CHICAGO — The Chicago Transit Authority's receipt of a $120 million Transportation Infrastructure Finance Innovation Act loan for the renovation of a major rail transit line was announced Feb. 5 by city and federal officials.
The low-interest loan will help the CTA complete the four-year, nearly $500 million overhaul of the Blue Line from downtown to O'Hare International Airport. Additional funding will come from CTA sales tax bonds, Regional Transportation Authority of Illinois bonds, state capital aid, and tax increment financing from Chicago.
"By upgrading the Blue Line, this project will improve access to 21st century transportation for the entire region," U.S. Transportation Secretary Anthony Foxx said during a news conference with city and CTA officials and U.S. Sen. Dick Durbin, D-Ill. "Going forward, we want to bring these opportunities to other parts of the country, working with Congress to develop a long-term funding solution for transit, roads, bridges and other crucial infrastructure."
The project was first announced in late 2013 and work began last year with renovations to three of 13 stations slated for improvements already completed. The overhaul calls for upgrades to tracks, signals, electrical power substations, and stations. Ridership has grown steadily over the years with weekly figures growing by 25% over the past five, and 33% over the last 10, a city statement said.
"By modernizing the Blue Line, we are investing in Chicago's future, as it not only serves as a vital transportation link connecting O'Hare and downtown but it serves as a key economic engines for scores of Chicago neighborhoods," said Mayor Rahm Emanuel, who has promoted city investments in infrastructure as part of his campaign for a second term in the election later this month.
The CTA received AA-minus and A-plus ratings on the loan structure. The AA-minus rating came from Kroll Bond Rating Agency while Standard & Poor's assigned an A-plus and stable outlook to the loan.
Loan repayment is secured by all CTA farebox revenues and is considered a secured bond obligation under a master trust indenture. The same features apply to the CTA's first $79 million TIFIA loan that closed last year for the agency's 95th Street Bus and Rail Project; a third TIFIA loan is in the works for railcars.
The CTA's five-year capital program totals $2.5 billion, relying on about $700 million in borrowing including $560 million in TIFIA loans and $145 million in future sales tax backed borrowing, according to budget documents.