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Project Profiles

Downtown Tunnel / Midtown Tunnel / MLK Extension

Location

Cities of Norfolk and Portsmouth, Virginia

Project Sponsor / Borrower

Project Sponsor: Virginia Department of Transportation (VDOT)

Borrower: Elizabeth River Crossings Opco, LLC

Program Areas

Project DeliveryProject FinanceP3TIFIARevenue - Road Pricing Revenue

Fiscal Year Approved

Fiscal Year 2012

Mode

Highway / Tunnel

Description

The Downtown Tunnel / Midtown Tunnel / MLK Extension consists of five components of construction involving three facilities in the Hampton Roads region of Virginia. The Midtown Tunnel portion consists of a new two-lane tolled tunnel under the Elizabeth River parallel to the existing Midtown Tunnel connecting the Cities of Norfolk and Portsmouth as well as modifications to the existing tunnel to provide increased capacity for east-west travel linking Route 58 and I-264 in Portsmouth to the interchange at Brambleton Avenue/Hampton Boulevard in Norfolk. Modifications to the interchange are also planned. The planned improvements to the Downtown Tunnel will bring it into compliance with current fire and life safety standards. The MLK Extension portion of the project consists of extending U.S. Route 58 south from London Boulevard, approximately 0.8 mile to I-264 with an interchange at High Street.

The $2.1 billion project will be built on a design, build, finance, operate, and maintain (DBFOM) concession basis by Elizabeth River Crossings Opco, LLC (ERC) comprised of Skanska Infrastructure Development and Macquarie Group. ERC will operate the concession for 58 years. Tolling of the existing Midtown and Downtown Tunnels to help finance the project is expected to commence by January 31, 2014.

Cost

Est. Total Cost: $2,089 million

Funding Sources

Senior Debt (Private Activity Bonds) - $675 million

TIFIA loan - $422 million

Equity Contributions - $272 million

Public Funds - $408 million

Toll Revenues - $268 million

TIFIA Capitalized Interest - $43 million

Project Delivery / Contract Method

DBFOM (design, build, finance, operate, and maintain)

Project Partner

Elizabeth River Crossings Opco, LLC

  • Skanska Infrastructure Development. Inc.
  • Macquarie Financial Holding Limited

Construction Joint Venture (design-build members):

  • Skanska USA Civil Southeast, Inc.
  • Kiewit Construction Company
  • Weeks Marine, Inc.

Project Advisors / Consultants

Project design:

  • Parsons Brinckerhoff
  • Volkert & Associates, Inc.
  • COWI
  • Systems Support
  • Transdyn
  • Federal Signal - ETC design, installation, O&M

To the Borrower:

  • Macquarie Capital Funds Inc. - Finance
  • Steer Davies Gleave - Traffic & Revenue
  • McGuireWoods Consulting - Public Affairs
  • Orrick, Herrington & Sutcliffe - Borrower's Legal Counsel
  • Hunton & Williams - Borrower's Local Counsel
  • PBS&J - Intelligent Transportation Systems OR Colan Associates - Right of Way
  • Arup - Equity TA/Asset Condition Survey
  • Atkins - Lender's TA and Traffic Advisor
  • Marsh - Insurance

To USDOT TIFIA JPO:

  • TIFIA Legal Advisor - Katten Muchin Rosenman LLP
  • TIFIA Financial Advisor - Scully Capital

Lenders

Bondholders, USDOT TIFIA

Duration / Status

Comprehensive Agreement with ERC signed in December 2011 (commercial close).

Financial close: April 12, 2012

Construction start: mid-2012

Expected completion: 2017

Duration of concession: 58 years

TIFIA Credit Assistance

Direct Loan: $422 million

The TIFIA loan will be repaid with toll revenues. TIFIA is further secured by a fully funded debt service reserve fund.

Financial Status / Financial Performance

TIFIA credit agreement was executed on April 12, 2012

Innovations

  • Virginia's Commonwealth Transportation Board issued its first GARVEE bonds under the Commonwealth of Virginia Federal Transportation Grant Anticipation Revenue Notes Act of 2011 to provide the public subsidy to support the project's private financing.

Related Links / Articles

Project Website

Virginia Office of Transportation Public-Private Partnerships

Contacts

P3 project development and procurement:

Ryan Pedraza
Program Manager, Office of Transportation Public-Private Partnerships
600 East Main, Suite 2120
Richmond, VA 23219
Tel: (804) 371-9870
ryan.pedraza@vdot.virginia.gov

Project construction:

Frank Fabian, PE
152 Tunnel Facility Drive
Portsmouth, VA 23707
Tel: (757) 396-6800
frank.fabian@vdot.virginia.gov