The San Diego Association of Governments has refinanced a transportation loan for the Mid-Coast Trolley project, which could save more than $123 million during the life of the 25-year loan, it was announced Tuesday.
The Transportation Infrastructure Finance and Innovation Act loan was refinanced from 2.72% to 1.75%, and comes in the final year of construction of the Mid-Coast Trolley project, which will extend the UC San Diego Blue Line trolley 11 miles, from Old Town to the University community. The project will add nine new trolley stations, including two on the UC San Diego campus. Service is expected to begin in late 2021.
“Refinancing the loan for the largest infrastructure project in the region’s history is great news for the region,” said Catherine Blakespear, SANDAG chair and Encinitas mayor. “Reducing the long-term borrowing costs for this project means there is more money available for other critical transportation projects.”
In March 2020, when the Federal Reserve cut interest rates and the 30- year treasury rate dropped, SANDAG staff requested discussion with the U.S. Department of Transportation’s Build America Bureau to investigate options to lower the TIFIA loan. By July, a strategy was in place and work began to replace the earlier loan agreement with a new, lower-rate agreement.
In November 2020, SANDAG’s Board of Directors voted to reduce the total debt service and approved the refinancing of the TIFIA loan.
SANDAG was awarded the initial $537.5 million TIFIA loan from the Build America Bureau in June 2017.
— City News Service