Virginia I-495 HOT Lanes and Silver Line Extension

FIGURE 17: I-495 HOT LANES CONFIGURATION

Through a design-finance-build-operate-maintain (DFBOM) procurement, Interstate I-495 (the Capital Beltway) was expanded from eight to 12 lanes along a 14 mile stretch from the Springfield Interchange to north of the Dulles Toll Road.583 The project added two new HOT lanes in each direction and reconstructed the existing general purpose lanes. It also featured $260 million worth of infrastructure upgrades, including over 50 new bridges and overpasses, new carpool ramps, upgrades to 11 interchanges, and 80,000 square feet of sound walls.584 The project was completed in November 2012 at a cost of $2.07 billion, or $148 million per mile.

Several organizations were closely involved in the execution of this project, led by the Virginia Department of Transportation (VDOT). The agency is overseen by the Commonwealth Transportation Board (CTB), whose 17 members are appointed by the governor. VDOT also has separate specialized divisions including the Office of Public-Private Partnerships, which provides much of the procurement, management, and technical support for P3 projects, and a Mega Projects Office which

offers design and engineering support. FHWA’s Virginia Division Office, located in Richmond, works collaboratively with VDOT and assists with the development of projects, including environmental reviews, land acquisition, procurement, and construction. Capital Beltway Express, LLC (CBE), is a private consortium formed by Fluor and Transurban to design, finance, construct, and operate the I-495 HOT Lanes. The consortia is 90 percent owned by Transurban and 10 percent owned by Fluor.585

Chronic traffic congestion on the Capital Beltway led VDOT to consider ways to address travel demand. A 1997 Major Investment Study conducted by VDOT recommended the use of high occupancy vehicle (HOV) lanes and expanding I-495 by up to four lanes, though an eight lane expansion was considered and ruled out.586 Public hearings on the Draft EIS were held in 2002, but the estimated $2.6 billion in construction costs and potential displacement of nearly 350 homes led to significant pushback from local officials, the public, and communities in the corridor and prompted VDOT to modify the project.587

In 2002, under the authority of Virginia’s Public-Private Transportation Act of 1995, Fluor and Transurban submitted an unsolicited proposal to expand I-495 to 12 lanes. The proposal solved two of the main problems facing the highway project: funding and scope. It would be paid for and financed in part by tolls, which the consortium would be able to retain during the life of the DFBOM contract. By minimizing shoulders, limiting the scope of interchange improvements, and utilizing painted strips in lieu of physical lane barriers, reducing the expansion from eight to four new lanes, the proposal kept the expansion largely within the existing ROW and resulted in only seven displacements.588

After inviting a formal solicitation for competing proposals and receiving none, the CTB approved the proposal for further evaluation in 2003 and entered into an initial development agreement with Fluor-Transurban.589 The Record of Decision was signed in 2006 and further negotiations over project scope and details took place until 2007, when the partners officially signed the Comprehensive Agreement as Capital Beltway Express, LLC.590 The contract spans 85 years, including 5 years for construction and 80 years of operation. Construction began in July 2008 and the HOT lanes opened in November 2012, one month ahead of schedule.

FIGURE 18: SILVER LINE EXTENSION MAP

Source: MWAA

TABLE 17: SILVER LINE PHASES

*A single delivery method is not always used on an entire project.
** Projected costs for unfinished projects
*** Projected opening dates

The Silver Line is an extension of the Washington Metro’s heavy rail system intended to connect Washington, DC to the employment districts along the Dulles Toll Road, Dulles International Airport, and the Dulles Greenway. The project was split into two 12 mile phases: the first connecting the existing heavy rail network to Tysons and Reston, and the second phase extending the project to the airport and beyond. The rail yard and maintenance facility is being built on more than 90 acres of airport land. Phase 1 runs primarily along highway medians and includes both below ground and aerial segments. Four percent of the 12-mile, five station Phase 1 portion is tunneled, and 23 percent is elevated. Phase 2 contains no tunneled portions but 27 percent is elevated.

Several organizations are heavily involved in the execution of this project, which is led by the Metropolitan Washington Airports Authority (MWAA). MWAA was established in 1987, and is in responsible for the ownership and operation of Reagan Washington National and Dulles International Airports. The authority is governed by a 17-member board appointed by the mayor of Washington, D.C., the President of the United States, and governors of Maryland and Virginia. The authority is not funded with taxpayer dollars. Operations are funded by landing fees and rents/revenues from airport concessions, while capital improvements are paid for using bonds issued by MWAA, federal and state Airport Improvement Program funds, and Passenger Facility Charges. MWAA is managing the construction of the Silver Line.

The Washington Metropolitan Area Transit Authority (WMATA) is the primary rail and bus operator in the Washington region. It did not build the Silver Line but will own and operate it when completed. MWAA still has ownership and care of the facility as WMATA begins operational testing. Only after successful completion of testing, which has no set time, will the project be turned over to WMATA ownership. Passenger services commences several months thereafter.

The Virginia Department of Rail and Public Transportation (DRPT) is responsible for planning freight and passenger rail service. It is a separate entity from VDOT and is overseen by the CTB. DRPT supports capital improvements and operation of Virginia’s rail system through three major grant programs. DRPT served as project sponsor for the Silver Line before transferring control to MWAA. The FTA’s Region 3 office is located in Philadelphia, PA, and assists local and state transit officials with developing and managing federal grants. The Silver Line received a $900 million grant from the FTA.

Dulles Transit Partners, LLC. is a private consortium between Bechtel Infrastructure and Washington Group International (now URS) contracted to build the Silver Line’s Phase 1. Capital Rail Constructors, a joint venture of Clark Construction Group and Kiewit Infrastructure South is contracted to build Phase 2. Both contracts are structured as a DB procurement, as is the contract for the rail maintenance facility being built by Hensel Phelps Construction Company.

The Silver Line extension is notable for its unique delivery structure, as it is being delivered by an entity other than a transit agency and, in this case, an airport authority. DRPT was the project sponsor for the Silver Line from 2000 until 2008, when ownership and oversight was transferred to MWAA as part of a larger governance change and agreement that granted the Airports Authority responsibility over operating the Dulles Toll Road and building the Silver Line, with a portion of toll revenue being used to finance the project.591 DRPT retains an oversight role on the project and serves as a funding partner, while WMATA was the technical lead during the NEPA process, and will be the owner and operator of the line after construct ion.592

Phase 1 was completed six months after initially scheduled and $220 million over budget.593 A number of challenges contributed to the project’s delays, including a three-year dispute over the tunneling style to be used and MWAA ’s indication that DTP failed to meet construction criteria in sev en of 12 critical areas.594 Phase 2 has been delayed due to issues concerning compliance with state and federal stormwater management regulations enacted midway during the project’ s construction (instead of grandfathering the project under the previous rules); tunneling for cable work; construction challenges; malfunctioning equipment; flawed concrete; and a U.S. Department of Justice investigation into a subcontractor. Project officials have not yet calculated costs associated with delays and change orders. 595

Both projects had stalled until the project sponsors decided to use tolling to help secure long term debt to complete the funding packages. The repayment of the federal loan programs for the HOT Lanes and the private equity component will all come from future tolls, which amount to nearly three-quarters of the total project’s initial costs.596 Nearly half of the funding for both phases of the Silver Line is from revenue from the Dulles Toll Road. MWAA, Fairfax County, and Loudon County also utilized federal credit assistance to raise the necessary funds for construction.597 Fairfax and Loudon counties’ loans will be repaid using annual appropriations and special taxing districts around Silver Line stations.598 MWAA’s loan has been repaid early with other Airports Authority’s bonds.

TABLE 18: I-495 HOT LANES AND SILVER LINE FUNDING SOURCES

Source: FHWA Project Profiles, 2020; MWAA

While both the HOT Lanes and Silver Line were led by public agencies and private consortia with internal expertise for delivering large projects, there was more institutional capacity and knowledge to support the team delivering the HOT Lanes. This was most notable in the level of resources at VDOT versus DRPT and MWAA, as well as between FHWA and FTA.

Highway projects in general benefit from more public staff that are experienced at delivering large, complex projects. VDOT employs nearly 7,500 professional staff, with specialties ranging from engineering and procurement to planning and environmental review.599 Its separate divisions to support public-private partnerships and megaprojects provide additional sophisticated support and as a result of their sizeable team, VDOT is able to provide in-house expertise across all phases of project delivery. VDOT also has nine district offices across the state—including in northern Virginia—whose staff handle permitting and help coordinate with third parties and local stakeholders as needed.

By contrast, the DRPT employs just 65 staff and relies more heavily on consultants, particularly for engineering oversight. MWAA employs fewer than 20 in house staff in its rail division, primarily concentrated in leadership roles, and relies on contractors for construction management and design on the Silver Line.600 While consultants are useful for their specialized expertise, they are often risk-averse, which leads to project delays due to unnecessary back and forth discussions between staff, supervisors, and contractors over relatively minor decisions.

Similar differences in institutional capacity and support are apparent at the federal level . While both FTA and FHWA conduct programmatic and project-specific reviews for implementing agencies, FHWA is able to provide more depth and breadth than FTA. FHWA’s Virginia Office and VDOT are also located just a few blocks away from each other in downtown Richmond. As a result, VDOT staff work closely alongside the same FHWA division staff and their in-house engineers on a daily basis. While FTA staff is certainly capable, the Region 3 office is located in Philadelphia and grantees mostly interface with the FTA’s PMOCs who may be located in a different part of the country.601 Interviewees also felt that the geographic proximity of FHWA division offices allows VDOT staff more regular, in-person access to FHWA staff on short notice for issues that implicate the federal government, while transit staff may have to wait until the next time the PMOCs or FTA field staff are on site.

The staff capacity is important because although both projects were subject to similar environmental standards, the highway project process was much more routine and straightforward. The rules set forth under NEPA meant both projects had to complete an EIS, the highest class of environmental review. However, with a nearly $1 billion federal-aid highway program and over 500 projects subject to NEPA each year, VDOT has developed a routinized and structured process by which it handles highway projects, including the environmental review. Officials had straightforward answers on how the navigate the processes with an engineering-like methodology. VDOT’s P3 office conducts preliminary work and studies on various project configurations to help determine the class of environmental review necessary (EA versus EIS). These inputs and preliminary analyses are then handed over to the environmental staff at VDOT, who make a determination on whether to prepare an EA or EIS and take the lead on conducting the appropriate review.

On the other hand, transit projects are neither common nor routine. MWAA had never conducted a major capital investment off its property, so the Silver Line represented a new process that staff had to learn. Interviewees familiar with the process at MWAA suggested that the environmental review and planning process was complex and convoluted in large part because of fewer routine processes and experience in preparing and guiding projects through the various stages of project delivery, including the environmental review. FTA’s Region 3 office and DRPT provided additional assistance, but transit project themselves are much less common and their uniqueness brings huge challenges.

Lastly, the segments of both the HOT Lanes project and the Silver Line in highway medians had limited challenges with utility relocation and business disruptions. Unlike the HOT Lanes, however, the Silver Line had to contend with strong public sentiment about the value of transit. Interviewees felt that a significant amount of energy was spent to justify not only the value of the Silver Line investments, but also the existence of transit in the region. In one example, DRPT had to commission a statewide study of the economic impact of transit investment in order to garner legislative support for more investment, a process that would likely not be necessary for highway funding.602

Highway projects, of course, can still spark strong community reaction. This was the case with the originally proposed expansion of I-495. As a result of the needed land acquisition and the project’s location within a dense, fully-developed corridor, the project garnered significant public interest and received a higher than normal volume of comments and pushback on the draft EIS. The reduced scope helped facilitate a relatively smooth preparation of the final EIS.

The fact that the Silver Line runs within existing highway medians simplified the project and helped keep costs low compared to other transit projects. However, Phase 1 required more coordination with VDOT given its interfaces with the agency’s roadways, which required additional VDOT design reviews and approvals. Because most of the ROW for Phase 2 was owned by MWAA, it handled its own permitting and code compliance.