The Department of Transportation gave final approval to an innovative $300 million loan package to help Denver remake its Union Station passenger rail center into a light rail and bus hub.
That funding, at low interest rates that match federal borrowing costs, not only give the project a financing boost but give the DOT its first ever example of combining low-cost loan programs operated separately by the Federal Highway Administration and Federal Railroad Administration.
While the loans are aimed at a large passenger rail program for Denver commuters and tourists, the project affects some freight operators. It is part of a long-term plan under which Denver has been purchasing rights-of-way use under long-term deals from freight railroads Union Pacific and BNSF, and which is designed to ease congestion on highways shared by commercial trucks around the largest commercial center in the Rocky Mountain region.
Blogs from JOC:
DOT's Big Plans Take Shape
The deal also marks the FRA’s first loan closed this year under its Railroad Rehabilitation and Improvement Financing program. Denver officials said their RRIF loan is for $155 million, which makes it the second largest ever issued by the FRA since the program first began issuing loans in 2002.
The other federal loan piece, for $145.6 million, comes from the FHWA’s Transportation Infrastructure Finance and Innovation Act program, for which a broad range of road, rail and multi-modal surface transportation projects may apply. The TIFIA Web site says borrowers as of July 23 could get a 35-year loan at a 3.99 percent interest rate.
“This project epitomizes the importance of livability principles to promote transportation mobility and strong communities,” DOT Secretary Ray LaHood said.
Industry sources say it is also the first to close this year of several major loan applications for the RRIF program. In the past, that account has mainly been used by short line freight railroads, with the loans often for much smaller amounts.
The TIFIA and RRIF loans combined provide about 58 percent of all funding for Denver’s Union Station project, the DOT said, along with a Regional Transportation District bond and tax increment revenues pledged to the station to repay debt. That project is expected to take four years and generate about 7,000 jobs.
--Contact John Boyd at email@example.com.