EHLERS TEAM LEAD: James Mann, CIPMA
TIME FRAME: 2018-Present

Transportation Infrastructure Financing

CASE STUDY: Aerotropolis Regional Transportation Authority (ARTA)

The Goal

In July 2018, Aerotropolis Regional Transportation Authority (ARTA) engaged Ehlers to help determine how it could finance a series of roads in an area just south of Denver International Airport. Presently that area primarily consists of the Aurora Highlands housing development, which ARTA members believe will spur development and create jobs in the area.

ARTA is made up of three voting member jurisdictions: Adams County, the City of Aurora, and the Aerotropolis Area Coordinating Metropolitan District. The proposed road network includes interchanges at E-470 and I-70 and the extension and widening of Powhaton Road from I-70 to the Denver International Airport, as well as other improvements over a 15-year period.

The Solution

ARTA engaged Ehlers for debt issuance & management services. Ehlers began by evaluating an unsolicited financing proposal from an entity related to the Aurora Highlands developer. Initial investor proposals came in at 9.00% total interest cost. We collaborated with ARTA Board of Directors and ultimately decided that accepting the proposal was not in their best interests and they should instead pursue a public market sale providing maximum benefit to the community at the lowest possible cost. At the Board’s direction, Ehlers issued a request for proposal for underwriting services, recommended finalists and conducted interviews. The Board selected Citigroup as its underwriter. Ehlers worked with ARTA, Citigroup, Sherman & Howard and Greenberg Traurig to negotiate a Special Revenue Bond transaction which resulted in a true interest cost of 4.99%.

The Results

ARTA announced the sale of approximately $19.3 million in Special Revenue Bonds in June 2019.  The proceeds will fund the planning, engineering and initial construction costs of a $200 million transportation improvement initiative to create regional connectivity and stimulate economic development. Ehlers partnership with ARTA will continue through several anticipated issuances of special revenue and limited general obligation debt including financing plans and structure, development and tax revenue projections and negotiations.

ARTA may issue up to $15 million in additional bonds later this year.