SEATTLE – The U.S. Department of Transportation today announced that its Build America Bureau will provide $327 million in low-interest loans to Sound Transit for improvements to its system. By providing Transportation Infrastructure Finance and Innovation Act (TIFIA) and Railroad Rehabilitation & Improvement Financing (RRIF) loans the Bureau helps expedite infrastructure projects and reduce project costs.
The loans will finance three projects:
- Hilltop Tacoma Link Extension (TIFIA loan for $93.3 million, 33% of total $282.7 million cost), which will extend the line by 2.4 miles, build six new stations and relocate one station, purchase five new light rail vehicles, and expand an operations and maintenance facility.
- Elevated Light Rail Platform along Lynnwood Link Extension (TIFIA loan for $79.3 million, 33% of total $240.2 million cost), which will build a new light rail station in North Seattle, add new bus and paratransit facilities, and add sidewalk and bike infrastructure.
- Sounder Access Improvements (RRIF loan for $154.2 million, 49% of total $314.6 million cost) to improve at three stations including construction of new sidewalks and improve street lighting, and expand and improve parking facilities
Sound Transit estimates the loans will save $245 million through 2046, when the agency’s voter-approved expansion plan is to be completed, and a total of $445 million over the entire life of the three loans.
To date, USDOT has closed more than $38.9 billion under the TIFIA financing program, supporting more than $133 billion in infrastructure investments and $7.6 billion under RRIF program.
Seeing that no transit system covers its cost, how can this be a “loan”? Except by our worthless government, loans are only given to cre4ditworthy enterprises or individuals that can pay it back..
It’s not a “loan”, it’s a grant.
Charles,
You are correct. A transit loan, including Brightline’s private activity bonds, will not be repaid from the fare box.
Instead, it is neither a loan, nor a grant. It’s a money shuffle. The feds will loan to the local WA government, and they will pay it back through local taxes (and/or bonds) and possibly higher future taxes collected from local tax payers. By borrowing from the feds, the local WA government. is accelerating the collection of local taxes at below FMV interest rates to be paid back in cheaper (when inflation is taken into account) dollars. Worst case, and from both of our perspectives – being non-residents – we are subsidizing WA’s accelerated transit expansion and deriving no benefits from it. But then, that could be said about ANY government project; which is why going back to FDR, they always try to distribute funds to “worthy” projects “equally” across the every congressional district.
The $64,000 question is whether the benefits from building the project will be greater than the accumulative costs of not building it. I believe most transportation projects are worthy of consideration. However, I would like to see the environmental assessment and review, the public comment period and the preliminary engineering process be streamlined. I.e., let’s spend the money on building it, rather than studying and enriching consultants!