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Project Profile: Grand Parkway (SH 99) Segments H-I

Grand Parkway (SH 99) Segments H-I

photo credit: Grand Parkway Infrastructure, LLC

Location

Houston Metropolitan Region, Texas

Project Sponsor / Borrower

Texas Department of Transportation

Grand Parkway Transportation Corporation

Program Areas

Alternative Project DeliveryProject FinanceTolling and PricingTIFIA

Value Capture Techniques Transportation Corporations
Mode

Toll Highway

Description

The Grand Parkway (State Highway 99) Segments H & I Project is a 43-mile segment of the planned 184-mile circumferential Grand Parkway toll highway around the Greater Houston Metropolitan Region. The Grand Parkway is divided into 11 segments in all (A through I-2). The highway connects State Highway 146 in Galveston County to State Highway 146 in Baytown and crosses seven counties: Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, and Montgomery. The route aims to improve connectivity across the existing network, reduce congestion and unsafe "stop-and-go" conditions, and accommodate the metro area's demographic and economic growth.

Segments H and I are in the northeast quadrant of the route, extending in a clockwise fashion from Grand Parkway Segments D-G, which were constructed between 2013 and 2016 and added 53 miles along the northwest quadrant of the Grand Parkway alignment.

Segments H and I consist of 43 miles of tollway, tolling equipment upgrades, and other improvements:

  • Segments H and I-1 provide 37.5-miles of two-lane toll road, with intermittent four lane sections for passing, from I-69/US 59 North in Montgomery County to I-10 in Chambers County
  • Segment I-2A upgrades tolling equipment along an existing 8.7-mile, four-lane section, which opened in 2008 and became part of the Grand Parkway in June 2017, from I-10 to FM 1405
  • Segment I-2B adds 6.1-miles of four-lane toll road from FM 1405 in Chambers County to SH 146 in Harris County

Segment H also includes the option of widening 7.9 miles of the Grand Parkway alignment from two to four lanes between I-69/US 59 North and Huffman-Cleveland Road, near the Galveston Bay estuary. The widening work is known as the H West Option.

The Texas Department of Transportation (TxDOT) has executed a contract with a design-build joint venture team, Grand Parkway Infrastructure (GPI), who will construct Segments H and I and be responsible for maintaining portions of the project through a Capital Maintenance Agreement.

Financing for the project is the responsibility of the Grand Parkway Transportation Corporation (GPTC) a public, nonprofit corporation created in April 2013 to act on behalf of the Texas Transportation Commission and lead the effort to finance, build and operate certain segments of the Grand Parkway, including Segments H and I. Project financing consists of proceeds from toll revenue bonds as well as bond anticipation notes to be replaced by a TIFIA loan following construction.

Cost

$1.816 billion (total project cost including capital costs, agency oversight, and financing costs)

$1.285 billion (total capital costs)

  • Design, construction, and utilities - $895.6 million
  • Right-of-way acquisition and environmental mitigation - $354 million
  • Tolling and ITS equipment - $35.2 million
Funding Sources

Series 2018A subordinate tier toll revenue bonds (supported by a toll equity loan agreement [TELA] with TxDOT) - $712.1 million

Series 2018A bond issue premium - $98.1 million

Series 2018B subordinate tier toll revenue put bonds (TELA supported) - $166.525 million

Series 2018B bond issue premium - $20.6 million

Bond Anticipation Notes (to be taken out by TIFIA loan proceeds following construction) - $605.33 million

Bond Anticipation Note issue premium - $63.2 million

Series 2013E subordinate taxable series bonds - $150 million

Project Delivery / Contract Method

Design-build with maintenance contract

Private Partners

Design-Builders - Grand Parkway Infrastructure, LLC

  • Ferrovial Agroman US Corp.
  • Granite Construction Company
  • DBW Construction (Webber)
Project Advisors / Consultants

To Grand Parkway Transportation Corporation

  • Estrada Hinojosa & Co., Inc. - Financial Advisor
  • Mayer Brown LLP - Special Counsel
  • Bracewell LLP - Disclosure Counsel
  • McCall, Parkhurst & Horton LLP - Bond Counsel
  • U.S. Bank National Association - Trustee and Paying Agent / Registrar
  • Goldman Sachs - Bond Underwriter
  • Morgan Stanley - Bond Underwriter
  • CDM Smith Inc. - Traffic and Revenue Consultant
  • HNTB Corporation - General Engineering Consultant

To USDOT Build America Bureau

  • Bryant, Miller, Olive, PA - TIFIA Legal Advisor
  • Deloitte - TIFIA Financial Advisor
  • PFAL/C&M Associates - TIFIA Traffic and Revenue Advisor
Lenders

Bondholders, USDOT Build America Bureau (TIFIA)

Duration / Status

Contract executed with GPI June 30, 2017.

Construction began July 26, 2018.

Expected substantial completion February 2022.

TIFIA Credit Assistance

Direct Loan - $605.33 million

TIFIA will be repaid with toll revenues from the Grand Parkway System.

Financial Status

TIFIA credit agreement was executed on February 22, 2019.

GPTC issued $878.6 million in Grand Parkway System Toll Revenue Bonds and $605.3 million in Bond Anticipation Notes in May 2018.

Innovations
  • The GPTC leverages the state's credit rating and issued bonds with favorable financing costs.
  • The outstanding obligations of the transportation corporation are not obligations of TxDOT or the Texas Transportation Commission. The Series 2013E, 2018A, and 2018B obligations are supported by a toll equity loan agreement (TELA) with TxDOT. TxDOT has committed to make a loan available to cover certain project costs, certain operation and maintenance costs, and certain major maintenance costs in the event that the revenues of the project are insufficient for those purposes and satisfying debt service on the TELA-supported toll revenue bonds. Advances by TxDOT under the TELA are subject to legislative appropriation and certain other limitations.
Related Links / Articles

TxDOT Grand Parkway Website

TxDOT Project Sheet

Grand Parkway Transportation Corporation

Grand Parkway Infrastructure Website
Contacts

Brian Ragland
Chief Financial Officer, TxDOT
Tel: (512) 305-9512

Quincy Allen, PE
Houston District Engineer, TxDOT
Tel: (713) 802-5002
quincy.allen@txdot.gov

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