVB East End Partners (WVB) as the Preferred Proposer for IFA’s East End Crossing project in southern Indiana.  WVB East End Partners is a joint venture consortium of Walsh Investors, LLC, VINCI Concessions S.A.S. and Bilfinger Berger PI International Holding GmbH, partnering with Walsh Construction Company and VINCI Construction Grand Projets as the builders, with Jacobs Engineering Group, Inc. as the designer, and with others.  VINCI Concessions S.A.S. will be performing the operations and maintenance of the ...

Hot on the heels of the financial close of the Presidio Parkway, the first California transportation public-private partnership (P3) availability payment deal and only the fourth in the United States, Federal Highway Administration’s (FHWA) Office of Innovative Program Delivery has issued guidance regarding the eligibility of periodic availability payments for reimbursement from federal aid funds.  Federal-Aid Funding and Availability Payments

Recognizing that availability payment concessions can offer the benefits of enhanced performance and project cost savings ...

Governor Mitch Daniels of Indiana and Senator Jeff Bingaman of New Mexico exchanged comments regarding Indiana’s privatization of 157 miles of toll roads through two articles that appeared in The Washington Post, titled Indiana didn’t ‘sell its toll roads and Taxpayers paying for roads – twice.  This exchange concerns the Senator's proposal to, among other provisions, remove lane miles which are under a long-term PPP lease agreement from the formula which generates federal gas tax dollars to the states.  If Senator Bingaman's proposal were to become law, Indiana's ...

On April 23, 2012, the Indiana Finance Authority (IFA), in coordination with the Indiana Department of Transportation, shortlisted four teams for its East End Crossing (Louisville-Southern Indiana Ohio River Bridges Project) (the East End Crossing) located in Southern Indiana.

The East End Crossing is part of the broader Ohio River Bridges Project in the greater Louisville, Kentucky/Southern Indiana region.  Specifically, the Ohio River Bridges Project will consist in improvements to connecting roadways, but most prominently, provide two new toll bridges across the Ohio ...

Our October 21 blog on managed lanes projects in Southern California talked about how three county transportation agencies are expanding on the success of the SR91 Express Lanes in Orange County, Calif., by using managed lanes to further relieve congestion and improve mobility in the region.  Not to be outdone by its Southern California cousins, the Metropolitan Transportation Commission (MTC), the transportation planning and funding agency for the nine-county San Francisco Bay Area, just received the blessing of the California Transportation Commission (CTC) to develop and ...

Southern California can’t say it’s number one when it comes to having the worst traffic congestion in the country, but it’s a huge economic and social problem for the region which three Southern California transportation agencies are addressing through the use of managed lanes.  That’s what we recently learned at the Women’s Transportation Seminar presentation on October 14, 2011.

On a panel moderated by Rick Backlund, an FHWA region official, we heard from Rose Casey, Program Manager for the Orange County Transportation Authority; Stephanie Wiggins, Executive ...

The National Conference of State Legislatures (NCSL) and the Center for Excellence in Project Finance at the American Association of State Highway and Transportation Officials (AASHTO) recently released the report entitled "Transportation Governance and Finance: a 50-State Review of State Legislatures and Departments of Transportation," and will be hosting a free webinar on June 21 at 2pm ET to present the findings of the study (previewed during a committee meeting in January).

Listening to the webinar and reading the study is a must for anyone who wants to understand how ...

Last week, the North Texas Tollway Authority scored a touchdown by closing on $1 billion of bonds and notes to finance an 11.5 mile extension of the President George Bush turnpike in the Dallas Metroplex, which provides convenient access to the new Dallas Cowboys football stadium.  A major factor in the success of the transaction is the participation of the Texas Department of Transportation in the financial structure.  The project was originally to be procured as a P3 under TxDOT's CDA Program, but state legislation gave NTTA an option to develop and operate the project, for which NTTA ...

Indicative of the progress and forward momentum of the project, the California High-Speed Rail Authority is hiring.  The executive management team is expanding as the project makes advancements such as the recent award of $2.25 billion in federal grants.  With newly appointed CEO Roelof Van Ark at the helm, the Authority is seeking a Regional Director for Southern California to add to the team.

As described in the full position dossier, The Regional Director is responsible for ensuring the high-speed train project in Southern California continues forward on the planned schedule and ...

U.S. Department of Transportation Secretary Ray LaHood has asked Federal Highway Administration Chief Counsel Karen J. Hedlund to serve as Chief Counsel of the Federal Railroad Administration, effective June 29.

Hedlund moves to FRA to help advance DOT's new high-speed and intercity rail development program, one of the Obama Administration's signature initiatives with more than $10 billion already appropriated.  During her tenure at FHWA starting in 2009, Hedlund helped implement the American Recovery and Reinvestment Act, including new investments in highway, intermodal ...

We are pleased to include here the comments of colleague, Allan Ickowitz, Co-Chair of Nossaman's Financial Services and Bankruptcy Practice Group.

Public agency project owners can breathe a sigh of relief over a recent bankruptcy court decision in the Las Vegas monorail case. They will not be held liable for the debts of non profit corporations established to build public infrastructure simply because the corporation was formed on behalf of a public agency.

When the Las Vegas Monorail Company filed a Chapter 11 bankruptcy petition on January 13, 2010, the Ambac Assurance ...

Jeffrey Parker, President of Jeffrey A. Parker and Associates, has worked closely with Nossaman on several projects, including two recent projects in Florida.  We are pleased to include his comments here as a guest to Infra Insight.

The House Subcommittee on Highways and Transit invited me to participate in a hearing on April 14, 2010 on Using Innovative Financing to Deliver Highway and Transit Projects.  As a participant on the panel, I was pleased to share my firm’s experiences with availability payments and answer questions from the Subcommittee Members on the I-595 and Port of ...

State and local strategies to bridge the gap between traditional funding and current needs – which has been referred to as alternative finance – are now becoming mainstream. 

Consider Los Angeles Mayor Antonio Villaraigosa’s plan to speed up the development of LA’s transit infrastructure, which the LA Times reports would include financing from ‘a combination of private financing and bonds, such as Build America Bonds, established in the economic recovery bill to cut interest costs for local and state infrastructure projects.’ 

In fact, this model has already been ...

A week after the Project Finance Awards honored the Florida deals, the Infrastructure Journal Awards honored the Texas DOT’s North Tarrant Express project as its 2009 Global Transport Deal of the Year. The Florida DOT’s I-595 Project was nominated along with one other project for the honor.

The North Tarrant Express was nominated with two other projects for the IJ’s 2009 Global Deal of the Year – which selects from projects in all sectors, including: power, renewables, oil and gas, PPPs, and transport.

Nossaman was nominated along with two other law firms for the 2009 ...

The Port of Miami Tunnel Improvement Project was named the 2009 Global Deal of the Year and the 2009 North American PPP Deal of the Year by Project Finance Magazine

The I-595 Corridor Roadway Improvements Project was named the 2009 North American Transport Deal of the Year

Project Finance Magazine, a leading global infrastructure industry trade publication, announced the honors at its awards ceremony in New York on March 4th and profiles both the Port of Miami Tunnel and I-595 projects in its current issue. Nossaman is honored to have had the opportunity to work on both of ...

It was the best of times, it was the worst of times…  Dickens could have been describing 2009, as the P3 market continued to look strong, notwithstanding the economic downturn. Last year three significant P3 deals reached financial close in the United States: in March the I-595 in Florida, in October the Port of Miami Tunnel also in Florida, and mid-December the North Tarrant Express in Texas. All were remarkable in their own right, and cumulatively earned Nossaman the top spot in Infrastructure Journal’s league tables in the North American Transport P3 legal advisor category.

We take a look back at what made the deals remarkable and what 2010 might bring…

For the 89^th year, January brings new ideas in transportation. The 89^th Transportation Research Board Annual Meeting will be held in Washington D.C., January 10-14. 

Reflecting the theme of Investing in Our Transportation Future – BOLD Ideas to Meet BIG Challenges, Nossaman Partner Geoffrey Yarema will give a presentation titled "P3 Successes and Lessons Learned" on January 10. Nossaman Partner Nancy Smith will give a presentation titled "Public-Private Partnership Update" on January 11. 

We look forward to discussing and learning with others.

California will soon have a new authority that can authorize California transportation agencies to toll transportation facilities, eliminating the need for legislative approval for each tolling project. 

AB 798, a bill sponsored by state treasurer Bill Lockyer and recently signed by Governor Schwarzenegger, creates a new state level agency, the California Transportation Finance Authority, with the limited purpose of issuing revenue bonds for new capacity or improvements to the state transportation system at the request of a public sector project sponsor. Project sponsors ...