News Source: Construction Today Magazine, October 2008 Edition
Oct. 1, 2008
El Paso's new Spur 601 project, a 7.4-mile expressway connecting U.S. Highway 54 to Loop 375 and is the country's first private pass-through finance transportation project, according to builder J. D. Abrams LP.
By Joanna Miller
Austin, Texas-based J. D. Abrams LP has been working throughout the Southwest since 1966, and the company is now adding another distinction to its name. It is currently working on the first private pass-through finance transportation project in the county, says Bill Burnett, vice president for the project development.
The Spur 601 project will connect U.S. Highway 54 to Loop 375 with a 7.4-mile four-lane expressway in El Paso, Texas. Through a partnership with the Camino Real Regional Mobility Authority (CRRMA), Abrams financed the project, allowing it to begin years earlier than the state's typical pay-as-it-goes financing would have allowed.
"The contract required that we sell bonds to pay for the project,"Burnett says. Due to IRS regulations, the company could not sell tax-exempt bonds itself, so the CRRMA, a public entity agreed, to issue the bonds on its behalf.
Abrams is being paid throughout the development of the project, and the CRRMA will be repaid by the Texas Department of Transportation (TxDOT) on a biannual basis once the road opens in January 2011.
The amount of the payments depend on ridership, but they will be made over a 10-year period and will not exceed $35 million per year.
The bonds were sold in the amount of $238 million to finance $213 million including capitalized interest and closing cost, but $312.4 million will be paid back to cover the cost of interest on the financed amount.
"The difference being the cost of borrowing money," Burnett notes. The state of Texas invested $45 million in the project, and the city of El Paso $10 million. The total project cost is $268 million.
"Until recently, Texas was a 'pay-as-you-go'state,' he says. To build a $268 million project in El Paso would have taken them seven years to begin and would have been broken up into smaller pieces.
"Our project is scheduled to finish in 2011, and I doubt they would have let a contract for the project until 2012 under traditional financing. Privately financed, it will be completed prior to that time."
Abrams is responsible for acquiring the right of way for the road in the name of the state of Texas, accommodating the 14 utility owners on the project, and designing and building the road. It has 200 employees working on the project.
Burnett says the company has worked on design/build project before, but Spur 601 is its first venture into design/build/finance. "We were founded there, and everyone in the company has worked in El Paso at least once in their career."
"We are familiar with the governments in El Paso and we do a lot of work for the U.S. Army Corps of Engineers at Ft. Bliss and a lot of TxDOT in the El Paso area". Prior to taking a position at Abrams, Burnett worked for TxDOT for 29 years.
Founded as J.D. Abrams Inc. in El Paso, Texas, in 1966, the company moved its headquarters to Austin in 2000 and became J.D. Abrams LP. Today, it is a full-service heavy civil contractor specializing in public works infrastructure projects.
In addition to its four Texas offices, the company also includes two subsidiary operations: Austin PreStressed and Transmountain Equipment both located in Austin.
The company works primarily in the highway and bridge construction sector for TxDOT, but also takes on other project types. These have included:
The company's staff includes project estimators, project schedulers and quality control personnel.
"Our construction projects are staffed with equipment operators and craftsmen who take pride in their work and the product that Abrams delivers to project owners",the company says.
"All of our projects are staffed with experienced and seasoned project foremen and superintendents. We are proud of our safety record, and our position as a leader in the industry in safety".
In 2004 Abrams received the first place award for our safety program for large heavy civil contractors in the United States, it adds
Factors of success
Abrams says it believes in cooperation and communication as key factors in producing a successful construction project.
"Our firm is a proponent of the partnering philosophy," it adds.
"Both Abrams and the professionals who represent us have received numerous awards for both the quality of the projects we have constructed and the involvement we have had with civic organizations and businesses impacted by construction.
"Our project personnel have also been recognized for their partnering spirit and leadership on complex construction projects," it says.