Orange County taxpayers will save $300 million and OCTA can deliver on promises for 405 Express Lanes carpoolers thanks to the U.S. Department of Transportation TIFIA program
ORANGE – The Orange County Transportation Authority today secured a $629 million federal loan for the I-405 Improvement Project, which will pay for a major portion of the $1.9 billion worth of freeway improvements set to begin construction by early next year.
OCTA officials today signed the final documents with the U.S. Department of Transportation’s Build America Bureau for the loan through the Transportation Infrastructure Finance and Innovation Act, commonly called TIFIA.
“This process has shown exceptional cooperation between our local team working on the financing of the I-405 project and federal transportation officials who understand how significant these improvements are to the regional transportation system” said OCTA Chairman Michael Hennessey. “This is a big win for the taxpayers of Orange County and drivers throughout Southern California.”
The OCTA board approved general terms of the loan at a board meeting late last month.
By taking advantage of the low-interest rate of 2.91 percent, the TIFIA loan is expected to save about $300 million over the 35-year life of the loan as compared to traditional bond financing. The loan will be repaid solely using revenue collected from drivers who choose to use the 405 Express Lanes being built as part of the project.
The money saved also will allow the 405 Express Lanes to remain free to two-person carpools during non-peak hours when the express lanes open, a commitment made by OCTA.
“In order to successfully deliver transportation projects in today’s market, it is critical to develop innovative financing methods and this project is an ideal example of that,” said OCTA CEO Darrell E. Johnson. “We have been able to stretch our local transportation sales tax dollars by partnering with the U.S. Department of Transportation and state of California for the benefit of Orange County and our region. I’m looking forward to moving this project into construction.”
With the loan secured, OCTA has given the contractor, OC 405 Partners, notice to fully proceed with the design and construction of the project. It’s expected the project will begin construction by early next year with completion anticipated for 2023.
Other funding for the I-405 Improvement Project includes:
- $1.1 billion in Measure M funds
- $45.6 million in federal funds
- $89.7 million in state funds
OCTA, in cooperation with Caltrans, is leading the I-405 Improvement Project between State Route 73 in Costa Mesa and Interstate 605 at the Orange County border with Long Beach.
The design-build project will add one general-purpose lane in each direction of the I-405 between Euclid Street and I-605, as promised to voters through Measure M, the county’s half-cent sales tax for transportation improvements.
The improvement project will also add a second lane in each direction that will be combined with the existing carpool lane to provide dual tolled lanes on I-405 between SR-73 and I-605, called the 405 Express Lanes.
For more information on the I-405 Improvement Project, visit www.octa.net/405improvement.
