Nossaman LLP

Fredric W. Kessler

Partner

T 213.612.7829
F 213.612.7801
777 South Figueroa Street, 34th Floor
Los Angeles, CA 90017

In nearly 40 years with the Firm, Fredric Kessler has gained national recognition as a guiding force for public agencies in the field of transportation public-private partnerships (P3s).  Clients benefit from his vast experience with innovative procurement, project delivery and financing as well as with negotiated agreements.  He is skilled in structuring successful toll concessions, availability payment agreements and design-build and design-build-maintain contracts – and advising on the strategic business decisions behind them.

Helping to advance the nation’s sorely needed infrastructure upgrades through non-traditional methods, Mr. Kessler assisted U.S. Congressional staff in drafting important 2012 changes in federal transportation law that improved and expanded federal credit assistance and tolling programs (MAP-21).  He regularly advises clients on the use of Transportation Infrastructure Finance and Innovation Act (TIFIA) funds and Private Activity Bonds (PABs) to finance their projects and helps them through the application process with the U.S. Department of Transportation.

Mr. Kessler leads or plays an integral role on Nossaman teams assisting major public agencies in creating and implementing P3 programs involving a wide array of award-winning projects.  He has served in this capacity for state transportation departments in Texas, Arizona, California and Washington, as well as the Los Angeles County Metropolitan Transportation Authority.

Representative Work

  • Arizona Department of Transportation – P3 Program.  Leader of the legal team advising on development of the transportation agency's P3 program covering new toll facilities, managed lanes, transit and other transportation facilities, as well as other projects.  Mr. Kessler’s services include counseling on legislative amendments, initial project screening and feasibility assessments and implementation of procurements for projects that prove feasible. 
  • Arizona Department of Transportation – South Mountain Freeway.  Leader of the legal team advising on all aspects of a procurement for the first highway project developed under Arizona’s P3 statute – a 22-mile, eight-lane greenfield freeway project in the Phoenix area featuring three general purpose lanes and an HOV lane in each direction, a major interchange with the I-10, and connections with 14 urban arterial streets.  Mr. Kessler guided ADOT in its successful February 2016 procurement of an innovative DBM contract with a fixed design and construction price of $916 million, plus 30 years of routine and capital maintenance at a fixed price of $132 million (2015 dollars).  Thanks to the agreement’s innovative approach, ADOT captured immediate capital cost savings of $122 million with potential total savings in the range of $300 million.  The largest single contract in ADOT’s history, the freeway development is also the agency’s first DBM project and the longest-term DBM contract to date in the U.S. transportation sector.  Besides serving in a key role for all steps in the procurement, Mr. Kessler advised on advising on determination of risk allocations, a comparative quantitative and qualitative assessment of several project delivery alternatives, financial structuring, various other legal and commercial issues, and an RFI together with an industry forum.  Project construction is expected to begin in September 2016, and the freeway is expected to open by late 2019.
  • Arizona Department of Transportation – Flagstaff Facilities.  Co-leader of the legal team advising on a project to replace the transportation agency’s Flagstaff DMV and maintenance facilities.  In a unique partnership with the City, ADOT solicited P3 proposals to relocate and consolidate its offices into newly built or existing facilities.  This move will reduce agency costs while vacating land for commercial development.  In exchange, the private partner would secure ownership of the agency’s existing site plus an adjacent parcel owned by the City, for a total of 18 acres.  The deal will provide ADOT new facilities with little or no out-of-pocket costs.  The agency has entered into a pre-development agreement with a developer it selected in 2013.
  • Arizona Department of Transportation – Rest Area P3s.  Co-leader of the legal team advising on this procurement and contract covering the management of 14 Arizona rest areas under a single P3.  The private company under the contract with ADOT will maintain and operate the rest areas for five years and implement a sponsorship and advertising program to generate revenue.  The company will introduce amenities such as Wi-Fi access, dog-walking areas, charging stations for electric vehicles and ATM machines.  The contract guarantees ADOT at least $1 million over the next 10 years from revenues generated from advertising and sponsorships – money that will go into the State Highway Fund for other transportation projects.  Project completion is anticipated in 2017.
  • Texas Department of Transportation – Comprehensive Development Agreement.  Key member of the legal team serving as special counsel to TxDOT on its leading P3 program.  Mr. Kessler’s services include leadership and assistance with procurement, contract documents, concession agreements, DBOM contracts, tolling services agreements, innovative financing arrangements (including applications to the federal TIFIA credit assistance program) and federal issues.
  • Texas Department of Transportation – North Tarrant Express Segments 1 & 2W.  Key member of the legal team that advised on first phase of a project to dramatically improve mobility in the growing Dallas/Fort Worth region.  Segments 1 & 2W comprise a 13-mile, $2.05 billion piece of the larger $5.1 billion North Tarrant Express P3 – a project that will fix existing highway infrastructure and double existing road capacity with a combination of general purpose lanes, continuous frontage roads and managed toll lanes along a 36-mile corridor in Dallas and Tarrant counties.  The toll lanes are using dynamic pricing to keep traffic moving at 50 mph.  Financing includes $573 million in public funds, $426 million in developer equity, a $650 million TIFIA loan and $400 million in PABs.  The segments, along I-820 and SH 121/183, opened in October 2014 – six months ahead of schedule.   Mr. Kessler assisted with procurement and drafting of the 52-year toll concession comprehensive development agreement and a pre-development agreement with a Cintra/Meridiam joint venture.   The project captured several awards including Infrastructure Journal’s “Global Transport Deal of the Year” in 2009, “P3 Co-Project of the Year” from the American Road and Transportation Builders Association in 2010, and “Best of the Best” in the “Highway/Bridge” category from Engineering News-Record in 2016. 
  • Texas Department of Transportation – North Tarrant Express Segments 3A & 3B.  Key member of the legal team advising on the second phase of an innovative highway improvement and managed lanes P3 to alleviate heavy congestion in the Dallas/Fort Worth area.  Nossaman helped negotiate a 2013 concession agreement with a Cintra/Meridiam joint venture for the $1.5 billion Segments 3A & 3B portion, which rebuilds general purpose lanes and adds two tolled options for 10 miles along I-35W from I-30 to U.S. 81/287 – doubling the capacity of the existing roadway.  Financing includes $430 million in developer equity, a $531 million TIFIA loan, $274 million in PABs and $127 million in public funds from TxDOT and the North Central Texas Council of Governments.  Construction is expected to be completed in 2018.  Infrastructure Investor magazine named the project “North American Transport Deal of the Year” in 2014.  Mr. Kessler assisted with negotiation and drafting of the toll concession comprehensive development agreement.
  • Texas Department of Transportation – LBJ Express.  Key member of the legal team that advised on a critical project to ease pressure on a congested 17-mile corridor along the IH-635 and IH-35E in the Dallas Metropolitan area.  Nossaman guided procurement of a DBFOM toll concession agreement with a Cintra/Meridiam joint venture for the $2.7 billion upgrade, one of the largest P3 undertakings in U.S. history.  The project includes four main lanes and two to three continuous frontage road lanes in each direction that use congestion pricing to keep traffic moving at 50 mph.  LBJ Express, the first transportation upgrade to receive federal tolling authorization under the Express Lanes Demonstration Program, reached financial close ahead of schedule and was completed in 2015.  Financing included $490 million in public funds, $672 million in developer equity, an $850 million TIFIA loan, and $606 million in PABs.  The American Road and Transportation Builders Association named LBJ Express “P3 Co-Project of the Year” in 2010.  Mr. Kessler assisted with issue analysis and resolution and helped draft the contract documents.
  • Texas Department of Transportation – SH 130, Segments 5 & 6.  Lead attorney who advised on the first toll concession agreement in Texas history – a 41-mile stretch of managed lanes between San Antonio and Austin.  The $1.36 billion roadway, which opened ahead of schedule in late 2012, extended the SH 130 portion of the Central Texas Turnpike Project south to Austin-Bergstrom International Airport via a DBFOM contract with a Cintra/Zachry joint venture.  Financing included $683 million in commercial debt, $197 million in private equity and a $430 million TIFIA loan.  The project netted several honors including the Federal Highway Administration’s 2011 “Excellence in Utility Relocation and Accommodation Award” in the incentives category and Project Finance magazine’s 2008 “Transportation Deal of the Year.”  Mr. Kessler served as a key contract negotiator for the client, recommending negotiating positions and issue resolutions and drafting contract documents.
  • Texas Department of Transportation – Tolling Service Agreements.  Assisted TxDOT with negotiation of various agreements with the North Texas Tollway Authority for tolling services and related collateral arrangements for TxDOT’s projects in the Dallas-Ft. Worth region.  The NTTA provides tolling services throughout the region.  Mr. Kessler’s work includes advising on agreements for back-office services for the North Tarrant Express, LBJ Express and DFW Connector projects.
  • California Department of Transportation – Presidio Parkway.  Key member of the legal team advising on this $1.1 billion project to rebuild a spectacular natural gateway connecting the Golden Gate Bridge with the City of San Francisco.  The parkway, which traverses an environmentally sensitive national park and a national historic landmark district, is the first procurement under California’s P3 law and only the third highway project developed under an availability payment P3 in the U.S.  Mr. Kessler advised on the DBFOM procurement and contract documents with a Hochtief/Meridiam joint venture.  He also helped structure the contract terms and financing arrangement including a successful application for a $150 million TIFIA loan.  Project funding also included $45.6 million in equity and $166.6 million in senior bank loans.  Among other duties, he helped negotiate two vital amendments to the contract.  The project, which opened to traffic in July 2015, captured many honors.  In 2012, it won "Americas P3 Deal of the Year" from Project Finance International; "North American P3 Deal of the Year" from Project Finance magazine; "P3 Project of the Year" from the American Road and Transportation Builders Association; and "Best Real Estate Deal of the Year, Infrastructure/ Public-Private Partnership" from San Francisco Business Times.  In 2013, P3 Bulletin named it a finalist for "Best Transport Project of the Year,” and in 2016 the National Council for Public-Private Partnerships honored it with the “Infrastructure Project Award.”
  • Washington State Department of Transportation – Tacoma Narrows.  Lead special counsel advising the transportation agency on procurement of a new toll bridge over the South Puget Sound, the second Tacoma Narrows Bridge, as well as highway improvements at the approaches and seismic strengthening of the existing bridge.  The $849 million project, initially procured through a pre-development agreement, was the first major suspension bridge in the U.S. in 30 years.  In 1999, the Department and the Bechtel-led developer entered into a DBFOM pre-development agreement for the bridge.  However, a state court decision on the project and new legislation resulted in a renegotiated implementation phase agreement which took the form of a $615 million fixed-price design-build contract – the state’s first major design-build transportation deal.  The award-winning bridge, which opened on time and within budget in 2007, paved the way for a sophisticated design-build program that WSDOT continues to rely on for important capital improvement procurements.  Mr. Kessler negotiated and drafted the original DBFOM agreement and the ultimate design-build contract for completion of the project.
  • Washington State Department of Transportation – Innovative Partnerships Program.  Key member of the legal team that negotiated five precedent-setting agreements for private financing and development of transportation infrastructure projects.  These projects addressed some of the state’s largest and most pressing transportation needs, including planning for the SR 520 floating bridge replacement, park-and-ride lots on the I-5 for the Puget Sound region, and the Tacoma Narrows Bridge project.  Mr. Kessler worked closely with the client and other advisors to develop template agreements while simultaneously negotiating and drafting individual P3 contracts.  The template comprehensive agreement was the forerunner of modern P3 agreements now used throughout the U.S.
  • Virginia Department of Transportation – Pocahontas Parkway (SH 895).  Key member of the legal team that advised the transportation agency on the original $353 million nonprofit corporation financing of the Pocahontas Parkway and the related design-build and long-term operations and maintenance contracts.  The Parkway, an 8.8-mile bypass around Richmond, Virginia which includes the high-level Vietnam Veterans Memorial Bridge over the James River, was the state’s first procurement under its P3 program.  The project, which featured the region’s first electronic toll collection system, opened in 2002.  In 2006, Mr. Kessler helped VDOT negotiate and close an asset transfer and refinancing of the Parkway.  The 99-year, $611 million concession agreement with a private operator, Transurban LLC, allowed the agency to recoup its investment, eliminate future liability and obtain a commitment to build and finance an extension to the Richmond airport which opened in 2011.  Pocahontas Parkway won several honors including the 2003 “Infrastructure Award” from the National Council for Public-Private Partnerships.
  • Metro Gold Line Construction Authority – Gold Line LRT.  Special outside counsel in the joint development of parcels at four rail stations and the implementation of the Authority’s fiber-optic leasing program.  The agency entered into a program to generate revenues from station-site joint development and a fiber-optic transaction to support issuance of debt critical to financing rail transit construction.  Mr. Kessler’s role involved preparing RFPs; negotiating site purchase, sale agreements and CC&Rs; and preparing detailed contract provisions on coordination with freight rail operations within the rail corridor extending from Los Angeles through eastern Pasadena.
Fredric W. Kessler
Bio Photo

Practices

Education

J.D., University of California, Hastings College of the Law, 1978, Order of the Coif

B.A., Wesleyan University, 1974, magna cum laude

Admissions

California

Professional Affiliations

Women's Transportation Seminar: Los Angeles Chapter

American, California and Los Angeles County Bar Associations: Real Property Sections

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