SAN FRANCISCO — The syndicate picked to design, build, finance, operate and maintain California’s first public-private partnership, the Presidio Parkway project, plans to partly fund the link to the Golden Gate Bridge with $150 million of private-activity bonds.
The consortium, Golden Link Partners, has preliminary plans to combine the fixed-rate, short-term bond sale with equity investments, a long-term loan under the federal Transportation Infrastructure Finance and Innovation Act, and milestone and availability payments to pay for the project, according to the recently released financial proposal.
The new parkway project will replace a 1.5-mile portion of U.S. Highway 101, known as Doyle Drive, with a new six-lane roadway linking San Francisco and the Golden Gate Bridge. The existing roadway — which is 73 years old and handles 120,000 trips per day — does not meet structural standards and regularly faces snarled traffic.
The proposal estimates the project would cost $358 million, including $254 million for construction.
“The core lenders view the placement of $150 million of PABs secured by the $173.43 million milestone payment as clearly achievable in the current market,” the proposal said.
To cover the rest of the financing, the partners plan to add a $44 million equity contribution and get $161 million from the TIFIA loan. Another $2 million would also come from interest earnings, according to the proposal.
The senior bonds would mature in 2015. Barclays Capital, Bank of America Merrill Lynch, and Scotia Capital would be underwriters, according to a bond offering term sheet in the proposal.
Golden Link said it plans to submit an application to secure the bond capacity under the federal Safe, Accountable, Flexible, Efficient Transportation Equity Act: a Legacy for Users.
Parts of SAFETEA-LU, which expired more than a year ago, have been extended until the end of the year, including authorization covering surface transportation projects.
The California Department of Transportation already has applied for bonding authority to the U.S. Department of Transportation and the conduit issuer, the California Municipal Finance Authority, on behalf of the bidders in order to speed the process.
CalTrans and the San Francisco County Transportation Authority released this month a notice of intent to award the contract to Golden Link, whose proposal pitched $28.5 million as the availability payments made for reaching targets. The two other final bidders were Golden Gate Access Group and Royal Presidio SF Partners.
The winning proposal still needs to be vetted through public comment and submitted to the Legislature and the Public Infrastructure Advisory Commission for review. No other approvals are needed.
The final close on the commercial proposal should come before the end of year and the financial side of it should close in 2011, according to the Business, Transportation, and Housing Agency, which oversees CalTrans.
The Presidio project will be the first project financed under legislation approved by state lawmakers in 2009, with the governor’s strong support, to push for greater use of public-private partnership financing.
SFCTA officials have said the P3 procurement is meant to off-load the risk of cost overruns and ensure proper maintenance of the facility over time.
The parkway has two major phases. The first one, which is underway, will upgrade the road to meet earthquake-safety standards by late October 2011. The second phase will complete major construction and finish the project by spring 2014.
The new road will snake through the Presidio, a national park.
The project will also improve the environment and enhance pedestrian and bicycle access at the park.
