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U.S. Department of Transportation Announces Closing of First Loan to Support Transit-Oriented Development

U.S. Department of Transportation Announces Closing of First Loan to Support Transit-Oriented Development

Community project in Mt. Vernon, Washington, was able to save $3 million by utilizing ultra-low-interest loans through DOT’s Build America Bureau

WASHINGTON – The U.S. Department of Transportation (DOT) today announced that its Build America Bureau has approved its first Transit-Oriented Development (TOD) TIFIA loan for up to $26.8 million for the Mt. Vernon Library Commons Project in Washington state. The project includes a multi-use building with a public library, community center, meeting rooms, commercial kitchen, parking garage, public restrooms, STEM center, computing space, and numerous electric vehicle (EV) chargers. The project, slated to be completed this summer, encompasses half a city block in downtown Mount Vernon, WA, and will be a short walk from Skagit Station, Skagit County’s multi-modal transportation center. 

TOD is a new but fast-growing category within DOT’s Build America Bureau, which offers below-market rate financing on infrastructure projects. The Bureau has 20 projects under development and two in the credit underwriting process. Projects range from public buildings, affordable housing to community redevelopment. In total, requests are more than $12 billion in long-term financing, currently representing one-third of the Bureau’s pipeline of projects to be financed.

“Having a library, public restrooms, a community center, and a kitchen all under one roof—and only steps away from Skagit station—will be a major benefit for the people of Mount Vernon,” said U.S. Transportation Secretary Pete Buttigieg. “This is the first of what we hope will be many TOD loans that will make vital resources more accessible to more people, especially historically overlooked communities.”

The Mt. Vernon project is not just a building, but a new community asset. It will provide EV charging along the I-5 Alternative Fuel Corridor, install sidewalk and signalized crosswalk improvements in line with ADA compliance, reduce the building’s ecological footprint through low-carbon architecture and solar power generation, and catalyze the local and regional economy by encouraging private investment in nearby mixed-use development.

The project is financed through the Transportation Infrastructure Finance and Innovation Act’s (TIFIA) Rural Project Initiative for up to 49 percent of the project costs with an interest rate equal to half the Treasury rate. As a rural project, DOT was able to provide additional financial support by waiving advisor fees.  

“The Mt. Vernon project exemplifies the opportunity to combine grants and financing from multiple federal programs to deliver a transformational TOD project,” said Bureau Executive Director Morteza Farajian. “By offering an extremely low interest rate of around 2.25 percent, the TIFIA Rural Project Initiative provides notable financial savings that allow the City to invest in other key projects and services.” 

In addition to the loan from the Build America Bureau, USDOT’S Federal Highway Administration awarded the City of Mount Vernon $12.5 million in funding through the Charging and Fueling Infrastructure Discretionary Grant Program for Fiscal Year 2022-2023 to install 78 EV charging ports in the project’s parking garage. The project design allows for another 200 charging ports in the future, creating what could be the nation’s largest regional EV charging hub. The project is also receiving financial assistance through the Section 108 Loan Guarantee Program administered by the U.S. Department of Housing and Urban Development.

“The TIFIA loan product is the absolute best financing that a small rural city like ours can utilize. The length of the loan and incredible interest rate made our project doable with our city budget. The interest rate saved $3 million over traditional financing. Our project would not have been possible without this tool,” said Jill Boudreau, Mayor Emerita, Project Administrator, Mount Vernon Library Commons.

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The Build America Bureau advances investment in transportation infrastructure by lending Federal funds to qualified borrowers; clearing roadblocks for credit worthy projects; and encouraging best practices in project planning, financing, delivery, and operations. The Bureau draws on expertise across DOT to serve as a point of coordination for states, municipalities, private partners, and other project sponsors seeking Federal financing and technical assistance.

Official news published at https://www.transportation.gov/briefing-room/us-department-transportation-announces-closing-first-loan-support-transit-oriented

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