DALLAS - The Colorado Department of Transportation closed on a $490 million public-private partnership deal to finance the second phase of a managed lanes project on U.S. 36 between Denver and Boulder.
After the deal was announced Feb. 26, the Boulder-based Drive Sunshine Institute renewed its threat to file a lawsuit to halt the project.
The agreement is part of $1.3 billion of improvements originally identified in a 2009 environmental impact statement along the 18 miles of roadway between the two cities. The $307 million first phase is expected to be completed in January 2015 under a design-build contract.
The project includes high-speed bus lanes, bike lanes, managed toll lanes and free lanes.
Phase 2 is the Colorado Department of Transportation's first P3 deal. The private partners operating under the name Plenary Group include Goldman Sachs & Co., Ames Construction, Granite Construction, HDR and Transfield Services.
A $54 million Transportation Infrastructure Finance and Innovation Act loan represents the initial project debt. The security for the TIFIA loan will be a gross pledge of toll revenues collected on the U.S. 36 managed lanes. The Plenary Group will establish a TIFIA debt service reserve equal to maximum annual debt service over the next five year period, according to the contract.
The Feb. 26 financial close, which included completion of the TIFIA federal loans and delivering private bonds for the project, was approved by the High Performance Transportation Enterprise Board that will govern the project. The board was created by the Colorado Transportation Commission that supervises the Colorado Department of Transportation.
CDOT claims that the P3 deal allows the project to be completed 20 years faster than would be possible under conventional methods.
"This is just the beginning of a strong, mutually beneficial relationship between Plenary Roads Denver and the state of Colorado that will see important transportation improvements sooner than planned with upfront costs being provided by the private sector, and ensure a faster and more reliable commute for residents of the US36 corridor," said Mike Cheroutes, director of the HPTE. "We also have the opportunity to continue to engage the public in a discussion about how we provide better mobility for goods and people in Colorado as we explore other possible tolled express lanes and public-private partnerships."
As part of the arrangement, Plenary Roads will also operate managed lanes on Interstate 25, which connects with U.S. 36, known locally as the Boulder Turnpike. The E-470 Highway Authority, which operates a toll road east of Denver will bill and process tolls under the agreement.
The I-25 lanes will use "congestion pricing," in which the toll will increase by 10 to 55 cents depending on the time of day traveled with the highest increase scheduled for peak rush hours. Tolls during peak travel times will range between $4 and $6.
In renewing its threat to file a lawsuit to stop the project, Boulder environmental group Drive Sunshine Institute argued that the approval process was illegal.
"HPTE has demonstrated that it is stubbornly clinging to the fiction that the US 36 expansion project has been duly authorized," the institute said in response to the agreement. "Every step HPTE takes in this direction simply demonstrates that HPTE's violations are willful."