Overview

In nearly 40 years with the Firm, Fred 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, Fred 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.

Fred 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.

Experience

Experience

Arizona Department of Transportation – P3 Program.  Leader of the legal team advising on development of the transportation agency’s P3 program.  Fred’s services include counseling on legislative amendments, initial project screening, federal laws, regulations and programs, feasibility assessments and implementation of procurements for projects that prove feasible.  Fred’s work has included the following:

  • I-17 Flex Lanes Project.  Leader of the legal team advising the Arizona Department of Transportation on this estimated $320 million project to add lanes along 23 miles of I-17 between Anthem Way and Sunset Point. ADOT will deliver the project under its public-private partnership procurement statute, and may procure a design-build-operate-maintain contract. Construction is scheduled to begin by 2021 and be completed in 2023. The improvements to I-17 north of Phoenix are one of the state’s transportation priorities because that area regularly experiences heavy congestion due to increased weekend traffic and traffic incidents. Flex lanes along 8 miles of I-17 north of Black Canyon City will operate as a separate two-lane facility to carry one direction of traffic at any one time depending on need, with movable gates at both ends to control access. The flex lanes will carry heavier northbound I-17 traffic during weekdays and Saturday and southbound traffic on a Sunday. They also could provide extra lanes in one direction if an incident closes the regular I-17 lanes in the area between Black Canyon City and Sunset Point.
  • 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.  Fred 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, Fred 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 began in September 2016, and the freeway is expected to open by late 2019.
  • 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 – a move that 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 entered into a pre-development agreement with a developer it selected in 2013 and signed a fully negotiated implementation agreement in 2018.
  • Rest Area P3s.  Co-leader of the legal team which advised on this procurement and contract covering the management of 14 Arizona rest areas under a single P3.  The contract with ADOT has a five year term with an ADOT option to extend an additional five years.  The private company is responsible to maintain and operate the rest areas and implement a sponsorship and advertising program to generate revenue.  The company introduced amenities such as Wi-Fi access, dog-walking areas, charging stations for electric vehicles and ATM machines.  The contract guaranteed ADOT at least $1 million over 10 years from revenues generated from advertising and sponsorships – money that goes into the State Highway Fund for other transportation 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.  Fred 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. Presidio Parkway, 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.

City of Los Angeles – Convention Center Expansion.  Co-leader of legal term serving as special counsel for the City’s sole source, exclusive negotiation of a DBFOM contract to expand and renovate the Los Angeles Convention Center.  The project will add approximately 340,000 square feet of exhibit, meeting room, multi-purpose, back of house and other space and new parking facilities, as well as modernize existing buildings and systems.  The City plans to use an availability payment or potentially a hybrid availability payment and project revenue compensation structure.  Fred is assisting with negotiating strategies, issues analysis and preparation of contract documents.

Los Angeles County Metropolitan Transportation Authority.  Key member of legal team currently advising LA Metro and its Office of Extraordinary Innovation on implementation of its P3 program.  Fred’s work has included the following:

  • Legal Framework – Prepared a complete analysis of federal and state laws, including Public Contract Code §§22160 et seq. and Government Code §§5956 et seq., affecting LA Metro’s P3 procurement and contracting authority for transit and highway projects, as well as federal and state tolling laws.
  • Organizational Structure – Assisted with analysis and advice to LA Metro on best practices and steps for effectively structuring LA Metro’s internal organization to take advantage of P3 delivery opportunities, including advice on a policy statement; procedures for screening and selecting candidate projects; adapting CEQA/NEPA, conceptual and preliminary engineering scopes of work to maintain opportunities for later private sector innovation; interdepartmental P3 training; and organization of a P3 steering committee.
  • Union Station Commercial Development – Lead legal advisor on the upcoming procurement of an exclusive negotiating agreement (ENA) for potential major commercial development of LA Metro and City of Los Angeles properties near LA Union Station. Services include assisting with organizing an industry forum and meetings with major industry players to gauge interest in the project and with preparing an RFQ for the ENA.
  • El Monte Transit Station Commercial Development – Lead legal advisor on the upcoming procurement of an ENA for potential commercial development of the LA Metro/Caltans site for the El Monte Transit Station. Services include assisting with preparing an RFQ for the ENA and the form of ENA.
  • Grand Central Square Joint Development – Lead legal advisor in all legal aspects of LA Metro’s involvement in the $42 million, privately held mixed use project located adjacent to the Red Line's Hill Street station in downtown Los Angeles.  Fred negotiated and prepared a complex set of agreements governing the financing, renovation, construction, leasing and operation of the project, including subsequent modifications. The transaction included revenue sharing for LA Metro and promoted a private project important to urban revitalization, air quality attainment, affordable housing goals and increased ridership.
  • Sepulveda Pass – Assisting with preparation for procurement of a PDA for a major transit project (est. $5-8 billion) through the Sepulveda Pass.

Metro Gold Line Construction Authority – Gold Line LRT.  Special outside counsel in the joint development of parcels at four rail stations and 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 essential to financing rail transit construction.  Fred’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.

Texas Department of Transportation – Comprehensive Development Agreement.  Key member of the legal team serving as special counsel to TxDOT on its leading P3 program.  Fred’s services include leadership and assistance with procurement, exclusive negotiations, contract documents, concession agreements, DBOM contracts, tolling services agreements, innovative financing arrangements (including applications to the federal TIFIA credit assistance program) and federal issues.

  • 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.  Fred 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.
  • 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 included $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 of both segments was completed in 2018.  Infrastructure Investor magazine named the project North American Transport Deal of the Year in 2014.  Fred assisted with negotiation and drafting of the toll concession comprehensive development agreement.  Fred currently assists with negotiation and closing of a major change order to add the $750 million, 7-mile Segment 3C to the concession agreement.  Nossaman also is currently advising TxDOT on contract administration matters.  In 2017, the project was awarded the Infrastructure Award from the National Council for Public-Private Partnerships. 
  • North Tarrant Express Segment 3C.  Leader in an exclusive negotiation with the NTE Segments 3A & 3B developer to add a $750 million expansion segment to the P3 agreement.  Fred has advised TxDOT on legal authority to proceed by negotiated change order under federal and state law, negotiating strategies, alternatives analysis, and numerous commercial and financial negotiating issues, and has prepared a change order agreement and amended and restated concession agreement. The parties are currently working on satisfying the conditions precedent to commercial and financial close set forth in the change order agreement, with closing under a private activity bond and equity financing structure expected in the second quarter of 2019.
  • 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.  Fred assisted with issue analysis and resolution and helped draft the contract documents.
  • SH 130, Segments 5 & 6.  Lead attorney who advised on the first toll concession agreement in Texas history – a $1.36 billion 41-mile stretch of tolled lanes and frontage roads 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.  Fred served as a key contract negotiator for the client, recommending negotiating positions and issue resolutions and drafting contract documents.
  • 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.  Fred’s work includes advising on agreements for back-office services for the North Tarrant Express, LBJ Express and DFW Connector projects.

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.  Four years later, Fred 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.

Washington State Department of Transportation – Tacoma Narrows.  Lead special counsel who advised 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.  Fred 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.  Fred 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 country.

Insights

Publications

Blog Posts

Speaking Engagements

Organizations

Community & Professional

Women's Transportation Seminar, Los Angeles Chapter

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

Education

Admissions

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