P3 Option: New Build Facilities - Design Build Finance
Operate
Mode: Toll Road
Description: South Bay Expressway (SBX) toll road is
a 9.3-mile privately-funded southern extension of SR 125 extending from
SR 905 near the International Border to SR 54 near Sweetwater Reservoir
in San Diego, California. SBX connects the only commercial port of entry
in San Diego to the regional freeway network. This project, made possible
through an innovative public-private partnership, completes the missing
link in San Diego's third north-south freeway corridor. The project also
included a publicly-funded 3.2-mile contiguous segment to the north, including
a new SR 125/SR 54 interchange, known as the Gap & Connector.
SBX connects Otay Mesa, the largest area of industrial-zoned
land remaining in San Diego County, with Eastern Chula Vista and points
north and east, drastically reducing commute times and providing convenient
access to Downtown San Diego, Sorrento Valley, Santee, I-8 and I-15, and
Mexico.
The toll road was developed under California's
AB 680 legislation passed in 1989. A limited partnership,
South Bay Expressway, L.P., holds a franchise with the State of California
under which it financed and built the highway, then transferred ownership
to the State. The limited partnership then leases back, operates, and maintains
the facility for 35 years. In 2042, control goes back to the State at no
cost.
South Bay Expressway was privately financed and
operates as a toll road, offering both cash payment and the FasTrak electronic
toll collection system. The northern 3.2-mile segment of the South Bay
Expressway including the SR 54 interchange was financed publicly using
a mix of federal funds and local sales tax proceeds. Both sections were
built by the same contractor under two separate design-build contracts.
Project Sponsor:
Caltrans (Public Sector)
South Bay Expressway, L.P. (Private Sector)
Cost:
$635 million (Southern 9.3-mile toll road section)
$138 million (Northern 3.2-mile Gap & Connector section)
Type of Finance:
Southern toll section:
$495 million in investor equity and bank debt
$140 million TIFIA loan
Northern Gap & Connector section:
Federal funds
Local sales tax receipts
Revenue Sources: Toll revenues
Project Delivery / Contract Method: 35-year Build-Transfer-Operate
franchise with the State of California that allows developer to set market
rate tolls. Franchise allows a maximum 18.5% return on total investment
with additional allowed incentive return for action to increase average
vehicle occupancy on the toll road.
Private Partner: South Bay Expressway, L.P. - Owned
by Macquarie Infrastructure Group and Macquarie Infrastructure Partners
Project Advisors:
Nossaman, Guthner, Knox & Elliott, LLP
Salomon Smith Barney
Parsons Brinckerhoff
Orrick Herrington & Sutcliffe
Wilbur Smith Associates
Lenders: Senior lenders and syndicated bank debt; TIFIA
program
Physical Status: Opened November 2007
Financial Status: Financial Close May 23, 2003
Innovations: $140 million TIFIA loan is the first-ever
provided to a private toll road development; the 38-year loan has a fixed
rate borrowing cost equal to 30-year treasuries
Followed a competitive bid, design-build procurement
process in which the same designer, design subcontract, and design price
were mandated to each proposer
Location: San
Diego County, California 
