The Measure R Independent Oversight Committee this morning approved Metro’s financing plan aimed at securing $160 million in federal Transportation Infrastructure Finance and Innovation (TIFIA) loans for the Regional Connector project.
The committee, which is charged with reviewing the cost-effectiveness of financing Measure R projects, determined this type of federal loan by leveraging Measure R funds would provide a very low interest rate and flexible repayment terms. The TIFIA loan would help supplement needed funding to build the approximately two-mile, $1.399 billion underground light rail project that would connect the Metro Blue, Gold and Expo Lines and streamline rail travel through downtown Los Angeles.
Metro’s treasurer reported that the agency seeks to lock in a low interest rate under the current market environment. Actual loan draws may be deferred for up to five years after the loan is executed, with interest accruing only as proceeds are used and with no change in the original interest rate.
A similar TIFIA loan financing recommendation for the Purple Line Extension project is expected to come before the committee next spring.
The America Fast Forward provision in the most recent multi-year federal transportation bill enhanced the TIFIA program last year, making it possible for Metro to take advantage of low-cost financing with greater flexibility than is available in the public credit markets. Metro plans to seek up to $3.5 billion in these type of loans to build road and transit projects. Read earlier Source post on the TIFIA prgram here.
The committee’s finding will now be considered by the full Metro Board at its Oct. 24 meeting. See committee item here.