The I-4 Ultimate Project: Florida's Innovative P3 Success Continues
As Central Florida's population grew, it became clear that the I-4 – the 50-year-old local highway traveled by millions of tourists heading to region's major theme parks and attractions – needed an overhaul.
The Florida Department of Transportation (FDOT) in September 2014 reached commercial and financial close on the $2.3 billion I-4 Ultimate Project – the largest greenfield availability payment (AP) transaction ever undertaken in the United States. The project is the latest in a string of P3 successes for FDOT and underscores its status as a trendsetter in the arena.
Reconstructing 21 miles of the I-4 through Orange and Seminole counties in the urban Orlando area, the design adds four variable tolled Express Lanes to existing free general use lanes to help smooth traffic flow and creates a signature corridor with aesthetics and landscaping to convey the "Florida Experience." To implement the project, FDOT entered into a 40-year concession agreement with I-4 Mobility Partners – a consortium led by Skanska Infrastructure Development and John Laing Investments – for the design, construction, financing, operation and maintenance of the project.
Working together, Nossaman, FDOT and other agency advisors devised a series of smart, innovative strategies to ensure the project's effective closing and delivery. For instance, FDOT:
- Communicated with the U.S. Department of Transportation early in the procurement process, fostering a productive relationship that facilitated negotiation and closing of $949 million in Transportation Infrastructure Finance and Innovation Act (TIFIA) financing, the largest loan ever secured through the TIFIA program. FDOT was the first public agency to use a new streamlined TIFIA term sheet process, which helped to reduce the time required to negotiate and close the TIFIA loan following selection of the winning proposer.
- Secured a $2 billion PAB allocation, the largest appropriation under the Private Activity Bond program to date, although the ultimate financing structure did not include PAB financing.
- Raised the project's quality through the use of project technical enhancements, including direct connection ramps from the Express Lanes to an adjacent highway, as well as additional auxiliary lanes at various sections of the I-4 to expand capacity and cut congestion. Even with I-4 Mobility Partners' proposal enhancements, the consortium's final bid was $860 million less than the highest financial proposal FDOT received.
In addition to its work on the I-4, Nossaman continues to assist FDOT on contract administration matters for the agency's I-595 Corridor Roadway Improvement Project and Port of Miami Tunnel Project – the first and second availability payment P3 transactions in the country. Both projects opened to traffic in 2014. Construction on the I-4 began in February 2015, and completion is anticipated in 2021.
I-4 Ultimate has earned several awards including Project Finance International's "Americas Transportation Deal of the Year," IJ Global's "North American Transport Deal of the Year," and Trade Finance magazine's "Deal of the Year."