Project Overview

U.S. 36 is a four-lane divided highway that connects the City of Boulder to Denver, Colorado at its intersection with I-25. The U.S. 36 Managed Lanes / Bus Rapid Transit (BRT) Project involves approximately 15 miles of improvements in the corridor, including the addition of one high-occupancy toll (HOT) lane in each direction; reconstruction of the general purpose lanes; replacement of eight bridges; accommodations for BRT service and associated transit station improvements; a bikeway; and installation of Intelligent Transportation System equipment.

The project is being delivered in two phases. Phase 1 covers the first 10 miles of the project from Denver to Louisville/Superior, and is being delivered under a design-build contract. Phase 2, covering the additional five miles to Table Mesa/Foothills Parkway in Boulder, is being delivered under a design, build, finance, operate, and manage (DBFOM) public-private partnership (P3) with Plenary Roads Denver Ltd. (PRD). Under the 50-year concession agreement, PRD will also be responsible for operations and maintenance on both Phase 1 of the U.S. 36 project and the existing I-25 Express Lanes, and will collect and retain the toll revenues from all of the managed lane facilities. The estimated total capital cost for Phases 1 and 2 is $511 million.

Project History

The Boulder-Denver Turnpike (U.S. 36) opened to traffic in 1952 as a four-lane toll road. Tolling ceased in 1968 shortly after the early repayment of the facility’s underlying toll revenue bonds. Originally built with just one interchange along its 18.2-mile length, it now has 10 access points and has become increasingly congested due to rapid population growth in the region.

Planning and environmental studies conducted by Colorado Department of Transportation (CDOT) in the late 1990’s and 2000’s explored options for expanding capacity on U.S. 36. Those studies identified a $1.3 billion Preferred Alternative including two new managed lanes in the corridor, BRT system improvements, extensive bridge repair or replacement, and auxiliary lane additions between most interchanges. However, due to funding limitations, the Record of Decision issued jointly by FHWA and FTA in December 2009 covered only an initial $550 million package of improvements that would be financially feasible within the region’s fiscally constrained 2035 long-range plan.

Because the funding identified for the project was available primarily in the out years of the long-range plan, CDOT began looking for alternative options to accelerate the project’s implementation. It sought funding from the U. S. Department of Transportation under the first round of the TIGER discretionary grant program in 2009, and was awarded a $10 million challenge grant that could be applied toward the subsidy cost of a loan under the TIFIA Federal credit program and other project costs. CDOT, which had not initially sought TIFIA credit assistance, was able to take advantage of this opportunity, and by early 2011 had secured both a $54 million TIFIA loan and additional funding commitments from the Denver Regional Transit District (RTD), the Denver Regional Council of Governments, and the state to finance Phase 1 of the project. CDOT selected a design-build contractor for Phase 1 in early 2012.Construction began in July 2012, and the project is expected to open in January 2015.

In February 2012, CDOT/High-Performance Transportation Enterprise (HPTE) also began exploring P3 options for Phase 2 of the project by issuing a Request for Qualifications for a DBFOM concession.  A final Request for Proposals was released in late 2012 to three shortlisted bidders, and the concession was awarded to PRD in April 2013, reaching commercial close in June 2013 and financial close in February 2014.Construction began in late 2013 and achieved full operation in 2016.  PRD assumed operation of the I-25 Express lanes in March 2014.

Project Financing and Delivery

The estimated total cost of Phase 1 is $306 million. The project is drawing on a variety of direct public funding sources, including $112 million from dedicated regional transit sales taxes; $51.4 million in Federal funds (including CMAQ, STP, and TIGER grant funds); $41.4 million in CDOT funds; and $5.5 million from local governments. The Colorado Bridge Enterprise has also dedicated $41.5 million from a previous sale of Build America Bonds (BABs) to the project (the BABs are backed by a special bridge safety surcharge on vehicle registrations in the state).   Additional project financing was obtained through a $54 million TIFIA loan backed by toll revenues generated on the managed lanes.

The total cost of Phase 2 is $205 million.  Public funds will cover $75.2 million of this cost, including $25.6 million in direct expenditures by CDOT/HPTE and $49.6 million in payments to PRD during the construction of Phase 2. Revenue sources for these public funds include $15 million in Federal funds; $18.9 million in state funds; $30.5 million from dedicated regional transit sales taxes; and $10.8 million in local government funds. PRD’s additional financing sources for its portion of the project costs include a $60 million TIFIA loan; a $20 million Private Activity Bond issue: a $20.6 million commercial loan; $20.6 million in equity from the partners in the concession; and $12 million in toll and other revenues that will be received from operating the I-25 Express Lanes and the Phase 1 managed lanes while Phase 2 is under construction. The TIFIA Phase 2 loan is secured by a net pledge of revenues from the I-25 Express Lanes (existing) and the U.S. 36 Phase 1 (upon the transfer to PRD) and Phase 2 managed lanes. PRD also will assume the TIFIA Phase 1 loan at substantial completion of Phase 1 when responsibility for that segment is transferred from HPTE to PRD. PRD will operate and maintain the U.S. 36 managed lanes (Phases 1 and 2) and the existing I-25 Express Lanes until 2065.