X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

BOSTON-Massachusetts Turnpike Authority officials unveiled the new finance plans for the Big Dig, the massive highway construction project in the heart of the city here. The plan is disclosed as recent cost estimates put the costs of the project at $14.475 billion–$400 million above last year’s projections.

It was assumed that additional toll hikes–beyond those already tentatively scheduled for this coming year–would be required to cover the costs of the overruns. But Rita Strazerri, spokesperson for the Turnpike Authority, tells GlobeSt.com that a portion of the project would be funded by selling real estate along the Massachusetts Turnpike.

According to the plan released by the Authority, the base cost of the project is $13.981 billion with a $494 million contingency fund that comes to the $14.475 current price tag. Last year’s cost estimate was $14.075 billion. The primary funding sources for the cost overruns will be a $175-million transportation infrastructure fund, which will be a restructuring of the fund for registration and motor vehicle licensing fees. An additional $150 million will be provided by the state bond cap and $75 million will come from the future sale of Big Dig headquarters at 185 Kneeland St. The Authority states the property’s appraised value is $100 million.

Unconfirmed reports say the state bond cap was made possible because $150 million in Federal highway funds that couldn’t be spent on the Big Dig were given to the statewide road and bridge project and exchanged for the $150 million in additional debt capacity. The Federal Government has mandated an $8.5 billion cap on its spending for the Big Dig but reportedly, Big Dig officials state that the Federal Highway Administration signed off on the exchange.

The financial plan also identified secondary funding sources, including an additional $117 million of potential revenue through development of real estate along the Turnpike. This money could potentially be used to offset future cost overruns.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt. NET LEASE Awards 2020Event

These awards honor the industry's most influential and knowledgeable real estate executives from the net lease sector.

Get More Information
 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.