Port of Everett First Port to Secure Federal Rail Loan
Date: Nov 2, 2018
Everett, Wash. – “As they said in Star Trek, to boldly go where no man has gone before … or in our case, to boldly go where no Port has gone before,” said the Port’s Chief Financial Officer as he asked for the Port Commission’s approval of the Federal Rail Rehabilitation Improvement Financing (RRIF) Loan last week.
On October 23, the Port Commission approved a $5.949 million RRIF loan with the U.S. Department of Transportation Build America Bureau for two key infrastructure projects that support the Port’s Seaport Modernization efforts. The Port of Everett is the first Port to make it through the complex loan process.
“I’ve been proud to work with the Port of Everett to secure federal investments to ensure the Port continues to meet the demands of the 21st century economy, and I’m thrilled to see the federal government bring even more resources to the table. This investment will help complete vital modernization projects and support an important economic hub in Washington state,” said U.S. Senator Patty Murray (D-WA), a senior member of the Senate Appropriations Committee.
“You can’t have a big league economy with little league infrastructure. Safe and efficient rail infrastructure supports thousands of jobs in Washington state. This loan will help the Port of Everett expand rail capacity and alleviate local road congestion, an issue Snohomish County knows well,” said Congressman Rick Larsen (D-WA).
The two projects financed under the RRIF loan were the Port’s Terminal Rail Improvements Phase II and the Cargo Transit Shed Relocation Project. These two projects, which are now complete, increased the Port’s on-terminal rail footprint from 9,200 lineal feet to 12,500 lineal feet, and provides nearly 40,000 square feet of covered warehouse space for rail loading. Given the Port’s location on the BNSF mainline, enhanced on-terminal rail capacity and more seamless ingress and egress is vital to ensuring efficient freight mobility on the mainline from Seattle to Canada and east along the northern corridor.
“Completing critical infrastructure upgrades like this will better position the Port and its facilities to handle the larger vessels and heavier cargoes and other opportunities on the horizon,” said Glen Bachman, Port of Everett Commission President.
The loan is attractive because it is interest only for the first five years of the investment, stretches up to 30 years, and is fixed at the current treasury yield of 3.32% and does not include a pre-payment penalty.
The RRIF program, which includes $35 BILLION in available funding, was streamlined as part of the 2016 Grow America Act. Specifically, the Act said it “… will strengthen RRIF by reducing the cost of obtaining a loan, making RRIF more accessible, a vital tool for short line and regional railroads.”
“This funding will help fund a key port in Washington state to handle more cargo, thereby helping our country remain competitive in the increasingly global economy,” said U.S. Transportation Secretary Elaine L. Chao in an agency release.
Since 2002, USDOT has issued 35 loans totaling more than $2.7 billion across 27 states. Most loan applicants and recipients were passenger train service providers, such as Amtrak, or large railroad corporations.
“USDOT has very attractive infrastructure financial tools that the Port would like to access to support our international trade and economic development,” Port of Everett Acting CEO Lisa Lefeber said. “Navigating the complex permitting, regulatory and financial requirements to close a federal loan requires advanced planning, diligence, lots of patience and back-up plans. Even though it is a relatively small loan amount, we stayed course because if successful, it would open up opportunities for larger projects in the future. Our diligence paid off, and we now have a financial contract framework to apply to other projects and USDOT loan programs in the future.”
The Port utilizes rail to support U.S. exports and imports, including the aerospace, construction, manufacturing, energy, agricultural and forest products industries. The project allows the Port to safely and efficiently transport goods from ship to shore, with cargo arriving and departing the terminals utilizing rail as well as trucks. The use of rail service for the cargo shipments has the potential to eliminate at least 429 million commercial truck miles off of the local roads and highways. Additionally, these projects will retain and help grow the Port’s 13,614 direct trade-related jobs, and provide approximately 145 construction jobs.
For more information, contact Lisa Lefeber at lisam@portofeverett.com or by phone at 425.388.0617.
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About the Rail Rehabilitation Improvement Financing (RRIF) Loan Program
The RRIF program provides direct Federal loans and loan guarantees to finance development of railroad infrastructure and is intended to make funding available through loans and loan guarantees for railroad capital improvements. The RRIF program was established by the 1998 Transportation Equity Act for the 21st Century (TEA-21) and amended over the years in the various transportation packages.
Under this program the FRA Administrator is authorized to provide direct loans and loan guarantees up to $35.0 billion to finance development of railroad infrastructure. Up to $7 billion is reserved for projects benefiting freight railroads other than Class I carriers.
The funding may be used to:
- Acquire, improve, or rehabilitate intermodal or rail equipment or facilities, including track, components of track, bridges, yards, buildings and shops;
- Refinance outstanding debt incurred for the purposes listed above; and
- Develop or establish new intermodal or railroad facilities
About the Port of Everett Seaport
The Port of Everett, located 25 miles north of Seattle, is a strategic self-operating seaport that supports nearly $30 BILLION worth of U.S. exports annually, the largest customs district in Washington State. Everett is home to The Boeing Company’s largest manufacturing facility and also homeport to Naval Station Everett. Its regional transportation network supports more than 35,000 jobs and $313 million in state and local tax revenue. Everett’s seaport is a strategic port that specializes in high-value, over dimensional cargoes. Most notably, the Port of Everett serves as an extension of the aerospace manufacturing process, and plays a critical role in the industry’s just-in-time-delivery schedule. The Port has also been identified as a recovery port to provide resiliency within the region in the event of a man-made or natural disaster near the consumer ports of Seattle and Tacoma (NW Seaport Alliance). It also serves as backup support for the Department of Defense.