Five Points Business District Streetcar Coordination Plan
program provides credit assistance to eligible surface transportation projects, including highways and transit. Four types of financing are provided:
Secured Loans – direct loans with flexible repayment terms and providing combined construction and permanent financing – up to 49% of project cost.
Loan Guarantees – full-faith and credit loan guarantees by Federal government to institutional investors – up to 49% of project cost.
Lines of Credit – contingent sources of funding in form of loans that may be drawn down during first ten years of construction – up to 33% of project cost.
Master Credit Agreements – contingent commitment of future TIFIA assistance for a program of projects secured by a common revenue pledge.
TIFIA loans must be repaid through dedicated funding sources that secure the obligation, such as tolls, user fees or tax increment financing, and are for up to 35-year terms. The best local examples of TIFIA use are on the US 36 Bus Rapid Transit project, which received a $54 million TIFIA loan for construction, RTD’s Eagle P3 rail project, which received a $280 million TIFIA loan, and Denver Union Station, which received a $146 million TIFIA loan. TIFIA loans have generally been used for roadway projects and for major transit projects (for example, to accelerate the Los Angeles region’s major transit expansion project). It has not yet been used for a streetcar project, though the Kansas City streetcar project is considering applying for a TIFIA loan to help pay for its construction. TIFIA loans are seen as financing tools with attractive ra tes and terms. A TIFIA loan is flexible and low cost: it can finance a major portion of a project at US Treasury rates. This program was expanded from $122 million in Fiscal Year 2012 to $750 million in FY 2013 and $1 billion in FY 2014. I
In addition to innovative financing mechanisms, there are other tools that are associated with Public-Private Partnerships (P3s) that could also provide additional tools to reduce the cost of borrowing or speed project delivery. An availability payment is a rent-like payment where a concessionaire receives periodic payments based solely on the condition and/or performance of the facility. In some cases, such as the Miami Port Tunnel, the concessionaire will be paid milestone payments during construction and availability payments over the life of the contract. Increasingly common for transportation infrastructure, availability payments are a mechanism for public infrastructure sponsors to share risk with private contractors. A typical availability payment deal would involve construction of the asset by a private firm or consortium of firms. The consortium may be responsible for any or all of the following: planning, design, engineering, right-of-way acquisition, construction, operations, maintenance, and enforcement. In return, the consortium is paid fixed, pre-agreed availability payments on certain milestone dates. The availability payments are subject to the asset being operational, safe, and meeting all standards of the public
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