SAN FRANCISCO — The first public-private partnership project under a program championed by California Gov. Arnold Schwarzenegger could lead to the sale of almost $600 million of private-activity bonds to fund a six-lane roadway to San Francisco’s Golden Gate Bridge.
The San Francisco County Transportation Authority is asking the U.S. Department of Transportation to make available $592 million of private-activity bond authority for the “design-build-finance-operate-maintain” Presidio Parkway project.
The estimated sale date for the bond issue is April 2011, according to a document submitted to the California Municipal Finance Authority, which would serve as the conduit for any private-activity bonds that are issued. The DOT has called it one of the largest, most complex and labor-intensive highway projects in the country.
Twelve different funding sources, including federal, state, and local government monies, will finance the billion-dollar project, according to the DOT.
Three bidders submitted technical proposals last week and financial bids are due Sept. 27, said Kome Ajise, the P3 program manager at the California Department of Transportation, or Caltrans.
“Part of the process was to set up a PAB application in the name of each of the teams without knowing which of the teams will win,” Ajise said. “We really don’t know what the teams are going to need and we wanted to make the facilities available to them.”
The SFCTA applied for the bonds through the CMFA because an inducement resolution from an issuer is needed for the DOT private-activity bond allocation application. The authority’s board unanimously approved the resolutions Aug. 20. The three short-listed bidders are Golden Gate Access Group, Golden Link Partners, and Royal Presidio SF Partners.
Procurement guidelines call for the chosen developer to be paid a $173 million milestone payment at the end of construction, with availability payments estimated by Caltrans to be between $1.13 billion and $1.38 billion in year-of-expenditure dollars over 30 years.
The project 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 project will replace a 73-year-old, 1.5-mile portion of U.S. Highway 101 known as Doyle Drive, a key link from central San Francisco to the Golden Gate Bridge. The drive will be replaced with a new six-lane parkway and a southbound auxiliary lane. The contract will also include operation and maintenance of all of the facilities.
The new road will snake through the Presidio, a national park. Part of the project will also be to improve the environment, pedestrian and bicycle access at the park. Currently, the roadway, which handles 120,000 trips per day, does not meet structural standards and traffic regularly gets snarled along the stretch.
The Presidio Parkway would be the first project financed under legislation approved by state lawmakers in 2009, with the governor’s strong support, to facilitate greater use of P3 financing.
SFCTA officials have said the point of using the P3 procurement is to off-load the risk of cost overruns and ensure there is proper maintenance of the new facility over time. The DOT has already provided $128 million in stimulus funds to the project.