DALLAS – Federal grants totaling $1.1 billion that will help fund Chicago Transit Authority's $2.1 billion rebuilding of its Red and Purple heavy rail lines are the latest in almost $4.6 billion of federal funding approved for transit systems in the final month of the Obama administration.
The full funding grant agreement announced Monday commits the Federal Transit Administration to provide $957 million of Core Capacity grants and a $125 million anti-congestion grant for the first phase of CTA's Red/Purple Modernization project.
Chicago Mayor Rahm Emanuel said the modernization effort is the biggest capital project ever undertaken by CTA. It will create 6,000 jobs during the construction phase.
"This type of investment in transit is an investment in Chicago's residents and neighborhoods, connecting them to jobs, education, and more," Emanuel said.
The CTA grant comes on the heels of last week's announcement of a $1.19 billion construction grant for the second phase of Los Angeles County Metropolitan Transportation Authority's subway extension project. The LACMTA project also received a $307 million low-interest loan through the Transportation Department's Transportation Infrastructure Finance and Innovation Act program.
Federal officials signed a $1.99 billion master credit agreement with Seattle's Central Puget Sound Regional Transit Authority shortly before Christmas to help fund four light rail projects. An initial $615.3 million TIFIA loan is part of the December accord.
CTA will use the federal grants, local revenue, and proceeds from sales tax revenue bonds to fund the modernization project, said CTA spokesman Brian Steele.
The project includes the rebuilding of four stations and a mile of tracks and structures. Elevators will be added at the stations, which were built in the 1920s.
A flyover for northbound Brown Line tracks where the rails intersect with two lines will allow CTA to speed up trains on the busy Red Line, Steele said.
"It will eliminate one of the biggest bottlenecks in the entire CTA system and allow us to run more trains and alleviate overcrowding not only now but in the future," Steele said.
"The Red Line is the backbone of the system," he said, noting that the 100-year-old Red Line accounts for 30% of total ridership on the CTA's eight rail lines.
Engineering work on the modernization project will begin this year, with completion expected in 2023.
Chicago officials had to scramble to meet a Nov. 30 deadline for submitting the grant application with the required local matching funds before Obama leaves office on Jan. 20.
The city council met in a special session that day to unanimously approve a tax increment financing district that would capture the growth in property tax revenues in a mile-wide corridor along six miles of the elevated Red Line tracks on the north side of Chicago.
The new TIF, which is the largest in the city's history, is expected to generate $823 million over the next 35 years as the remainder of the required local match.
CTA has applied for a $359 million TIFIA loan for the project that would be repaid from the property tax revenues.
The local match for the Red and Purple line program includes an estimated $287 million from the sale this year of revenue bonds supported by CTA's dedicated sales tax.
CTA expects to take to market this week a $325 million negotiated tranche of sales tax receipt bonds to help fund its $3.5 billion, five-year capital program. Kroll Bond Rating Agency assigned an AA-minus and stable outlook to the second lien bonds and affirmed the AA on the senior lien bonds. S&P Global Ratings assigned an A-plus and stable outlook and affirmed the senior lien's AA.
