Download - ALAMEDA CORRIDOR
ALAMEDA CORRIDOR
““A Project of National Significance”A Project of National Significance”
Project Purpose
The Alameda Corridor Project is needed to keep pace with the steady growth of cargo moving through the Ports of Los Angeles and Long Beach
U.S./Pacific Rim trade has doubled during the last decade
The Port’s share of West Coast container cargo increased from 42% in 1976 to 52% in 1999 with increasing market share projected in future years
Cargo volume in 2000 exceeds the forecast by the Independent Cargo Consultant for 2006
Factors affecting future growth 18 million population in six county area Larger container ships Vessel sharing arrangements Increase in discretionary cargo State of the art facilities at Ports Ports are the “Load Center” of West Coast
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Project Schematic
ALAMEDACORRIDOR
Stauson Ave.
Firestone Ave.
Rosencrans Ave.
Vernon Ave.
Florence Ave.
Southern Ave.
Imperial Hwy.
El Segundo Blvd.
Compton Blvd.
Alondra Blvd.
Del Amo Blvd.
Carson St.
Pacific Coast Hwy.
LONG BEACH
LAKEWOODCARSON
PARAMOUNT
BELLFLOWER
VERNON
HUNTINGTONPARK
SOUTH GATE
LYNWOOD
DOWN-TOWNLOS
ANGELES
Sepulveda Blvd.
Anaheim St.
TORRANCE
LOMITA
RANCHOPALOSVERDES
SAN PEDRO
WILMINGTON
Port ofLong Beach
Port of Los Angeles
P A C I F I C O C E A N
Gage Ave.
Tweedy Ave.
DOWNEY
COMPTON
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Project Description
The Alameda Corridor is a 20 mile, multi-track rail transportation corridor, paralleling Alameda Street, connecting the Ports of Los Angeles and Long Beach
with the transcontinental rail network in downtown Los Angeles
Consolidates operations of the Union Pacific/Southern Pacific (UP) and Burlington Northern Santa Fe (BNSF) onto one improved corridor (San Pedro, Wilmington)
Eliminates traffic conflicts at 200 street level crossings with overpasses and 10 mile long trench
Estimated cost—$2.4 billion, including contingencies and financing costs
Estimated completion—Second Quarter 2002
Projected to reduce train emissions (25%) and vehicular emissions (23%)
Projected to reduce locomotive hours (30% per day) and vehicle delays (15,000 hours per day)
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Organizing the Solution
Identifying Participants and Stakeholders
Port of Los Angeles
Port of Long Beach
City of Los Angeles
City of Long Beach
Burlington Northern/Santa Fe Railroad
Southern Pacific Railroad
Leadership/Sponsorship roles—the Ports took the lead
Legal Construct—J.P.A.—two attempts
Legal Tests
Union Pacific Railroad
6 Corridor Cities
LACMTA
Cal Trans
USDOT
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Risk Sharing
Interest Rate/Market Risk
Construction Risk
Revenue Risk
Seismic Risk
Environmental Risk
Ports
Design-BuildConsortium
Bondholders/Bond Issuers
Outside Insurers
Railroads
USDOT
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ACTA—Financial Feasibility Analysis as a Central Planning Tool
First financial model designed in 1992 427 scenarios over 6 1/2 years Focuses overall efforts Centralizes decision-making around feasibility Format of Executive Level reports allow policy makers to understand key aspects of project
and follow along with progress
Construction Parameters
Revenues
Federal Loan
Prepayments
Tax Analysis
Bonds– Senior– Subordinated
Reserves
Structure Retirements & Reimbursements
Debt Service Tables
Coverage Tables
Flow of Funds
Revenue Accumulations
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Other Sourcesof Funds
The Original Funding of the Project
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FederalCongress, TEA-21 and Demonstration Programs $700USDOT–Other Programs 30Air Quality—EPA 8ISTEA 40
State and Regional 100LACMTA–Regional STIP 0
Ports 400Cities 40
Revenues—Recurring Sources—For bonds and/or Loan 600
Ports—Shippers 5% Gross Wharfage SurchargeTruck Tolls $3 tollRailroads—User Fees $30/box Total $1.838
One Time SourcesOriginal Budget
($millions)
BB
Railroad Sensitivities
RR’s do not like to share facilities
RR’s are sensitive to additional Per Unit Cost
May be amenable to Per Unit Cost where:
Leverage of State/Local/Federal sources is maximized
Accelerates asset modernization substantially
High-Density areas dramatically improve times
Strong demand areas
R.R. Capital costs are much higher
Uncertainty/Risk Avoidance
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USDOT and ACTA—Precursor to TIFIA
ACTA approached Congress/USDOT for $700MM grant
USDOT countered with $400MM loan
Underwriters structured terms: Consistent with feasibility Favorable to ACTA Competitive with tax-exempt rates
USDOT agreed to terms: 10 year Treasury rate through 2001—30 year thereafter No interest due through 2001 Negative amortization through 2013—Builds to $880MM 30 year term No cross default No rate covenant
Congress appropriates $59MM Loan Loss Reserve Ratings OMB scoring
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ACTA and USDOT (cont.)
Congressional heavy lift Chair of House Transportation Committee—House authorization California delegation—Unified Ca. Governor Speaker of the House Committee Chair
Administration efforts Central L.A.—Jobs and economy
Signed loan—1/17/97 to great fanfare
Amended loan 10/98 to include package of construction—friendly amendments to allow 35 year termination of Use Fees
Draws scheduled and taken $140—9/97 $140–9/98 $120—9/99
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Uses
Sources and Uses of Actual Funding
Total Project cost, including all expenditures to date,are estimated at $2.463 billion
Sources
Amounts in $ millions. All construction cost dollars are inflated at 3.35% other than the design buildcontract price. Bond proceeds include original issue discount/premium and accrued interest.
CapitalizedInterest
$247
FinancingCosts
$82
ROW,Demo Proj.,Prelim. Eng.
$468
ProjectContingencies
$200
CorridorConstruction
Costs$1,431
SubordinateBond
Proceeds$164
DOT Loan$400
MTA$347
Interest$90
Misc.$27
Ports$394
SeniorBond
Proceeds$1,006
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Other Sources of Funds
The ports advanced $394 million in 1994 to purchase railroad rights-of-way
The U.S. Department of Transportation made a $400 million loan to the project
Congressional appropriation made
Total $400 million already drawn down
Paid ahead of the Senior Lien Bonds but after the Subordinate Lien Bonds
The Los Angeles County Metropolitan Transportation Authority has committed $347 million to the Project
Approximately $300 million already has been received
All but $76 million of Prop. C funds are from State of California/STIP
Sources other than bonds comprise nearly 50% of project funding
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Project Revenues per Operating Agreement with Railroads
Waterborne Containers are those that cross the docks at the Ports and leave Los Angeles area by rail (or vice versa)
Use Fees and Container Charges subject to automatic annual escalation (CPI): Minimum of 1.5% per year Maximum of 3.0% per year
No charges if complete blockage of Rail Corridor for more than five consecutive days—offset by business insurance
Use Fees or Container Charges are to be levied for 35 yearscommencing after Substantial Completion
Railroads pay Use Fees forUsing Rail Corridor
Waterborne containers $15/TEU (loaded)(i.e., entering or leaving ports) $4/TEU (empty)
Non-waterborne containers $4/TEU(loaded or empty)
Other railcars (autos, coal, white $8/railcar (loaded)bulk, iron & steel, liquid bulk, tec.) No charge (empty)
Railroads pay Container Charges onwaterborne containers not using Rail Corridor
Waterborne containers $15/TEU (loaded)No charge (empty)
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Payable in any year in which use fees and container charges are insufficient to pay 100% of debt service on the bonds and the DOT loan
The maximum Shortfall Advance payable by the ports in any year (i.e. “Contingent Port Obligation”) = 40% of debt service on bonds and DOT loan
Actual Shortfall Advance = debt service on bonds and DOT loan less Use Fees and Container Charges collected
Ports’ Shortfall Advances
The Ports are obligated to provide limited “Shortfall Advances”
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Detail of Revenue Bonds
ACTA has issued/will issue approximately $1.165 billionof 1999 Revenue Bonds in four series
Senior LienBonds
Subordinate LienBonds Total
Tax-Exempt$494MMSeries A
(2006–2037)
$21MMSeries B
(2003–2006)$515MM
Taxable$505MMSeries C
(2015–2037)
$145MMSeries D
(2003–2015)$650MM
Total $999MM $166MM $1,165MM
Amounts shown reflect the estimated par amount (not proceeds) of the 1999 Bonds
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Corridor Revenues
ACTA’s repayment obligations will be paid primarily from Use Fees and Container Charges as projected by BST (based on the Mercer/DRI Cargo Forecast)
Source: BST based on Mercer/DRI 1998 Cargo Forecast through 2020 (“Asian Crisis” scenario); 0% cargo growth assumption and 1.5% CPI assumption on revenue from 2021-2037. Assumes termination of revenues occurs July 2037.
*Containers account for 99% of total revenues
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100
150
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350
Federal Fiscal Year
FY
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$ m
illio
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Use Fees and Container Charges
Available Revenues
Additional Dedicated Revenues are provided by the Contingent Port Obligation
Source: BST based on Mercer/DRI 1998 Cargo Forecast through 2020 (“Asian Crisis” scenario); 0% cargo growth assumption and 1.5% CPI assumption on revenue from 2021-2037. Assumes termination of revenues occurs July 2037. Contingent Port Obligation = 40% of the Annual Amount and DOT Loan payments each year.
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1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037
Federal Fiscal Year
FY
Rev
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$ m
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ns)
Contingent Port Obligation
Use Fees and Container Charges
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ACTA Obligations
Dedicated Revenues are expected to provide ample coverage of the 1999 Revenue Bonds and DOT Loan
All debt service is assumed to be capitalized through January 1, 2003.Dedicated Revenues = Use Fees and Container Charges, Contingent Port Obligations and certain interest earnings
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350
1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037
Federal Fiscal Year
Deb
t S
ervi
ce (
$ m
illio
ns)
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Senior Lien Debt Service
DOT Loan
Subordinated Debt Service
Use Fees and Container Charges
“Dedicated Revenues”
Required Shortfall
Advances
ACTA’s “base case” projections assume Mercer’s mostconservative estimate (“Asian Crisis”) cargo growth scenario
Mercer Scenarios
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HighGrowth
Base Case(12/97)
“AsianCrisis”
Asian rebound apparent by late 1998
Steady gains in trade liberalization
Long-term global GDP growth rate of 3.2%
Asian rebound begins in mid-1999
Trade liberalization proceeds at a moderate pace
Long-term global GDP growth rate of 2.8%
Asian recovery delayed until early 2000
Trade liberalization slows
Long-term global GDP growth rate of 2.4%
2.9
2.9
7.8
7.0
6.32.9
16.7
14.4
12.4
7.6%
6.9%
6.2%
Note: TEU = Twenty-Foot Equivalent UnitCAGR = Compound Annual Growth Rate
ForecastScenarios Characteristics
Total TEUs($millions) Containers (TEUs)
1996–2020CAGR20101996 2020
Conclusion
Successfully secured the cooperation of major stakeholders including intense competitors.
Local, state, and national elected officials fully supportive of project with Federal government designating the Alameda Corridor as a “project of national significance.
Policy maker decision making process facilitated with well developed model and feasibility analysis.
Risk spread among various parties including construction contractor. ACTA among first to use TIFIA program under TEA-21 resulting in $400 million
federal loan with highly flexible provisions. Funding shared equally between private and public partners. ACTA, on time and on budget, has been a public/private partnership success.
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