Orange County, CA approves $627M loan for I-405 project
- The Orange County (CA) Transportation Board approved paperwork this week for a $627 million federal loan that will finance the last piece of the county's biggest capital project ever, according to the Orange County Register.
- The loan for the Interstate 405 Improvement Project will be delivered through the U.S. Department of Transportation's Transportation Infrastructure Finance and Innovation Act (TIFIA), and Secretary Elaine Chao is expected to give final approval.
- TIFIA interest rates are lower than what officials could have secured on their own and will save Orange County a projected $300 million, which the county plans to use on other critical projects. The entire loan will be repaid using tolls from the 405's new express lanes.
A $1.1 billion Measure M contribution — from a voter-approved half-cent sales tax — and $89.7 million in state funds, as well as an additional $45.6 million from the federal government rounds out the project's financing. Completion of the I-405 project is expected sometime in 2023.
In November, Orange County contracted with OC 405 Partners, which is a partnership between OCTA and Caltrans, for $1.2 billion to design and build the project. This is the biggest design-build project in county history and is also the state's first highway project to be delivered under the design-build method since passage of a law allowing it to be used for transportation projects.
About half of U.S. states currently allow design-build to be used on public projects. Attorney Lisa Dal Gallo, partner at Hanson Bridgett, told Construction Dive last year that California is more receptive to design-build because design-bid-build is susceptible to "delays, overruns and change orders." She added that technology like building information modeling (BIM) is going to force public agencies to use design-build more often so that they can realize those benefits, as well as those of the method's early and constant project collaboration.
- The Orange County Register OCTA approves $627 million loan, last funding needed for I-405 improvements
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