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South Bay Expressway

Southbay
Project Type: 
Roadways and Bridges
Sponsor / Borrower: 
Caltrans
South Bay Expressway L.P. - Original Borrower
San Diego Association of Governments (SANDAG) - Current Borrower
Credit Agreement Status: 
Retired/Sold
TIFIA Assistance: 
Primary Revenue Pledge: 
User Charges
Project Cost Details: 

$658 million

Duration / Status: 

The project opened to traffic in November 2007.

Fiscal Year Closed: 
FY2003
Project Description: 

The South Bay Expressway (SBX) toll road (the SBX Project) is a 9.2-mile, privately-developed southern extension of SR 125, extending from San Miguel Road in Bonita, CA near the Sweetwater Reservoir to SR 905 in Otay Mesa, near the International Border. The SBX Project connects the only commercial port of entry in San Diego to the regional freeway network. This project, made possible through an innovative public-private partnership (P3), completes the missing link in San Diego's third north-south freeway corridor.

The SBX Project was developed pursuant to California's AB 680 legislation passed in 1989. Under the original franchise agreement, the private developer raised capital for the Project and constructed the road in exchange for a 35-year toll concession. Caltrans owns the highway, but leases the road back to the franchisee. Currently, SANDAG has the franchise, under an amended agreement executed when the toll road was sold to SANDAG in December 2011. Control will revert back to Caltrans in 2042.

The SBX Project connects Otay Mesa, the largest area of industrial-zoned land in San Diego County, with eastern Chula Vista and points north and east. The increased access between industrial, commercial, and residential areas has created value for manufacturing companies and its employees by reducing shipping time to local markets and by providing a less congested and more direct commuter option The SBX Project also utilizes an optional electronic tolling system, FasTrak, giving drivers the option to avoid stoppages at toll booths and to maintain steady driving speeds. Additionally, low tolls draw traffic to SBX, thereby relieving congestion on I-805 and nearby surface streets.

Funding Sources: 
  • Bank Debt: $340M (backed by toll revenues)
  • TIFIA Loan: $140M (backed by toll revenues)
  • Donated Right of Way: $48M
  • Investor Equity: $130M
Project Delivery / Contract Method: 

35-year Build-Transfer-Operate franchise with the State of California that allows the franchisee to set market rate tolls.

Project Participants: 
South Bay Expressway, L.P. (SBX LP), formerly owned by Macquarie 125 Holdings, Inc.
Macquarie Infrastructure Partners
Project Advisors / Consultants: 

Nossaman, Guthner, Knox & Elliott, LLP - Special Counsel to SBX

Milbank, Tweed, Hadley & McCloy, LLC - Legal Counsel to SBX

Salomon Smith Barney - Financial Advisor to SBX

Parsons - Construction Manager

Orrick, Herrington & Sutcliffe LLP - Lenders' Legal Counsel

Wilbur Smith Associates - Borrower's Traffic Consultant

AECOM/Maunsell - Tolling Advisor to SBX

Louis Berger - Lenders' Traffic Advisor

ARUP - Lenders' Technical Advisor

USDOT TIFIA JPO Advisors

  • TIFIA Financial Advisor: Montague DeRose and Associates, LLC/TransTech Management, Inc.
  • TIFIA Legal Counsel: Nixon Peabody LLP
Project Lender(s): 
Bank Lenders
USDOT TIFIA
TIFIA Credit Assistance Detail: 

Direct Loan: $140 million

The TIFIA loan is secured by a priority security interest in all project collateral, including, but not limited to: (a) all income, tolls, revenues, rates, fees, charges, rentals, or other receipts derived by or related to the operation or ownership of the project including all amounts from joint development or leasing of air space lease rights; (b) any revenues assigned to the Borrower and proceeds of the sale or other disposition of all or any part of the project; and (c) all income derived from permitted investments. The TIFIA loan is also secured by a mortgage on the Borrower's leasehold interest in the real estate underlying the toll road right of way.

Financial Status: 
Financial close and execution of the TIFIA credit agreement occurred in May 2003. On March 22, 2010, the privately owned toll road operator and TIFIA borrower, SBX LP, applied for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The reorganized company, SBX LLC, emerged from bankruptcy on April 28, 2011. The toll road was sold to SANDAG in December 2011. On November 21, 2017, SANDAG repaid all outstanding TIFIA indebtedness.
Innovations: 
  • $140 million TIFIA loan was the first-ever provided to a private toll road development and the first with bank debt and private equity.
  • The original TIFIA debt service repayment structure was sculpted with mandatory and scheduled components.
Project Contacts: 

South Bay Expressway 
info@southbayexpressway.com 
Tel: (619) 710-4021

Samuel Johnson 
Director of Operations 
619-710-4021 
samuel.johnson@sandag.org 
1129 La Media San Diego, CA 92154

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