Expansion of I-595
• In 1992, Hurricane Andrew triggered a large number of residents in Miami-Dade County to relocate to neighboring Broward County, increasing the latter's population by approximately 200,000 in just two years after the storm. As a consequence, Broward's I-595 expressway became congested far ahead of forecasts made by FDOT. The goal of the expansion was to increase throughput of vehicles in the I-595 corridor.
Private financing
• Traditional pay-as-you-go arrangement for financing infrastructure projects in Florida meant that construction phases for I-595 would occur only as public funding became available. Given the high cost of the I-595 project at more than US$1.5 billion, pay-as-you-go would result in a 20-year construction period-not ideal given the severity of congestion in its present state. Awarding the concession to a private partner was viewed as a faster alternative.
• During evaluation of the final bids for concession in October 2008, Lehman Brothers went bankrupt, precipitating a major disruption in the commercial lending market, making the PABs prohibitively expensive. This prompted ACS to revise their financing plan and negotiate consequential factors, such as refinancing risk. As detailed above, debt financing is based on two tranches of mini perms. The two tranches reflect the two tranches of revenue that FDOT pays. Although the cost of the commercial debt increased during bidding, the cost of the TIFIA loans fell (they are linked to the US Treasury rate), and so the maximum amount of TIFIA loans was used. The commercial banks required additional equity as well.
• ACS was able to deliver European banks as participants in a syndicate loan. These banks would not typically lend in the United States.