SAN DIEGO–San Diego Association of Governments (SANDAG) completed the process of securing a large loan under a federal credit assistance program Tuesday to help finance the construction of the Mid-Coast Trolley Extension, providing very low borrowing costs and flexibility that will save taxpayer dollars in building the largest transit project in the region’s history.
The federal Transportation Infrastructure Finance and Innovation Act (TIFIA) program offers opportunities to support and facilitate the financing of large and complex transportation projects. It provides federal credit assistance for qualified projects of national and regional significance, and typically provides more advantageous terms than can be obtained in the traditional financial markets.
SANDAG closed on a 2.72 percent fixed-rate loan of up to $537.5 million from the program, which is administered by the Build America Bureau within the U.S. Department of Transportation.
The Mid-Coast project, which is currently under construction, will add nine new stations and extend San Diego Trolley service for 11 miles from Old Town up to UC San Diego and University City. It is expected to go into service in 2021.
The cost of the $2.1 billion project is being split between the federal New Starts Program, which has committed $1.04 billion, and the region’s TransNet program, the local half-cent sales tax for transportation administered by SANDAG. In order to finance large-scale projects, SANDAG sells bonds against future TransNet revenues. The TIFIA loan provides lower rates and more flexibility in that process.
