USDOT Closes First Loan Supporting TOD

“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,” USDOT Secretary Pete Buttigieg said May 1. “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.” (Screen Shot of the Mount Vernon Library Commons Project from a city of Mt. Vernon, Wash., video)

The U.S. Department of Transportation (USDOT) on May 1 reported that its Build America Bureau has approved the first transit-oriented development (TOD) TIFIA loan, which will support a Mt. Vernon, Wash., project located a short walk from the Amtrak-served Skagit Station.

The loan, for up to $26.8 million, will go toward the Mt. Vernon Library Commons Project. It 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, according to USDOT, which noted that it will also incorporate sidewalk and signalized crosswalk improvements in line with ADA compliance, offer low-carbon architecture and solar power generation, and encourage private investment in nearby mixed-use development.

Facility users will be able to walk to the Skagit Station, a multimodal transportation hub that is served by Skagit Transit, Whatcom Transportation Authority, Island Transit, and Greyhound, along with Amtrak. Also available from Skagit Station is service to Everett Station, where connections to Sound Transit (Sounder commuter rail and bus services), Everett Transit and Community Transit are provided.

The Mt. Vernon Library Commons Project, slated for completion this summer, is being financed through the Transportation Infrastructure Finance and Innovation Act’s (TIFIA) Rural Project Initiative for up to 49% of the project costs with an interest rate equal to half the Treasury rate. As a rural project, USDOT said it was able to provide additional financial support by waiving advisor fees. 

“TOD  is a new but fast-growing category within USDOT’s Build America Bureau,” USDOT reported. “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.”

USDOT’S Federal Highway Administration also awarded the city of Mount Vernon $12.5 million through the Charging and Fueling Infrastructure Discretionary Grant Program for Fiscal Year 2022-23 to install 78 EV charging ports in the Mt. Vernon Library Commons Project’s parking garage. The project design allows for another 200 charging ports in the future, USDOT reported, “creating what could be the nation’s largest regional EV charging hub.” Additionally, the project is receiving financial assistance through the Section 108 Loan Guarantee Program administered by the U.S. Department of Housing and Urban Development.

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

“The TIFIA loan product is the absolute best financing that a small rural city like ours can utilize,” said Jill Boudreau, Mayor Emerita, Project Administrator, Mount Vernon Library Commons. “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.”