Editor’s Note: The following article is one in a series of six profiles of winners of NCPPP’s 2016 National Public-Private Partnership Awards, which recognize organizations and individuals who have gone above and beyond to advance the concept and implementation of P3s across the country. The winners were honored during P3Connect 2016 in Chicago.
California’s first transportation project to be developed through a public-private partnership is supporting the Presidio’s transformation from a closed military base to an innovative park for the people.
The Presidio Parkway project was launched to replace Doyle Drive, a 1.6-mile, 80-year-old segment of Route 101, built to provide access to the Golden Gate Bridge from the south, connect Marin and San Francisco counties, and link the San Francisco peninsula and North Bay areas. The roadway was named for Frank Doyle, a North Bay banker who advocated for the financing and design of the Golden Gate Bridge.
Although Doyle Drive was designed to serve as the Presidio’s main transportation corridor, it was not intended to provide direct entry to or exit from the Presidio when it was an active Army post. Converted into a national park in 1994, the Presidio now hosts homes and businesses and provides public space for events and outdoor recreation. Reconstruction began in 2009 to bring the roadway up to current highway standards and seismic safety requirements.
The first phase of the $1.1 billion project, which was conducted as a traditional bid-design-build process initiated by the California Department of Transportation, involved demolishing the existing Doyle Drive, and building a replacement bridge, a new southbound viaduct, the southbound Battery Tunnel and a temporary bypass road to permit the construction of two tunnels and a roadway. This phase of the project was largely completed in 2012.
Caltrans selected the Golden Link Concessionaire, LLC consortium in 2011 to deliver the project’s second phase through a 30-year design-build-finance-operate-maintain availability payment P3. This portion of the project, which began in the summer of 2012 and opened to traffic in July 2015, involved construction of the northbound High Viaduct and Battery Tunnel, two Main Post Tunnels, and realigning the Highway 1/101 Interchange. A new Girard Road Interchange will provide a direct local connection with the Presidio.
The new Doyle Drive has many new features, including a landscaped median separating three lands of northbound from three lanes of southbound traffic, the outermost of which are wide enough to accommodate buses and are bordered with outside safety shoulders. There also is an auxiliary outside lane to carry traffic from the northbound Highway 1 to southbound Highway 101 and to a new Marina/Presidio exit. The parkway features two underground tunnel segments topped by parkland, making it a green, integrated part of the national park rather than merely a highway running through it. The new roadway’s design will permit pedestrians and cyclists to cross over or under Doyle Drive at many points in accordance with the Presidio Trails and Bikeways Master Plan. The project has transformed an aging, outdated roadway into a graceful parkway and gateway to San Francisco and the Presidio National Park.
As legal advisor, Nossaman LLP helped Caltrans and the San Francisco County Transportation Authority achieve financial close on the second phase of the Presidio Parkway project in June 2012. The firm advised the two agencies on the procurement, financing and contracts for this project, the state’s first P3 to be conducted under 2009 legislation authorizing this procurement method for transportation projects.
The project is notable for its complex financing structure, which included $45.6 million in equity, $166.6 million in senior bank loans and a $150 million Transportation Infrastructure Finance and Innovation Act loan from the U.S. Department of Transportation.
Nossaman also helped the agencies to confront and overcome legal challenges to the project lodged by opponents who claimed that the project could not legally be conducted through a P3. The California Supreme Court allowed this phase of the project to proceed in 2011.
The P3 procurement approach ensured the reduction of construction costs, the transfer of financial risks to Golden Link Concessionaire, has freed up state funding for other projects and ensured a high-level of maintenance over the life of the 30-year contract.
Nossaman’s successful work on the Presidio Parkway project has helped to pave the way for other transportation P3s in California and is expected to ease the paths others will pursue to conduct similarly innovative procurements.
“As the first public-private partnership project approved by the California Transportation Commission, the commission is pleased to see the timely delivery of the Presidio Parkway P3 project — a project that demonstrates innovation in project funding and delivery,” said California Transportation Commission Chair Lucetta Dunn.
NCPPP awarded the 2016 Infrastructure Project Award to the Presidio Parkway and to the partners that collaborated to deliver California’s first and highly innovative transportation P3: Arup, the California Department of Transportation, KPMG, Nossaman, Parsons Brinckerhoff, the San Francisco County Transportation Authority and Sperry Capital.