Project Profile: Midtown Express (SH 183 Managed Lanes)

photo credit: DriveMidtown Website

Location	Dallas-Fort Worth Metroplex
Project Sponsor	Texas Department of Transportation (TxDOT)
Program Areas
Mode	Highway / Express Lanes
Description	The Midtown Express, formerly the SH 183 Managed Lanes Project, will increase the capacity and reconstruct portions of State Highway (SH) 183, SH 114 and Loop 12, which intersect one another southeast of Dallas-Fort Worth International Airport and northwest of Downtown Dallas. SH 183 is a critical east-west route between Dallas and Forth Worth originally built in the 1940s. The current roadway dates back to 1959, and has remained relatively unchanged since 1973 when one additional lane was added in each direction. Today, the highway serves as a primary connection between Dallas and Fort Worth, but it can no longer adequately meet the demand of 150,000 to 170,000 vehicles a day. The project will increase the capacity of the three roadways with the addition of one TEXpress (toll managed) Lane in each direction: SH 183 - 14.8 miles from SH 121 to I-35E SH 114 - 10.5 miles from SH 183 to International Parkway (westbound only from SH 161 to International Parkway) Loop 12 - 2.5 miles from SH 183 to I-35E The project will be delivered using an innovative public-private partnership. TxDOT will provide $600 million in progress payments throughout the estimated 3.5-year construction period to the private partner. The remaining $247.6 million will be financed by the private partner and paid in five installments over five years following substantial completion. TxDOT will collect all tolls on the express lanes and compensate the private partner for operating and maintaining a portion of the project for 25 years after substantial completion. Additional plans for further expansion are also envisioned pending future funding availability.
Cost	Total project cost - $1,415.1 million (YOE, based on Initial Financial Plan) $847.6 million (design and construction) $567.5 million (preliminary engineering and environmental, right-of-way acquisition, tolling systems, project management and oversight, professional services, contingency, risk mitigation) O&M payments over 25 years (present value) $171.8 million
Funding Sources	Federal funds - $680.5 million State funds (motor fuels taxes, state vehicle registration fees, tolls/user fees, state and local bond programs, local governments' general funds) - $387.1 million Federal/state funds (expenditures incurred as of May 2014) - $347.5 million
Project Delivery / Contract Method	DBF (design-build-finance) with O&M contract
Private Partner	Southgate Mobility Partners (project developer/equity members) Kiewit Development Company Kiewit Infrastructure South Co. Southgate Constructors (design-build contractor) Kiewit Infrastructure South Co. Austin Bridge & Road LP Parsons Transportation Group (design) Southgate Mobility Partners, Infrastructure Corporation of America (operations and maintenance)
Project Advisors / Consultants	ARS Engineers Inc. Burgess Engineering and Testing Inc. Corsair Consulting LLC CP&Y Inc. Lamb-Star Engineering LP Innovative Engineering Associates Inc. Plenary Group The Transtec Group
Lenders	To be determined pending financial close by the private partner
Duration / Status	TxDOT and Southgate Mobility Partners executed a development contract on November 20, 2014 and Notices to Proceed were issued on December 2, 2014 and February 5, 2015. Construction began in April 2015. Estimated Substantial Completion in 2018.
Financial Status	TxDOT has identified $600 million in public funds to compensate the private partner during construction. The remaining $247.6 million in project cost will be financed by the private partner and repaid by TxDOT from toll revenue and additional public funding sources as necessary in five installments over five years following substantial completion. No public debt or private equity is involved in the transaction.
Innovations	The project uses an innovative P3 structure combining design-build with a short-term receivables (gap) financing and no private equity, as well as long-term O&M. The private partner's responsibility includes routine and lifecycle operations and maintenance over 25 years with specified handback requirements. Upon substantial completion, TxDOT will begin compensating the private partner using "pass-through tolls." This compensation includes the remaining $247.6 million in deferred construction costs and 25 years of O&M costs. Pass-through tolls are a form of availability payments based on an agreed-to per-vehicle/vehicle mile fee. To establish a design and construction bid price, the private partner submitted a per-vehicle fee, which when multiplied by TxDOT's predefined, estimated traffic volume, was converted to the bid price of $847.6 million. Toll revenues will be TxDOT's first source of funds for the pass-through payments. If they are insufficient, TxDOT will use other revenues to make up the difference. If actual toll revenues exceed the pass-through payments, a revenue-sharing arrangement will be applied.
Related Links / Articles	Drive Midtown Project Website TxDOT Project Tracker TxDOT Project Website Executed Development Agreement Financial Public Hearing Presentation
Contacts	Tony Hartzel TxDOT Dallas District Public Information Supervisor Tel - (214) 320-4481