Financial Close Reached on $1.1 Billion Presidio Parkway Project
LOS ANGELES (June 14, 2012) – The California Department of Transportation ("Caltrans") announced today that, in cooperation with the San Francisco County Transportation Authority, financial close has been reached on the Presidio Parkway Project public-private partnership ("P3"). A Nossaman team, led by Barney Allison, advised Caltrans on the procurement, financing and contracts for the project. The $1.1 billion deal will be the first transportation P3 in California under the recently enacted P3 statute, Streets and Highways Code section 143, and only the third highway project developed through an availability payment structure.
Caltrans entered into an agreement with Golden Link Concessionaire, LLC, a consortium led by Hochtief PPP Solutions North America and Meridiam Infrastructure North America, to design, build, finance, operate and maintain the Presidio Parkway for 30 years. The P3 delivery method allows the project to proceed when limited state money is available through conventional means. The P3 will reduce construction costs, transfer financial risks to Golden Link, free up state funding for other uses, and ensure a high-level of maintenance during the 30-year contract. Funding for the project includes a combination of equity, bank debt and TIFIA loans.
"Caltrans should be applauded for its efforts to improve access to the Golden Gate Bridge with little financial impact on the citizens of California," said Geoffrey Yarema, Chair of Nossaman's Infrastructure Practice Group. "This project proves that California can make needed transportation improvements using P3s and demonstrates the true value of a P3 delivery method."
The Presidio Parkway Project will replace iconic Doyle Drive, which is the southern access point to the Golden Gate Bridge and travels through the Presidio of San Francisco and the Golden Gate National Recreation Area. The improvements include seismic upgrades, two sets of short tunnels, a wide landscaped median, enhanced pedestrian accommodations and improved traffic transitions into city streets. The project successfully overcame litigation challenges at the Alameda County Superior Court, 1st District Court of Appeal and California Supreme Court where opponents tried to stop the project as a P3. The litigation ended on Nov. 16, 2011 after almost a year and enabled the P3 to reach financial close. Nossaman represented the San Francisco County Transportation Authority on the litigation matters.
Caltrans worked together with the San Francisco County Transportation Authority, Presidio Trust, the Golden Gate Bridge Highway Transportation District, the Metropolitan Transportation Commission and the Federal Highway Administration to complete the P3.