I-495 Express Lanes Extension Project Detail-Level

I‐495 Express Lanes Extension Project Detail‐Level Project Screening Report

This report and recommendation is part of the screening process used by the Virginia Office of Public‐ Private Partnerships (“VAP3”) to assess the suitability and desirability of delivering a project under the Public‐Private Transportation Act (“PPTA”) of 1995, as amended. If the Agency Administrator decides to advance the project under the PPTA based on the findings presented in the Detail‐Level Screening Report, then the VAP3 Director and the Agency Administrator will submit the findings and recommendations to the PPTA Steering Committee for review and consideration.

PROJECT BACKGROUND Date: 11/24/2014

Project Name: I‐495 Express Lanes Extension Project

Sponsoring Agency: VDOT

Project Concept Source: Solicited

VIRGINIA P3 OFFICE RECOMMENDATION

Proceed with adding project to PPTA prioritization list? Yes No

Executive Summary recommendations from VAP3:

The I‐495 Express Lanes Extension Project (the “Project”) would add two Express Lanes in each direction for an approximate two‐mile roadway section of I‐495 (see Figure 1). The existing I‐495 Express Lanes opened to traffic in 2012 and comprised 14 miles of Express Lanes from the Springfield Interchange to just south of Old Dominion Drive. The two‐mile extension would begin just south of Old Dominion Drive and extend north to the George Washington Memorial (“GW”) Parkway (see Figure 2). The Project would be located within Fairfax County, which is one of the most densely populated localities in Virginia, and address the increasing travel demand in the Northern Virginia area by adding capacity to the existing roadway.

The I‐495 Northern Section Shoulder Use Project (the “Shoulder Project”) is currently under construction in the Project area. The Shoulder Project provides for the use of the northbound shoulder as a travel lane during peak periods. While this project will improve the performance, it cannot fully address the specific congestion and safety issues present in the Project area and thus a longer term solution, such as the Project, is needed.

This report compares a Toll Concession Public‐Private Partnership (“P3”), which is a design‐build‐ finance‐operate‐maintain (“DBFOM”) delivery model, against a two design‐build (“DB”) delivery models.

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The two DB delivery models are: (1) DB‐State Toll, in which the Virginia Department of Transportation (“VDOT”) operates and maintains the toll facility; and (2) DB‐Lease, in which the current operator of the existing I‐495 Express Lanes operates and maintains the toll facility.

Under the Toll Concession P3 delivery model, the Project could be delivered five years earlier and cost approximately $600M over the lifecycle of a two‐year construction period and 30‐year O&M concession period. The approximate total lifecycle cost includes: $340M for construction, $50M for O&M and $210M for private financing. This model would require an approximate $265M upfront public subsidy, which is about 78% of the initial construction cost of $340M. The high subsidy amount is needed because the potential toll revenue of $335M is not large enough to cover the approximate $600M total project lifecycle cost. Thus, the Project delivered as a Toll Concession P3 provides little opportunity to leverage debt.

Furthermore, a Toll Concession P3 delivery model limits the competition amongst proposers due to the Project’s short length and close proximity to the existing operation of the current I‐495 Express Lanes. Limited competition may result in only one proposer, the current operator of the existing I‐495 Express Lanes. If the scope of the Project were to be extended across the American Legion Bridge into Maryland, then it may draw more private sector interest and competition. This may potentially make a better case for delivering the Project as a P3. The Maryland Department of Transportation (“MDOT”), however, currently has no plans to expand the American Legion Bridge and extend the Express Lane network. Due to the large subsidy needed, little opportunity to leverage debt, and limited competition, the Project is not well suited to be delivered as a Toll Concession P3.

While the Project is not suitable for a Toll Concession P3, the two DB delivery models may offer opportunities to capture value and deliver the needed improvements. Both the DB‐State Toll and DB‐ Lease models offer an opportunity to capture value in a competitive procurement process for design and construction of the Project through a DB contract. Furthermore, the DB‐Lease with the current operator of the I‐495 Express Lanes offers the opportunity to take advantage of cost efficiencies by integrating the Project into existing Express Lane O&M activities. Therefore, the VAP3 believes the best value today can be realized through one of these two DB delivery models.

If VDOT decides to move forward with the DB‐Lease, then the potential toll revenue should be taken into consideration because the revenue ($270M) is much greater than the projected O&M costs ($39M) for the Project during the 25‐year O&M period after completion of construction. Potential ways this toll revenue value could be captured by VDOT in a sole‐source procurement for the lease agreement include, but are not limited to:

 transfer certain O&M activities which VDOT is currently responsible for in the comprehensive agreement for the existing I‐495 Express Lanes (such as joint bridge maintenance for the general purpose and Express Lanes) along with the O&M activities for the Project to the lessee in exchange for the toll revenue profits;  receive a payment from the lessee for the rights to operate and maintain the Project and, in exchange, allow the lessee to collect toll revenue; and

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 retain the toll revenue risk and pay the lessee a fixed fee for O&M.

In conclusion, at this time, the VAP3 recommends not advancing the Project for further consideration as a Toll Concession P3 under the PPTA. As an alternative, the VAP3 recommends VDOT advances with a DB delivery model for the Project.

Agency Concurrence: Yes No

Signature Date

Charlie A. Kilpatrick, P.E., Commissioner of Highways

Virginia Department of Transportation

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PRELIMINARY SCHEDULE

Completed Activities Completion Date

 High‐Level Screening Report May 2014

 Detail‐Level Screening Report November 2014

P3 Activities with a Completion Date to be Determined:

 National Environmental Policy Act (“NEPA”) Documentation and Federal Highway Administration (“FHWA”) NEPA Approval  IJR Documentation and FHWA Approval  Request for Qualifications (“RFQ”)  Request for Proposals (“RFP”)  Expected Commercial/Financial Completion

TRANSPORTATION NEED/SCOPE/APPROACH STATEMENT Description:

The Project would be located within Fairfax County, which is one of the most densely populated and fastest growing localities in Virginia, resulting in an increasing travel demand. The two‐mile Project area of I‐495 begins just south of Old Dominion Drive and extends north to the George Washington Memorial (“GW”) Parkway (see Figures 1 and 2).

I‐495 is a divided, urban interstate with four general purpose lanes and two Express Lanes, which extend from the Springfield Interchange to just south of Old Dominion Drive, in each direction. The existing I‐ 495 Express Lanes opened to traffic in 2012 and comprised 14 miles. The posted speed limit is 55 mph along the general purpose lanes and 65 mph along the Express Lanes. Within the Project area, the I‐495 general purpose lanes intersect Georgetown Pike and GW Parkway with grade‐separated interchanges. Georgetown Pike is a two‐lane undivided, urban minor arterial and, in the Project area, serves primarily residential development. George Washington Memorial Parkway is a four‐lane divided, urban principal, which is a commuter route to and from Washington, D.C.

This Project would add two miles of Express Lane capacity (two lanes in each direction) at the northern terminus of the I‐495 existing Express Lanes, where the northbound Express Lanes merge into a single lane that then merges with the four general purpose lanes just south of Old Dominion Drive. Direct access ramps from the Express Lanes to the Georgetown Pike and GW Parkway are also included in the improvements. The northern terminus of the extension will be just north of the GW Parkway and allow vehicles to merge into general purpose lanes prior to the American Legion Bridge.

Vehicle back up at the northern terminus of the existing Express Lanes into the general purpose lanes has created a northbound bottleneck, resulting in general purpose lane queues during peak hours which extend approximately 2.5 miles to the Route 7 interchange. Additionally, crashes due to this congestion

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and weaving movements of vehicles from the Express Lanes to the exit at the Georgetown Pike interchange have created safety issues in the Project area. The Project improvements discussed above provide an opportunity to improve these specific congestion and safety issues and connect the Express Lane network to additional major roadways.

This report compares a Toll Concession P3, which is a DBFOM delivery model, against a two DB delivery models. The two DB delivery models are: (1) DB‐State Toll, in which VDOT operates and maintains the toll facility; and (2) DB‐Lease, in which the current operator of the existing I‐495 Express Lanes operates and maintains the toll facility. Depending on tasks and risk allocation, there could be variations of these delivery options. If advanced as a Toll Concession P3 project, then the applicable factors will be assessed in greater detail during Project Development.

SCREENING CRITERIA‐DESIRABILITY

Public Need (i.e. congestion, safety, new capacity, preservation of existing assets, etc.)?

Yes No TBD

Safety

According to crash data1 collected along northbound I‐495 from the Dulles Toll Road interchange to the American Legion Bridge over an approximate nine month period starting November 17, 2012 (the opening of the existing I‐495 Express Lanes), a total of 81 crashes were recorded in the study area (see Figures 3 and 4). Of the 81 crashes recorded, 57 (approximately 70%) of the crashes occurred between south of Dulles Interchange to the off‐ramp at Georgetown Pike. Of these 57 crashes, 70% were rear end crashes and 14% were sideswipe crashes and the most common contributing circumstances recorded by police officers were congestion and vehicles changing lanes. Furthermore, the segment between Old Dominion Drive and the off‐ramp to Georgetown Pike had the highest crash density with a crash rate of 152 (per 100 million VMT), which is far above the Northern Virginia Average Interstate Crash Rate of 99 (per 100 million VMT).

Points of congestion

A major point of congestion is at the merge site of the existing Express Lanes into general purpose lanes where a bottleneck has developed. In the PM peak traffic period, this bottleneck results in the northbound general purpose lane queues extending south of the Route 7 interchange (approximately 2.5 miles) and the Express Lanes northbound queues extending to the middle of the Dulles Toll Road

1 Note: Crashes are somewhat random events and crash frequencies naturally fluctuate over time, which is why three or more years of crash data is typically used to document the crash history. Short‐term crash frequencies are often not as reliable as long‐term crash frequency measures. Due to the opening of the Express Lanes facility in November 2012, an “initialization” period immediately following the opening when motorists were becoming accustomed to the new operation likely could have contributed to the frequency of crashes. Crash data prior to November 2012 was not available for this report.

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interchange (approximately 1 mile). The Project provides an opportunity to improve this specific congestion issue by allowing for better management of traffic flow along the Express Lanes and by connecting the original Express Lane network to Georgetown Pike and GW Parkway.

New capacity

Adding Express Lane capacity to the proposed Project area would accommodate for a growing travel demand along I‐495. Furthermore, the opening of the I‐95 Express Lanes in December 2014 will most likely increase current traffic along I‐495, making the need for new capacity even greater. Thus, the Project would benefit all motorists by improving congestion on the general purpose lanes and decreasing the time commuters spend daily in congested traffic.

I‐495 Northern Section Shoulder Use Project

Currently, the Shoulder Project, a transportation system management strategy, is under construction in the Project area. The project would provide traffic safety improvements by converting approximately two (2) miles of left shoulder on I‐495 northbound into a travel lane during peak hours. The purpose as set forth in the Shoulder Project NEPA document is to alleviate impacts of the extended queues during peak travel periods and disruptions associated with weaving movements. This Shoulder Project enhances the performance of I‐495 without substantially widening the roadway.

While this project will improve the performance, it cannot fully address the specific congestion, safety and capacity issues present in the Project area and a longer term improvement solution is needed to better address these issues. Thus, this project is intended to be an interim measure prior to longer term improvements, such as the Project (known as “Project Next” in the Constrained Long‐Range Transportation Plan (“CLRP”)).

Public Benefits?

Yes No TBD

Safety Improvements

Safety is a top priority for the Commonwealth, especially VDOT, which aims to reduce fatalities and injuries on all roadway systems. High traffic volumes and high crash rates make a focus on safety essential for I‐495. The extension adds improvements to reduce congestion and weaving movements allowing for a reduction in crash rates, especially from the Dulles Interchange to Georgetown Pike.

Mobility

VDOT strives to ensure the efficient and reliable movement of people and goods throughout the I‐495 corridor. As future demand grows and additional Express Lane projects come on line, providing efficient

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and reliable movement along I‐495 will be challenging. Thus, the Project’s improvements will help manage traffic and congestion better, ultimately benefiting all users of the interstate.

Economic Development?

Yes No TBD

I‐495 functions as an important commuter corridor that daily links residents of Virginia, Maryland and Washington, D.C. The improvements will support and facilitate local and regional economic development efforts through effective development of critical improvements and operation of I‐495. While the future economic development is not expected to be on the same order of magnitude as the existing I‐495 Express Lanes due to the reduced size and extension of an already existing facility, the Project is still expected to have positive economic development effects from new and expanding facilities along the I‐495 corridor and in the region, especially the Tysons Corner area.

Market Demand for PPTA Delivery (Note: this measure is only applicable to Solicited Projects; Unsolicited Proposals do not need to address this issue as private entities demonstrate market demand through the submission of their Proposal.)

Yes No TBD

The Project’s short length (approx. two miles) and close proximity to the existing operation of the existing I‐495 Express Lanes concession may limit competition amongst potential proposers. Potentially only one concessionaire would be interested, which is the current operator of the existing I‐495 Express Lanes. Formal market soundings, however, have not taken place at this stage of the analysis. Formal industry feedback would be sought after the Project is advanced to Project Development.

Stakeholder Support?

Yes No TBD

The National Capital Region’s 2013 CLRP includes the extension of I‐495 Express Lanes between south of Old Dominion Drive and south of the GW Parkway. The extension, however, is not included in the Virginia Department of Transportation’s Six‐Year Improvement Program (“SYIP”); thus, it would need to be added to the program.

Stakeholder outreach will be necessary should VDOT decide to explore a P3 or DB‐Lease delivery model. Since this project is an extension of an already existing facility, the upfront amount of outreach will not be as extensive as the original Express Lanes project. General support for the original Express Lanes and increase in usage is a positive for stakeholder support of this Project.

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Adjacent to the Project, George Washington Memorial Parkway, Scotts Run Stream Valley Park, Georgetown Pike and Scotts Run Nature Preserve are all 4(f) resources (see Figure 5). Furthermore, Scotts Run Nature Preserve is designated as a 6(f) resource. Due to expanding right‐of‐way (“ROW”) impacts on these conservation lands, stakeholder support for this Project from FHWA and the National Park Service may be difficult to obtain and thus close coordination with these entities will be needed.

SCREENING CRITERIA FOR FEASIBILITY Key Constraints or Assumptions?

For the purpose of the analysis in this report, the key constraints or assumptions regarding project scope include:

 Existing I‐495 cannot effectively accommodate the current and projected passenger vehicle volumes, resulting in traffic congestion and safety concerns  The importance of I‐495 to the regional and state economy continues to increase due to continued economic development and fast growth of Fairfax County  The final build condition is two Express Lanes and four general purpose lanes in each direction  The two interior lanes over the I‐495 Project area to be converted into Express Lanes in each direction (20% of this existing pavement area will be upgraded)  Two new lanes of pavement will be constructed over the I‐495 Project area in each direction and replace the general purpose lanes that are consumed by the Express Lanes  Direct access from both Georgetown Pike and the George Washington Parkway Interchanges to the Express Lanes

For the purpose of the analysis in this report, the key constraints or assumptions regarding financial analysis include:

Under all three delivery models:  Design, construction management and contingency are included in the construction estimates  Construction estimate does not include development costs, including the costs associated with revising a NEPA document or an Interchange Justification Report (“IJR”)  Pricing does not include the costs associated with VDOT oversight and utility relocation  Construction escalation is assumed as 4%  O&M and toll revenue escalation are assumed as 2.5%  Preliminary ROW estimates are included in the cost estimate, but would need to be reanalyzed as the scope and design are better defined

Under the P3 Toll Concession delivery model:  The concessionaire maintains the entire project for 30 years after substantial completion of construction  The current operator of the I‐495 Express Lanes will integrate the O&M for the Project with the existing operation, which means certain cost efficiencies were assumed within the estimate

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 The private financing package includes federal assistance in the form of a direct loan provided through the Transportation Infrastructure Finance and Innovation Act (“TIFIA”) program

Under the DB‐State Toll delivery model:  The lessee maintains the entire project for 25 years after substantial completion of construction  The lessee is the current operator of the existing I‐495 Express Lanes and will integrate the O&M for the Project with the existing operation, which means certain cost efficiencies were assumed within the estimate  VDOT O&M costs are assumed for the five year delay in construction of the Project compared to the DBFOM

Under the DB‐Lease delivery model:  VDOT maintains the entire project for 25 years after substantial completion of construction  VDOT’s O&M responsibility is assumed to require more capital maintenance improvement due to deferred maintenance  VDOT O&M costs are assumed for the five year delay in construction of the Project compared to the DBFOM

Technical Feasibility (including environmental approvals and project schedule)?

Yes No TBD

Project Approach

The Express Lane concept is viable from a technical perspective, but additional study and an operational analysis must be undertaken to evaluate the benefits and trade‐offs of the two direct interchanges proposed in this scope.

Project Procurement Schedule

A detailed project procurement schedule will be prepared if the Project is advanced. The PPTA Implementation Manual and Guidelines (2014) provides for a specific project framework.

Technology

From a tolling technology perspective, there are proven technologies for open road tolling, all electronic tolling and photo‐detection tolling available for use within the corridor. There are no other known obstacles regarding technology feasibility.

Needed Approvals

The Project will require a NEPA document, an IJR and an U.S. Army Corps of Engineers permit, as well as other federal requirements, because the Project is located on an interstate. Federal dollars may be used as part of the financial plan.

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Systematic Interface and Compatibility?

Yes No TBD

The I‐495 Express Lane Extension will be designed to work seamlessly with the original I‐495 Express Lanes and efficiently connect interchanges to intersecting roadways. The concept is consistent with and furthers an Express Lane network in the Northern Virginia area.

Financial Feasibility?

Yes No TBD

Financial feasibility was analyzed under three delivery models: (1) a Toll Concession P3 (DBFOM); (2) a DB‐State Toll (VDOT operates and maintains the toll facility); and (3) DB‐Lease (the current operator of the existing I‐495 Express Lanes operates and maintains the toll facility). The table below presents a summary of the financial analysis (net present values are included in Figure 6).

Table 1: Financial Analysis in Nominal Values

DB Alternatives Toll Concession P3 Delivery Model DB‐State Toll DB‐Lease DBFOM

Assumptions Construction Start Date 2021 2021 2016 Construction Term 2 2 2 O&M Term (Years)252530 O&M Responsibiltiy VDOT Lessee Concessionaire

Estimated Project Costs Construction Cost $410M $410M $340M Private Sector Debt ‐‐$60M Private Sector Equity ‐‐$15M Public Subsidy $410M $410M $265M O&M Cost $55M $40M $50M Pre‐Construction $1M $1M ‐ Post‐Construction $54M $39M $50M Financing Cost ‐‐$210M Total Project Lifecycle Cost $465M $450M $600M

Projected Revenue Potential Revenue $270M $270M $335M Total Project Lifecycle Cost Net Revenue $195M $180M $265M

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It should be noted the development costs associated with the NEPA document and IJR development are not included in the estimated construction cost. These costs are anticipated to be approximately $2.5‐ $3.5M. In addition, the financing cost for VDOT to issue bonds in order to fund the public subsidy is not included in this analysis. If VDOT issues bonds for the public subsidy, then the financing cost for all three models would increase.

The results of the preliminary financial analysis show the Toll Concession P3 delivery model could deliver the Project five (5) years earlier and cost approximately $600M over the lifecycle of a two (2) year construction period and 30‐year O&M concession period. The total lifecycle cost includes: $340M for construction, $50M for O&M and $210M for private financing. This model would require an approximate $265M upfront public subsidy, which is about 78% of the initial construction cost of $340M. The high subsidy amount is needed because the potential toll revenue of $335M is not large enough to cover the approximate $600M total project lifecycle cost. The other $75M (or 22%) of construction cost is the combination of $60M in private sector debt (assumed to be in the form of a TIFIA direct loan) and $15M (or 5%) in private sector equity. Thus, the Project delivered as a Toll Concession P3 provides little opportunity to leverage debt.

 transfer certain O&M activities which VDOT is currently responsible for in the comprehensive agreement for the existing I‐495 Express Lanes (such as joint bridge maintenance for the general

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purpose and Express Lanes) along with the O&M activities for the Project to the lessee in exchange for the toll revenue profits;  receive a payment from the lessee for the rights to operate and maintain the Project and, in exchange, allow the lessee to collect toll revenue; and  retain the toll revenue risk and pay the lessee a fixed fee for O&M.

Lastly, the Project could be a good candidate for TIFIA credit assistance because of the Project’s national and regional significance, as well as a good candidate for a Transportation Investment Generating Economic Recover (“TIGER”) Discretionary Grant because of the improvements in safety for the corridor. The TIGER Discretionary Grant, however, is a maximum of $20M and thus would not make a substantial difference for funding the overall project cost.

Legal/Legislative Feasibility?

Yes No TBD

No amendments or modifications to state or federal legislation are expected to be needed to implement the Project. This Project will need to go through the new House Bill 2 prioritization process and CTB approval will be necessary for the allocation of state and federal funds for the improvements in the SYIP.

Life Cycle Management?

Yes No TBD

A comprehensive agreement for the Project would require the concessionaire to develop a lifecycle maintenance plan and to maintain the lanes at applicable federal and state standards.

For the purpose of the analysis in this report a 30‐year contract term is assumed. Additional analysis in Project Development would be required in order to assess the term in relation to the timing of the improvements and the optimal term for a whole life costing perspective, as well as to address private sector considerations required to recover investment and ability to depreciate improvements.

Project Risks?

Yes No TBD

Significant risks that can be effectively transferred to a concessionaire if the Project proceeds under a P3 delivery model include:

 System integration with existing I‐495 Express Lanes  Performance requirements for operations and maintenance

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 Risks associated with lifecycle deterioration of new or significantly rebuilt assets over a 30‐year term

Risks that can be effectively transferred to the private sector if the Project proceeds under a P3 or DB delivery model include:

 Maintenance of traffic and ability to keep specified lanes continuously available for traffic during construction  Construction and O&M price escalation  Risk that the quantities of work actually performed exceed design estimates  Errors and omissions in design resulting in latent defects in new build  Constructability challenges of the design associated with the interchanges, especially GW Parkway  Disruption due to the failure of DB Contactor or subcontractors

Risks that may not be economically transferrable, but will need to be subject to further study include:

 Limited competition for P3 delivery model  Revenue risk to the Commonwealth  ROW acquisition and delay in hand‐over of ROW  Coordination with FHWA and the National Park Service regarding 4(f) and 6(f) resources, which may be effected by ROW acquisition  Undisclosed geotechnical conditions, e.g. actual geotechnical conditions differ from those presented in investigations  Mitigation credits  Third‐party agreements  Development and implementation of handback processes

The above suggest possible allocations of risk. The final scope and delivery method of the Project, however, would determine the final risk allocation, and, if advanced, the Project would follow the VAP3 Risk Analysis Guidelines.

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LIST OF REFERENCES

1. http://www.mwcog.org/clrp/ 2. http://www.vappta.org/projects.asp 3. http://www.vamegaprojects.com/about‐megaprojects/i495‐hot‐lanes/ 4. http://www.washingtonpost.com/local/trafficandcommuting/drivers‐worry‐what‐happens‐ where‐beltway‐express‐lanes‐end/2012/08/03/9fef7aee‐dd64‐11e1‐9ff9‐ 1dcd8858ad02_story.html 5. http://www.wmal.com/common/page.php?pt=LISTEN:+Why+Aren%27t+More+Drivers+Using+T he+495+Express+Lanes?+The+Answer+Is+E‐Z.&id=16583&is_corp=0 6. Capital Beltway Study Record of Decision 2006 and 2007 7. I‐495 Express Lanes Final Risk Register 8. I‐495 Northern Section Shoulder Use Project Traffic Forecasting and Analysis Report, February 2014 9. I‐495 Northern Section Shoulder Use Project CE, http://www.virginiadot.org/VDOT/Projects/Northern_Virginia/asset_upload_file239_66898.pdf 10. I‐66 Corridor Improvements Project Summary of Initial Risk Workshop, http://www.virginiadot.org/Mini‐sites/PPTA_Projects/I‐66/Assets/documents/I‐ 66_Risk_Workshop_Summary_Report_10_06_2014.pdf

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MAPS

FIGURE 1: PROPOSED PROJECT SCOPE

Source: https://www.mwcog.org/clrp/projects/images/2013/VA_HOT_GWPkwy_OldDominion.jpg

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FIGURE 2: I‐495 NETWORK

American Legion Bridge

The Project

Source: http://integrator//

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FIGURE 3: I‐495 NORTHBOUND CRASH HISTORY – DULLES INTERCHANGE

Source: I‐495 Northern Section Shoulder Use Project Traffic Forecasting and Analysis Report, February 2014

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FIGURE 4: I‐495 NORTHBOUND CRASH HISTORY – LEWINSVILLE ROAD TO AMERICAN LEGION BRIDGE

Source: I‐495 Northern Section Shoulder Use Project Traffic Forecasting and Analysis Report, February 2014

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FIGURE 5: CONSERVATION LANDS

NOTE: The Virginia Outdoors Foundation (“VOF”) is Virginia’s leader in land conservation, protecting more than 725,000 acres in 106 counties and independent cities. VOF is a public organization, created by the Virginia General Assembly in 1966 under Virginia Code § 10.1‐1800 (source: http://www.virginiaoutdoorsfoundation.org).

Source: http://integrator//

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FIGURE 6: FINANCIAL ANALYSIS NET PRESENT VALUE

DB Alternatives Toll Concession P3 Delivery Model DB‐State Toll DB‐Lease DBFOM

Assumptions Construction Start Date 2021 2021 2016 Construction Term222 O&M Term (Years) 25 25 30 O&M Responsibiltiy VDOT Lessee Concessionaire

Estimated Project Costs Construction Cost $275M $275M $295M O&M Cost $20M $15M $20M Financing Cost ‐‐$30M Total Project Lifecycle Cost $295M $290M $345M

Projected Revenue Potential Revenue $80M $80M $110M Total Project Lifecycle Cost Net Revenue $215M $210M $235M NOTE: Present Value Costs are as of January 1, 2015 with a 5.5% discount rate. A discount rate of 5.5% is used to reflect the uncertainty over the realization of associated net revenue.

Source: VAP3

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