U.S. Department of Transportation Announces a $628.93 Million Loan to Orange County Transportation Authority Toward Funding the I-405 Improvement Project
WASHINGTON – U.S. Transportation Secretary Elaine L. Chao today announced that the Department of Transportation’s Build America Bureau (Bureau) will provide up to a $628.93 million Transportation Infrastructure Finance and Innovation Act (TIFIA) loan to the Orange County Transportation Authority (OCTA), at 2.91% with a term of 35 years after substantial completion for the I-405 Improvement Project (Project). The TIFIA loan represents 33% of eligible project costs totaling $1.91 billion.
The I-405, a major highway in Southern California, is a major link between Los Angeles, Orange, and San Diego counties. It is also an essential part of the National Highway System and an integral part of the FHWA’s Primary Freight Network offering direct access to the Port of Los Angeles and Port of Long Beach, two of the busiest ports in the nation.
The Project will be built on a 16-mile corridor in northwest Orange County on the I-405 (the San Diego Freeway) between State Route 73 (SR-73) and Interstate 605 (I-605). Once complete, it will add one new General Purpose (“GP”) lane and one new toll lane in each direction. The new tolled express lanes will combine with the existing high occupancy vehicle (“HOV”) lanes to create two Express Lanes in each direction in the I-405 median from SR 73 to I-605. The Project will also replace 18 bridges, and includes the construction of new and widened bridges, improvements to the auxiliary lanes, utility relocations, new sound walls, and additions to the tolling and Transportation System Management and Transportation Demand Management systems.
According to OCTA, the project will create approximately 42,000 jobs during construction, improve safety, reduce congestion and emergency access time to highway incidents, and reduce annual vehicle hours of delay along the corridor by two million hours in the opening year.
OCTA has stated that a TIFIA secured loan is critical to ensuring its ability to secure the entire funding amount required to construct and maintain the Project. Over its 35-year life, OCTA estimates that the TIFIA loan will save OCTA about $300 million, and will also ensure accelerated delivery of the Project using the design-build model. Without the TIFIA loan, it is likely that the Project could be delayed.
“By leveraging loans from the Bureau, projects like the I-405 Improvement Project can advance at a faster pace than by simply relying on traditional sources of funding,” said Marty Klepper, Executive Director of the Bureau. “The Bureau is committed to working with project sponsors nationwide to streamline financing and provide technical assistance to get projects completed.”
The Bureau, which administers the TIFIA credit program, was established as a “one-stop shop” to streamline credit opportunities, while also providing technical assistance and encouraging innovative best practices in project planning, financing, delivery, and monitoring. To date, the TIFIA credit program has closed $28.3 billion in financings, supporting $102.5 billion in rail, highway and transit projects across the country.