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Chicago Department of Aviation Expresses Interest for TIFIA Loan
In September 2012, the Chicago Department of Aviation (CDA) submitted a Letter of Interest to the federal Transportation Infrastructure Finance and Innovation Act (TIFIA) program for a $252 million loan to support its new Consolidated Rental Car Facility. The project will (1) relocate the airport's existing rental car facilities to a new site at Mannheim Road and Zemke Boulevard adjacent to the current Metra station, (2) provide new direct ramps to the facility from Mannheim Road and Bessie Coleman Drive, (3) provide new public parking, and (4) extend the airport's people mover system to the site from its current terminus. This project is a component of the larger O'Hare Modernization Program (OMP).
The project is estimated to cost $765 million, with the majority to be funded by the $8-per-day customer facility charge (CFC) levied since 2010 on car rentals out of O'Hare. These CFC revenues will be pledged toward the project on a pay-as-you-go basis, through traditional bonding, and through the subsidized TIFIA program. The larger OMP will contribute approximately one-fifth of the total budget. The project is expected to reduce traffic congestion and emissions in the central airport area, improve multimodal connections, and provide commercial development opportunities on airport property along Higgins and Mannheim Roads.
The TIFIA program provides low-interest, flexible financing options to major transportation projects via direct loans, loan guarantees, and standby lines of credit. The CDA estimates that the more advantageous TIFIA interest rates will reduce the project's financing costs by $185 million, allowing those resources to be devoted to construction. Moving Ahead for Progress in the 21st Century (MAP-21), the two-year federal transportation reauthorization bill passed last July, authorizes $750 million for the TIFIA program in FY 2013 and $1 billion in FY 2014, subject to annual obligation limitations. In addition to substantially increasing federal resources for TIFIA, MAP-21 also implements several reforms to the project financing and the project selection process. Notably, MAP-21 increases the proportion of project costs that TIFIA is permitted to fund through loans from 33 percent to 49 percent and converts the program from a fixed-date to a rolling application process.
The submittal of a Letter of Interest is the first step in applying for TIFIA assistance. A previous Policy Update describes the application process and provides links to relevant documentation from the U.S. Department of Transportation. In addition to the CDA, the Chicago Department of Transportation also submitted a Letter of Interest to the TIFIA program. CDOT is considering a direct loan or loan guarantee to support its downtown Riverwalk project.