Fairfax Gets Second Lowest Interest Rate Ever for Federal Loan for Silver Line Phase 2 Financing
Dec. 18, 2014
Fairfax County officially closed on its $403 million, low-interest federal loan yesterday that will help pay for the construction of the Silver Line’s second phase. The county received the second lowest interest rate in the history of the Transportation Infrastructure Finance and Innovation Act (TIFIA) loan program—a 2.73 percent rate.
Only the state of Maryland received a lower rate for it's Intercounty Connector in 2009 during the height of the nation's recent recession. The U.S. Department of Transportation approved a 2.56 percent interest rate through their TIFIA loan program.
Fairfax also earned the lowest rate among all of the new rail line's partners. By comparison, the Metropolitan Washington Airports Authority closed on their $1.3 billion loan at a 3.20 percent interest rate in August, and Loudoun County closed on their $195 million loan at a 2.87 percent rate on December 9.
This is what $403 million looks like. We closed on our federal loan to help pay for the #Silver Line-and we got the second lowest interest rate in the history of the program: a 2.73 percent interest rate. Get ready to ride the new rail line's second leg in 2018.
The loan will cover about 45 percent of the county’s total estimated $915 million share for building the new rail line. It offers a competitive interest rate and flexible repayment terms. The county may defer payments for five years after the project is finished. Because the Silver Line is expected to be completed in 2018, the county anticipates making payments starting in 2023.
“With Phase 1 on track to meet or even exceed ridership projections, I am very pleased to have approved low-interest federal financing for Phase 2,” said Fairfax County Board of Supervisors Chairman Sharon Bulova. “The funds made available through the TIFIA loan keep the project on target for completion in 2018 and reduce costs for toll road users and taxpayers. The Silver Line is vital to the economic growth of Fairfax County, the region and the Commonwealth, and I am proud of the work we’ve done to make it a reality.”
Fairfax plans to use two county sources to repay the loan—money from the Dulles Rail Phase 2 Transportation Improvement District and Commercial and Industrial Tax Fund . The county will apply $218.2 million from this voluntary tax district and $185.1 million in commercial and industrial taxes.
The TIFIA loan was key to the 2011 financing deal to build the new rail line’s second leg. The DOT agreed to lend almost $1.9 billion in total to Fairfax County and the project’s two other partners, the Metropolitan Washington Airports Authority and Loudoun County.
Under the 2011 deal, Fairfax County agreed to use its best efforts to find money to build the parking garages at the Herndon and Innovation Center Metrorail stations. The county plans to construct these two garages that it will own and operate. They will be largely paid for through revenue bonds that will be repaid with parking fees at the two facilities. The Board of Supervisors approved a future bond sale at their Nov. 18, 2014, meeting, and officials expect the bonds may be sold in winter 2016.
The estimated total cost for the entire Silver Line rail project comes in at $5.6 billion dollars. The project’s partners agreed to split total costs as follows: 16.1 percent by Fairfax County; 4.8 percent by Loudoun County; 4.1 percent by the Metropolitan Washington Airports Authority; and 75 percent (less any federal and state funding) by Dulles Toll Road revenues.
Of the county’s entire estimated $915 million share for the new rail line, $730 million—or approximately 80 percent—will be paid for by two voluntary, special tax districts created by landowners. They are the Dulles Rail Phase 1 Transportation Improvement District and Dulles Rail Phase 2 Transportation Improvement District.
The Silver Line’s first five stations opened in July 2013, running from Tysons to Wiehle Avenue in Reston. The line’s second phase runs from Wiehle Avenue in Fairfax County to Route 772 in Loudoun County.