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United States Department of Transportation United States Department of Transportation

Downtown / Midtown Tunnel

Downtown / Midtown Tunnel
Alternate Project Name
MLK Extension
Project Type
Roads and Bridges
Financing Type
TIFIA
Status
Credit Agreement Executed
Sponsor/Borrower
Virginia Department of Transportation (VDOT), Elizabeth River Crossings Opco, LLC (ERC)
Project Description

The Downtown Tunnel / Midtown Tunnel / MLK Extension consist of five components of construction, involving three facilities in the Hampton Roads region of Virginia. The Midtown Tunnel portion consists of a new two-lane tolled tunnel under the Elizabeth River parallel to the existing Midtown Tunnel connecting the Cities of Norfolk and Portsmouth as well as modifications to the existing tunnel to provide increased capacity for east-west travel linking Route 58 and I-264 in Portsmouth to the interchange at Brambleton Avenue/Hampton Boulevard in Norfolk. Modifications to the interchange are also planned. The MLK Extension portion of the project consists of extending U.S. Route 58 south from London Boulevard, approximately 0.8 mile to I-264 with an interchange at High Street.

The $2.1 billion project will be built on a design, build, finance, operate, and maintain (DBFOM) concession basis by ERC comprised of Skanska Infrastructure Development and Macquarie Group.

According to the project sponsor, the local population and the existing Midtown Tunnel usage have increased nearly 70 percent and 600 percent, respectively, since the Midtown Tunnel was initially introduced. Such rapid growth has left the area without adequate transportation options. The Downtown / Midtown Tunnel project will accommodate this need with the improvement of the existing Midtown Tunnel, extension of the existing MLK Freeway, and the addition of the Downtown Tunnel. Once completed, the project is expected to generate an average travel time savings of approximately 15 minutes per trip, savings valued at approximately $3.2 billion annually. It is also expected to generate 15,000 direct and indirect induced jobs and a total economic impact of approximately $254 million. The project will also add substantial safety improvements to eliminate 86 crashes per 100 million miles traveled and bring the facilities into compliance with current fire and life safety standards.

Project Details
TIFIA Assistance
$422.00M
Primary Revenue Pledge
User Charges
Project Cost
$2089.00M
Fiscal Year Closed
FY2012
Duration/Status
The Comprehensive Agreement with ERC was signed in December 2011 (commercial close). Construction started in mid-2012; substantial completion occurred during 2017.
Funding Sources
Senior Debt (Private Activity Bonds): $675M
TIFIA Loan: $422M
Equity Contributions: $272.3M
Public Funds: $308.6M
Toll Revenues: $368.2M
TIFIA Capitalized Interest: $42.6M
Project Delivery/Contract Method
DBFOM (Design-Build-Finance-Operate-Maintain)
Project Participants
Elizabeth River Crossings Opco, LLC, Skanska Infrastructure Development. Inc., Macquarie Financial Holding Limited, Skanska USA Civil Southeast, Inc. - Construction Joint Venture (design-build members), Kiewit Construction Company - Construction Joint Ven
Project Advisers/Consultants
Project design:

Parsons Brinckerhoff
Volkert & Associates, Inc.
COWI
Systems Support
Transdyn
Federal Signal - ETC design, installation, O&M
To the Borrower:

Macquarie Capital Funds Inc. - Finance
Steer Davies Gleave - Traffic & Revenue
McGuireWoods Consulting - Public Affairs
Orrick, Herrington & Sutcliffe - Borrower's Legal Counsel
Hunton & Williams - Borrower's Local Counsel
PBS&J - Intelligent Transportation Systems OR Colan Associates - Right of Way
Arup - Equity TA/Asset Condition Survey
Atkins - Lender's TA and Traffic Advisor
Marsh - Insurance
To USDOT TIFIA JPO:

TIFIA Legal Advisor - Katten Muchin Rosenman LLP
TIFIA Financial Advisor - Scully Capital
Project Lender
Bondholders, USDOT TIFIA
Credit Assistance Detail
Direct loan: $422 million; the TIFIA loan will be repaid with toll revenues.
Financial Status
TIFIA credit agreement was executed in April 2012. Interest payments are expected to begin in 2022 and principal payments are expected to begin in 2037; final loan maturity is expected to occur in 2047.
Innovations
Virginia's Commonwealth Transportation Board issued its first GARVEE bonds under the Commonwealth of Virginia Federal Transportation Grant Anticipation Revenue Notes Act of 2011 to provide the public subsidy to support the project's private financing.
Application Details
Applicant
Elizabeth River Crossings LLC (ERC)
LOI Fiscal Year Received
FY2011
LOI Received Date
Application Received Fiscal Year
FY2012
Application Received Date
Estimated Project Cost
$2000.00M
TIFIA Request
$422.00M
Instrument Type
Direct Loan