The group developing Union Station as an expanded transit hub for RTD got a major boost Friday when the bond-ratings agency Fitch assigned an “A” rating to a key component of the project’s debt.
Board members of the Denver Union Station Project Authority broke out in cheers when their financial adviser Alexander Brown told them Fitch had just announced the medium investment-grade rating for a loan of up to $155 million from the U.S. Department of Transportation.
The development group is borrowing that amount under one loan program operated by the Transportation Department’s Federal Highway Administration, and a second subordinate loan of a similar amount from the department’s Federal Railroad Administration.
The project needed the investment-grade designation on the debt to move the federal loan package forward, and Brown said the favorable rating “was made possible by the strength of the revenue pledge made by RTD.”
Last year, the Regional Transportation District agreed to issue a sales-tax-revenue bond of about $168 million to back the loan. That backing originated with the voter-approved 2004 tax measure that created FasTracks.
Winning up to $310 million in federal loans has been a prerequisite for advancing the Union Station project, which is expected to cost $480 million.
The project’s board voted Friday to approve the loans, and officials said they hope a final closing on the deals can be signed Tuesday or Wednesday.
A redeveloped Union Station will be the hub of RTD’s FasTracks-enhanced transit system that will include the new West Corridor light-rail line to Lakewood and Golden, a commuter-rail line to Denver International Airport and most likely, train lines to Arvada/Wheat Ridge and south Westminster.
The West Corridor train line is under construction and is scheduled for completion in the first half of 2013. Late next month, RTD will break ground on the $1.2 billion East Corridor line to DIA.
Now, construction at Union Station is underway on an underground bus station that will link a new light-rail platform on the west side of the project with a commuter-rail terminal next to the station.
