News Source: Texas Construction Magazine, McGraw Hill Construction, May 2008 edition
May. 1, 2008
Pass- Through Financing Delivers for El Paso Project
by Mary Lou Jay
Improving access to Fort Bliss and Biggs Army Airfield was a priority for the military. So, J.D. Abrams introduced pass-through toll financing to TxDOT's El Paso District, marking the first time TxDOT has used the tool with a private developer. And Spur 601 was born.
The Base Realignment and Closure process that will bring more than 50,000 soldiers and dependents to the U.S. Army's Fort Bliss in El Paso has spurred an innovative road construction project in the area.
Using TxDOT's pass-through financing method, civil construction contractor J.D. Abrams of Austin has arranged the financing for and is designing and building the new Spur 601 on the city's eastern side. The road will connect U.S. 54 to the Purple Heart Memorial Highway (Loop 375), improving access to Fort Bliss and Biggs Army Airfield.
This is the first time that TxDOT has signed a pass-through financing deal with a private developer.
"The Army base wanted to move its ingress point and put it on a major thoroughfare so that people could access it from the Inner Loop and from U.S. 54," says David Head, TxDOT project manager. "TxDOT and the city had been looking at the connection, but the money wasn't there."
J.D. Abrams developed the unsolicited design-build proposal for a 7.5-mi, six lane highway because of its strong ties to the region, says Bill Burnett, the company's vice president for project development. "We are active not just with TxDOT but also with the Army Corps of Engineers," he adds. "We are currently doing about $160 million of work on the base."
With reductions of TxDOt's highway program in the El Paso district, the company also wanted to provide work for its 300 area employees.
No tolls for motorists Spur 601 will cost $367 million. TxDOT will provide $55 million during the construction phase: $45 million in federal highway funds and $10 million from the city-owned El Paso International Airport, which is adjacent to Fort Bliss. Abrams worked with the Camino Real Regional Mobility Authority, a new entity set up to develop regional transportation projects, to sell bonds to finance the remainder.
As Abrams completes road segments, TxDOT will make payments to the RMA based on traffic volumes; the more vehicles using the road, the faster the payback. The money from TxDOT funds will go to retiring the bond debt.
TxDOT will make payments for 10 years after road completion, with contributions capped at $35 million per year.
Motorist will not have to pay tolls to use the road.
J.D. Abrams proposed the Spur 601 project to the Texas Transportation Commission in December 2005, but it took a full year to win approval. The parties signed a formal agreement in May 2007.
The Federal Highway Department, which provided the state's share of the funds, gave its consent in August 2007. Design began immediately, with construction starting in December.
Construction will take place in phases with a 42-month total schedule. Segment A1, opening in August, will extend and reconfigure two city streets, Global Reach and Walter Hones Boulevard, to connect to the base.
The second phase, to be ready in May 2009, will encompass 2.5 mi of the Spur, from is intersection with Global Reach to Loop 375. The third phase, scheduled for completion in November 2009, will include the eastbound lanes of the new freeway from Airport Road to Global Reach.
The remainder of the project should be finished in January 2011.
A project for El Paso The complex project involves many different entities. The U.S. Army and the city have donated land for the project, but J.D. Abrams is still negotiating with the El Paso Public Service Board, the Humane Society of El Paso and the Union Pacific Railroad for the necessary rights-of-way. In one 2-mi segment, J.D. Abrams will have to coordinate its efforts with 17 different utility owners.
Abrams is building two other projects near the spur - a new intersection at Fred Wilson Avenue, Walter Hones Boulevard and Airport Road and the addition of two lanes to U.S. 54. Abrams and TxDOT have coordinated this work to accommodate and complement the construction of Spur 601.
The cooperation between all the involved parties has been outstanding, Burnett says. "This isn't an Abrams project, it's not a TxDOT project, not an Army project" he adds. "Everybody has the attitude that this is an El Paso project, and everybody always puts what's best for the project first."