CHAPTER 6: FINANCIAL ANALYSIS 

Transbay Terminal / Caltrain Downtown Extension / Redevelopment Project EIS/EIR 6-1 

CHAPTER 6: FINANCIAL ANALYSIS 

This chapter presents the proposed financial plan for the Transbay Terminal/Caltrain Downtown 

Extension/Redevelopment Project. The analysis is not required for environmental review but is 

presented for informational purposes. A financial plan, or program, is an important element of 

the project approval process. For a project to receive regional funds in the subsequent phases of 

design and construction, it must be included in a financially constrained Regional Transportation 

Plan (RTP). Likewise, eligibility for state funds requires inclusion in the State Transportation 

Improvement Plan (STIP). If the project is to receive federal funds or is subject to federally 

required actions, such as review for its impact on air quality, it must also be included in the 

federally required Transportation Improvement Program (TIP). The 2003 Transportation 

Improvement Plan (TIP) was federally approved in February 2003. The proposed Project is 

included in the 2003 TIP for Preliminary Engineering and design.

6.1 PROJECT DESCRIPTION 

The proposed project has three major components: 

• A new, multi-modal Transbay Terminal on the site of the present Transbay Terminal; 

• Extension of Caltrain commuter rail service from its current San Francisco terminus at 

Fourth and Townsend Streets to a new underground terminus underneath the proposed new 

Transbay Terminal; and 

• Establishment of a Redevelopment Area Plan with related development projects, including 

transit-oriented development in the vicinity of the new multi-modal Transbay Terminal.

Other subordinate components of the project include a temporary bus terminal facility to be used 

during construction of the new Transbay Terminal, a new, permanent off-site bus storage/layover 

facility, reconstructed bus ramps leading to the new Transbay Terminal, and a redesigned 

Caltrain storage yard. Figure 1.2-1 (in Chapter 1) shows the project location. 

6.2 ESTIMATED CAPITAL COSTS 

The Draft EIS/DEIR reported that a rebuilt Transbay Terminal and the underground Caltrain 

Extension would cost between $1.898 and $2.141 billion in 2003 dollars. Since the publication 

of the Draft EIS/DEIR, the Transbay Joint Powers Authority has selected a Locally Preferred 

Alternative (LPA) consisting of the West Ramp option for the Transbay Terminal and tunnel 

construction along the Second-to-Main alignment for the Caltrain Downtown Extension. 

Subsequently, cost estimates have been refined and a value engineering exercise has been 

undertaken for this LPA. The resulting cost estimate is $1.754 billion in 2003 dollars, 

approximately $143.7 million less than the original cost estimate for this alternative. 
CHAPTER 6: FINANCIAL ANALYSIS 

6-2 Transbay Terminal / Caltrain Downtown Extension / Redevelopment Project EIS/EIR 

Tables 6.2-1 and 6.2-2 provide more details of the capital costs of the proposed Project’s 

components. Cost estimates include net land acquisition costs and all agency costs for project 

oversight as well as general project contingency and reserve. The costs exclude any potential 

savings from value engineering. For more detail on capital costs of the project components, see 

Chapter 2. 

Table 6.2-1: Transbay Terminal Capital Cost Estimate 

West Ramp Alternative (LPA) 

(Millions of Dollars – Year of Expenditure)

Activity Cost Estimate

Operations Analysis, Preliminary Engineering, Geotechnical Engineering), 

Program Review/Value Engineering, Final Design & Permitting, Owner Costs $107.87 

Acquire Property, Design, Construct Temporary Terminals 

(Transit and Greyhound) $28.29 

Acquire Property & Demolish Buildings to Build Terminal $36.54

Demolish Existing Terminal & Ramps, Construct New Terminal & Ramps $909.22 

Construct Permanent Off Site Bus Storage Facility $24.45 

TOTAL COST ESTIMATE $1,106.37 

Notes: 

• Costs escalated to year of anticipated expenditure between 2004 and 2011. 

• Costs are for West Ramp Alternative 

• Other qualifications and assumptions apply, including coordination with Caltrans during the 

retrofit of the Western Approach and bus ramp retrofit projects. 

• Total assumes high end of 2001 real estate estimate escalated to year of expenditure. 

• Construction costs include a 25% construction contingency, 8% for construction management, 

and 10% project reserve. Owner costs are factored into each category. 

Source: MTC, SMWM, Oppenheim/Lewis, Sedway Group, Parsons, 2003

As the relative value of money changes over time due to inflation and other factors, the financial 

plan has been formed to address costs and revenues in Year of Expenditure (YOE) dollars. 

Project cost estimates are originally prepared in current-year dollar amounts (such as 2003 

dollars), and then spread over the construction schedule. In the financial analysis, these costs 

are escalated by an assumed inflation rate to calculate what the future project costs are likely to 

be in the year that the construction activities will occur. The resulting costs are thus expressed 

in Year of Expenditure dollars. 

Soft costs assumed in the Final EIS/EIR are now consistent between the line items and reflect the 

following breakdown: 25 percent construction cost contingency; 10 percent project reserve; and 

a 25 percent contingency that includes 10 percent for design costs, eight percent for construction 

management, and seven percent for owner costs. 
CHAPTER 6: FINANCIAL ANALYSIS 

Transbay Terminal / Caltrain Downtown Extension / Redevelopment Project EIS/EIR 6-3 

Table 6.2-2: Capital Cost Estimate for Caltrain Downtown Extension 

Second-to-Main Street Tunneling Option – Locally Preferred Alternative 

(Millions of Dollars – Year of Expenditure)

Activity Cost Estimate 

Operations Analysis, Preliminary Engineering, Geotechnical Engineering, 

Program Review/ Value Engineering, Final Design & Permitting, Owner 

Costs 

 $76.83 

Acquire Property & Demolish Buildings along Extension 

Acquisition/Relocation for Train Subway $82.85 

 Demolition $1.24 

Resale Proceeds ($31.12) 

Subtotal $52.97 

Design and Relocate Utility Lines along Extension $52.90 

Construct Surface Rail & Improvements at Train Yard $13.37 

Construct Cut-and-Cover and Retained-Cut – Caltrain Extension $427.13 

Reconstruct Streets $7.09 

Construct Train Tunnel $287.70 

Construct Track & Systems Facilities $58.54 

TOTAL COST ESTIMATE – Caltrain Downtown Extension $976.53 

Notes: 

• Costs escalated to year of anticipated expenditure between 2004 and 2011. 

• Costs are for Second-to-Main Tunneling Alternative, the Locally Preferred Alternative. 

• Total assumes high end of 2001 real estate estimate escalated to year of expenditure. 

• Construction costs include a 25% construction contingency, 8% for construction management, and 10% 

project reserve. Owner costs are factored into each category. 

• The optional underground pedestrian connection from the train mezzanine to The Embarcadero Muni 

Metro/BART Station is estimated to cost $45.3 million. 

• An additional $235 million could need to be added to the Project costs for purchase of dual mode 

locomotives if the Caltrain corridor is not electrified. 

Source: Parsons, 2003

6.3 ESTIMATED OPERATING COSTS AND OPERATING REVENUES 

6.3.1 OPERATING AND MAINTENANCE COSTS

Anticipated ongoing operating and maintenance costs are discussed separately below for the 

Transbay Terminal and Caltrain Extension components. Labor and equipment would be the 

main costs for ongoing operation of the Caltrain extension. Moving the terminal from Fourth 

and Townsend to the Transbay Terminal, a distance of 1.3 miles, would have a modest effect on 

the total annual operating costs of Caltrain service. That cost, assuming 132 daily trains, is 
CHAPTER 6: FINANCIAL ANALYSIS 

6-4 Transbay Terminal / Caltrain Downtown Extension / Redevelopment Project EIS/EIR 

estimated at roughly $7.5 million per year in constant 2003 dollars. The necessary rolling stock 

is assumed to be in operation at the time the Caltrain Extension begins operation. 

The new terminal building would feature a number of design features to reduce maintenance 

requirements and operating costs, including an open design to optimize natural ventilation by 

prevailing winds and maximize natural light, and a system to collect rainwater for maintenance 

and irrigation. Operating costs for the new facility are estimated to be about $17.8 million per 

year in constant 2003 dollars. 

6.3.2 OPERATING REVENUES

With respect to Caltrain operations, the projected $7.5 million per year increase in train operating 

costs due to the additional length of operations on the extension into the Transbay Terminal is 

expected to be funded by fare revenues from increased Caltrain ridership. With respect to the 

Transbay Terminal operations, long- term, ongoing operating revenues are anticipated from 

commercial leases in the Transbay Terminal. MTC Resolution No. 3434 includes a commitment 

of $62 million in bridge toll funds provided by BATA to be used as operating assistance for this 

new Transbay Terminal over a 25-year period. The Transbay Terminal is expected to have a 

positive cash flow on the order of $4 to $5 million per year in constant 2003 dollars. The project 

would not divert any operating funds from existing bus services. Table 6.3-1 shows a conceptual 

operating plan for 10 years of revenue service beginning in 2010. 

6.4 PROJECT’S INCLUSION IN REGIONAL TRANSPORTATION PLAN 

The Transbay Terminal/Caltrain Downtown Extension/Redevelopment Project is included as one 

of the top funding priorities in the financially constrained portion (called “Track 1”) of MTC 

Resolution 3434.1

 MTC Resolution 3434 is the transit expansion element of the 2001 Regional 

Transportation Plan (RTP). The amended 2001 RTP was adopted by MTC on March 15, 2002. 

6.5 ADDITIONAL FACTORS CONTRIBUTING TO FUNDING FEASIBILITY 

The funding plan for the Transbay Terminal/Downtown Caltrain Extension/Redevelopment 

Project, presented in Section 6.6, is based on the application submitted by the San Francisco 

County Transportation Authority to MTC for inclusion of the Project in Resolution 3434 and the 

RTP. 

 

1

 The Project is identified as the “Caltrain Downtown Extension/Rebuilt Transbay Terminal” in Resolution 3434 

and the RTP. 
CHAPTER 6: F

Transbay Terminal / Caltrain Downtown Extension / Redevelopment Project EIS/EIR 6-5 

Table 6.3-1: Transbay Terminal and Caltrain Downtown Extension Conceptual Operating P

Cost and Revenue Estimates 

(Thousands of 2003 Dollars)

Year 2010 2011 2012 2013 2014 2015 2016 2017 2Caltrain Downtown ExtensionOperating Expenses [1] $7,929 $7,929 $7,929 $7,929 $7,929 $7,929 $7,929 $7,929 $Operating Revenues [2] $9,142 $9,593 $9,680 $9,767 $9,855 $9,943 $10,033 $10,123 $1Net Loss/ Surplus [3] $1,213 $1,664 $1,751 $1,838 $1,926 $2,014 $2,104 $2,194 $Transbay TerminalOperating Expense [4] $17,849 $17,849 $17,849 $17,849 $17,849 $17,849 $17,849 $17,849 $1Operating Revenues [5] $22,388 $22,388 $22,388 $22,388 $22,388 $23,241 $23,241 $23,241 $2Net Loss/ Surplus $4,539 $4,539 $4,539 $4,539 $4,539 $5,392 $5,392 $5,392 $Notes: [1] From Manuel Padron Final O&M Cost Results Report for Caltrain Downtown Extension Project, 11/8/96, escalated to 2003 and adjusted for number of 

[2] Assumes average of $2.76 per ticket for 13,500 new riders attributable to the extension in 2020, with an annualization factor of 268. 

[3] Use of excess revenues to be determined by the JPB. [4] Based on Jones, Lang LaSalle Report (February 13, 2001) and July 2002 and September 2003 revisions, and Nancy Whelan Associates, September 200[5] Based on Jones, Lang LaSalle Report (February 13, 2001) and July 2002 and September 2003 revisions, and Nancy Whelan Associates, September 200

million in annual BATA bridge toll operating support per MTC Resolution 3434 (start date of 2010). 

Source: Parsons Transportation Group, Nancy Whelan Consulting. September 2003.
CHAPTER 6: FINANCIAL ANALYSIS 

6-6 Transbay Terminal / Caltrain Downtown Extension / Redevelopment Project EIS/EIR 

MTC’s process for selecting projects for inclusion in Resolution 3434 portion of the RTP 

included consideration by MTC of a number of criteria and factors intended to ensure the ability 

to deliver and to maximize performance of the region’s investments in transit expansion. The 

Transbay Terminal/Caltrain Downtown Extension/Redevelopment Project measured well against 

all criteria; hence MTC’s decision to include it among the top priorities in the region. The 

following describe some of those factors and are included to further illustrate the value and 

importance of the Project to the regional transportation network. 

Subsequent to MTC’s approval of Resolution 3434 and to preparation of the Draft EIS/DEIR, the 

project costs and revenues have been refined. The financial plan presented in Section 6.6 is 

consistent with Resolution 3434. 

6.5.1 SUPPORTIVE LAND USE POLICIES

The Caltrain Downtown extension to the new Transbay Terminal would connect the South Bay 

with the region’s largest and densest concentration of employment – San Francisco’s financial 

district. The proposed extension is consistent with the findings of MTC's Blueprint evaluation, 

which found that rail extensions capture significantly more ridership in the densely settled urban 

core of the region. 

Even though much of downtown San Francisco is substantially built out, there are opportunities 

for additional development that would further increase Caltrain and bus ridership growth, 

thereby improving the project’s cost effectiveness. Within the limits of the Full Build Alternative 

analyzed in this Final EIS/EIR, the Redevelopment Agency’s Draft Design for Development Plan 

(August 2003)for the Project Area includes over 5.6 million square feet (sq. ft.) of 

residential/office/retail/hotel development, including approximately 4.1 million sq. ft. of 

residential development (nearly 3,400 residential units including approximately 1,200 affordable 

units), nearly 1 million sq. ft. of office development, 475,000 sq. ft. of hotel development, and 

neighborhood-serving retail development. 

The redevelopment of the parcels being transferred from the State to the Transbay Joint Power 

Authority and the Redevelopment Agency would contribute funds directly to the Transbay 

Terminal / Caltrain Downtown Extension construction projects. This includes more than 5.0 

million square feet (sq. ft.) of residential/office/retail/hotel development, including approximately 

2,900 residential units (including more than 900 affordable units), nearly 1 million sq. ft. of 

office development, 475,000 sq. ft. of hotel development, and neighborhood-serving retail 

development, according to the Redevelopment Agency’s Draft Design for Development Plan. 

Not only would transit-oriented development around the Transbay Terminal provide needed 

funding (through tax-increments), it would also increase the density of employment and 

residential units in the South of Market area. This would improve transit’s ability to attract a 

larger mode share of persons commuting to jobs in the region. In addition, an unprecedented 

amount of development is projected in the southeastern part of San Francisco over the next 20 
CHAPTER 6: FINANCIAL ANALYSIS 

Transbay Terminal / Caltrain Downtown Extension / Redevelopment Project EIS/EIR 6-7 

years. The Transbay Terminal/Caltrain Downtown Extension/Redevelopment Project would 

provide another attractive transportation option to new residents and workers in that area. 

San Francisco’s General Plan and Planning Code have for several decades included policies and 

requirements to ensure transit-oriented, pedestrian-oriented, and mixed-use development (e.g. 

Transit First policy, transit impact development fees applied to the downtown commercial land 

uses, parking restrictions and disincentives, and other measures). These existing policies would 

contribute to the long-term success of the Terminal/Extension Project. 

6.5.2 SYSTEM CONNECTIVITY

Caltrain now terminates more than a mile away from the major employment concentrations of 

San Francisco’s downtown office district, and far from the BART and Muni Metro stations on 

Market Street and from the existing Transbay Terminal. By extending the Caltrain terminus to 

the Transbay Terminal, the Project would act as a critical gap closure, improving inter-county 

travel via Caltrain, BART, Muni Metro, Golden Gate Transit, SamTrans, and AC Transit. One 

centrally located terminal would allow intermodal connections for direct access to seven Bay 

Area counties from one terminal. In addition, the extension is being designed to accommodate a 

possible future connection to the East Bay and the Capital Corridor service, which extends from 

San Jose to Sacramento and points north. The Transbay Terminal/Caltrain Downtown 

Extension/Redevelopment Project has considerable potential to improve interregional travel by 

allowing centrally located connections to Greyhound, the Amtrak bus bridge to the East Bay, and 

a future statewide high-speed rail system. 

Caltrain service levels have increased over the recent years to 80 trains per day. The 

Transportation Congestion Relief Program (TCRP) funding has been allocated to implement 

express service (designated “baby bullet” service). Improvements recommended in Caltrain’s 

Rapid Rail Plan, including the construction of passing tracks, are being implemented at a rapid 

pace. Furthermore, the programmed electrification of the Caltrain would further increase service 

improvement options. 

6.5.3 TRANSIT SYSTEM ACCESS

The Caltrain Transbay Terminal/Caltrain Downtown Extension/Redevelopment Project would 

offer exceptional multi-modal system access, more than any other rail extension project in the 

region. Many of the essential, complementary elements contributing to a high level of system 

access are already in place. 

By terminating at the Transbay Terminal, Caltrain would facilitate seamless transfers among 

various local, intercity, and interregional bus and rail transit services, including AC Transit, 

Golden Gate Transit, Muni, Greyhound, Amtrak, SamTrans and future high-speed rail. The 

extension would be designed to allow additional transit, including rail, extensions to the East Bay 
CHAPTER 6: FINANCIAL ANALYSIS 

6-8 Transbay Terminal / Caltrain Downtown Extension / Redevelopment Project EIS/EIR 

and Capital Corridor service. A new Transbay Terminal would provide pedestrian access to 

BART and Muni Metro on Market Street. 

Under the Project, the Caltrain commuter rail terminus would be located in San Francisco’s 

downtown office district, which has the highest volume of pedestrian traffic in the region. The 

area is characterized by high density, mixed land uses and a pedestrian-friendly urban 

environment featuring wide sidewalks, abundant ground floor retail, and narrow streets, among 

other features. San Francisco also has the highest volume of bicycle traffic in the region. 

Official bicycle routes (shared roadway) adjacent to the terminal include Second and Howard 

Streets. Nearby Market Street is an integral component of the city’s bicycle network. Folsom 

Street, one block south of the terminal, has a bike lane. An attended bike station would operate 

at the Caltrain terminus station. Caltrain’s handling of bicycles onboard trains is considered one 

of the best programs in the U.S. Caltrain now accommodates more than 2,000 bikes per day, a 

number that is growing rapidly. 

The Transbay Terminal/Caltrain Downtown Extension/Redevelopment Project would also offer 

travel time benefits for commuters along the entire Caltrain Corridor, including residents of 

San Francisco who would be offered five Caltrain station stops within the city. For example, the 

extension to the Transbay Terminal would reduce the travel time from the southern portions of 

San Francisco (e.g., Visitation Valley and Bayview), with the highest concentration of lowincome population in San Francisco, to the downtown. In addition, the Transbay Terminal’s 

centralized connections to the South Bay (via Caltrain and SamTrans), and East Bay (via AC 

Transit) would help to improve mobility for many low-income populations throughout the 

Region. 

6.6 PROPOSED FUNDING BY SOURCE 

Table 6.6-1 presents a funding plan for the LPA that was adopted by the TJPA Board and 

described in Chapter 2). These funding options are based on the funding plan developed jointly 

by the City and County of San Francisco, the San Francisco County Transportation Authority, 

the JPB, and MTC as part of MTC Resolution 3434. The financial plan in this Final EIS/EIR is 

based on financial projections and governmental actions that are not finalized. 

As noted in Section 6.2, the original capital cost estimate for the West Ramp, Second-to-Main, 

tunnel construction option has been refined based on value engineering. The resulting cost 

estimate is $1.754 billion in 2003 dollars, approximately $143.7 million less than the original 

cost estimate for this alternative. 
CHAPTER 6: FINANCIAL ANALYSIS 

Transbay Terminal / Caltrain Downtown Extension / Redevelopment Project EIS/EIR 6-9 

Table 6.6-1: Project Estimated Capital Costs and Funding Sources (Millions of YOE Dollars)

Transbay Terminal West Ramp 

Caltrain Extension Alternative 

Second-to-Main 

Tunnel Option 

Capital Costs and TIFIA Debt Service 

Total Capital $2,082.9 

Debt Service $1,857.2 

Total Cost $3,940.1 

Funding Source

Local/State 

Regional Measure 1 $53.0 

RTIP [1] $23.0 

San Mateo Sales Tax [2] $27.0 

San Francisco Sales Tax Reauthorization [3] $295.0 

AB1171 [4] $150.0 

Land Sales [5] $287.9 

Tax Increment [6] $534.2 

Net Operating Revenues [7] $140.2 

Bridge Toll Increase (SB 916) [8] $150.0 

High Speed Rail Bonds [9] $475.0 

Other [10] $182.5

PFC [11] $873.0 

Leveraged Lease Transaction [12] $50.2 

Federal 

TIFIA Loan $689.7 

Section 1601 [13] $9.4 

Total Funds $3,940.1 

Notes: 

[1] Per MTC’s RTP, which assumes $23 million in RTIP (Regional Transportation Improvement Program), STP (Surface Transportation

Program), and CMAQ (Congestion Mitigation and Air Quality Improvement Program) funds. 

[2] San Mateo County contribution (per MTC’s RTP). 

[3] San Francisco County contribution per Expenditure Plan for the Reauthorization of the Local Sales Tax for Transportation, 

approved June 17, 2003, escalated to YOE $s. Approved by voters November 2003. 

[4] Per MTC’s RTP. New Source of discretionary funds to MTC, pursuant to State law passed in October 2001 to complete the seismic 

retrofit of Bay Area bridges and related projects, consistent with Regional Measure 1. 

[5] Per valuation by CB Richard Ellis for San Francisco Redevelopment Agency, August 2003, escalated to year of expenditure.

[6] Tax Increment amounts from Seifel Consulting, August 8, 2003 for San Francisco Redevelopment Agency.

[7] Per Jones, Lang LaSalle and Nancy Whelan Consulting, September 2003. Includes $3 million in annual BATA bridge toll operating 

support per MTC Resolution 3434 and SB 916 (proposed).

[8] Regional Measure 2, which includes $150 million for the Project, was passed by the voters in Bay Area counties on March 2, 2004. 

[9] Per SB 1856, funding for the Caltrain Downtown Extension may be provided as a part of the High Speed Rail bond initiative. The

bond may be approved by the voters in November 2004. 

[10] Other includes potential funding from the following sources: Proposition 42, federal earmarks and additional local sales tax. 

[11] A Passenger Facility Charge (PFC) is assumed for Caltrain, AC Transit and High Speed Rail passengers. The PCF would be $0.75 

for Caltrain passengers, $0.25 for AC Transit passengers and $3 for High Speed Rail passengers. 

[12] The Terminal Facility's value is assumed to be $1.003 or $1.163 billion and the net benefit rate to be 5%. Leveraged lease 

transactions are encouraged by the FTA as innovative financing mechanism. 

[13] Per MTC’s RTP, which assumes $9.37 million in Section 1601 design grant. 

Sources: San Francisco County Transportation Authority, Seifel Consulting, Jones, Lang LaSalle, Openheim/Lewis, Peninsula Corridor 

Joint Powers Board, Sedway Group, Nancy Whelan Consulting, Parsons Transportation Group, 2001, 2002, 2003, and 2004. 
CHAPTER 6: FINANCIAL ANALYSIS 

6-10 Transbay Terminal / Caltrain Downtown Extension / Redevelopment Project EIS/EIR 

As the relative value of money changes over time due to inflation and other factors, the financial 

plan has been formed to address costs and revenues in Year of Expenditure (YOE) dollars. 

Project cost estimates are originally prepared in current-year dollar amounts (such as 2003 

dollars), and then spread over the construction schedule. In the financial analysis, these costs 

are escalated by an assumed inflation rate to calculate what the future project costs are likely to 

be in the year that the construction activities will occur. The resulting Year of Expenditure cost 

for this alternative is $2.083 billion (YOE). 

Table 6.6-1 identifies revenue sources to fund the expected financing cost of the project. The 

other funding options have also been developed using Resolution 3434 funding plan as the point 

of departure, with adjustments as necessary within the framework of project eligibility and 

assumed overall availability of the different funding sources. 

While additional consideration could be given to the relative contribution of various funding 

sources to the project, to avoid speculation regarding the funding sources to be used and the 

viability of the financially constrained plan, the variations on the funding plan shown in 

Table 6.6-1 are based on existing funding sources. There are, however, prospects for additional 

funding from new sources, as discussed in Section 6.6.3 below. Various funding sources are 

discussed in the following sections. 

6.6.1 FEDERAL FUNDS 

The Transbay Terminal/Caltrain Downtown Extension/Redevelopment Project received an 

earmark of $9.375 million under Section 1601 of the Transportation Equity Act for the 21st 

Century (TEA-21). MTC has included the $9.375 million earmark in the 2002 Transportation 

Improvement Program (TIP). Consistent with MTC Resolution 3434, the funding plan does not 

include any “new starts” funding (see Table 6.2-1), and it assumes a relatively small contribution 

of local discretionary RTIP/STP/CMAQ (Regional Transportation Improvement Program/ 

Surface Transportation Program/Congestion Mitigation and Air Quality Improvement Program) 

funds. 

The funding plan assumes receipt of a loan from the Transportation Finance and Innovation Act 

(TIFIA), which provides low interest, subordinated government loans and loan guarantees. All 

improvements to the Transbay Terminal/Extension project could be classified as Transportation 

Improvements under Title 23 and are therefore eligible for a subordinated loan from the federal 

government as a part of USDOT's TIFIA program, which was authorized in TEA-21. This 

program may provide various forms of credit support for large transportation projects for up to 

one-third of a project's total cost. A direct subordinated loan under this program will be very 

important in the financing plan for the Transbay Terminal/Caltrain Downtown Extension Project 

in providing maximum leverage of scarce project revenue dollars. 
CHAPTER 6: FINANCIAL ANALYSIS 

Transbay Terminal / Caltrain Downtown Extension / Redevelopment Project EIS/EIR 6-11 

Revenues that could be pledged to such a loan include: 

• Toll funds, 

• Lease income on retail space within the terminal, 

• Lease of properties transferred to the Transbay Joint Powers Authority, 

• Tax Increment Revenues on project areas created by the San Francisco Redevelopment 

Agency, and 

• Passenger facility fees. 

6.6.2 STATE FUNDS

In October 2001, Governor Davis directed the State Transportation Department (Caltrans) to 

initiate the administrative transfer of state-owned land parcels in San Francisco. This process is 

nearing completion. The land, worth approximately $288 million to the project, will be 

transferred to the Transbay Joint Powers Authority and to the City and/or the San Francisco 

Redevelopment Agency. The entire assessed fair market value at the time the property is 

transferred from Caltrans will be applied to the construction of the proposed Transbay 

Terminal/Downtown Extension. 

6.6.3 REGIONAL AND LOCAL FUNDS

In addition to the proceeds from the sale of the land, the project is projected to receive 

$53 million in Regional Measure 1 funds, and tax increment revenues, passenger facility fees, 

surplus operating revenues (including BATA bridge toll revenues), and other revenues, for a total 

of about $3.2 billion in local and state funding. 

High revenue potential from the property tax increments of redevelopment in the vicinity of the 

Transbay Terminal is possible because of intensity of land uses in a city such as San Francisco 

and the prime location of the terminal. Commercial leases in the Terminal are also assumed to 

generate substantial revenues, given that retail space is included in the current conceptual designs 

for the terminal, that this space is included in the estimated capital costs, and that the retail space 

is anticipated to provide services to a substantial number of transit patrons and other downtown 

workers. 

MTC Resolution 3434 includes $150 million in AB 1171 funds for the Transbay 

Terminal/Caltrain Downtown Extension/Redevelopment Project. This source results from the 

adoption of AB 1171 by the California Legislature for a plan to fund the costs of seismic retrofit 

of Bay Area toll bridges. The project is eligible for these funds, which are discretionary to MTC, 

under a provision that makes the money available to projects consistent with the purposes of the 

voter-approved Regional Measure 1 program, which includes congestion relief in the corridors 

served by the proposed project, particularly the Transbay corridor. 
CHAPTER 6: FINANCIAL ANALYSIS 

6-12 Transbay Terminal / Caltrain Downtown Extension / Redevelopment Project EIS/EIR 

The project enjoys solid local support in San Francisco as evidenced by the passage of 

Proposition H in 1999 by a 69.1 percent of the voters. Proposition H makes construction of the 

Caltrain Extension Project the official policy of the City and County of San Francisco. Although 

not necessary to establish a strong local funding share for the project, the regional nature of the 

project would warrant the allocation of regional funds to help defray construction costs. The 

City and County of San Francisco and the San Francisco County Transportation Authority have 

included $270 million in 2003 dollars for the project in the New Transportation Expenditure 

Plan for San Francisco adopted on July 22, 2003 and approved by the voters in November 2003. 

The passage of Proposition K, the San Francisco sales tax reauthorization, in November resulted 

in the elimination of Interregional Transportation Improvement Program (ITIP) funds from the 

financial plan. As stated in MTC’s Resolution 3434, Attachment D, “The ITIP commitment to 

the project will be reduced by $59 million if a rollover of San Francisco’s sales tax is 

approved.” 

A terminal use fee or passenger facility charge (PFC) is also assumed to be applied to all 

passengers using the Transbay Terminal. A fee of $0.75 and $0.25 would be applied to Caltrain 

and AC Transit riders using the terminal, respectively. A PFC of $2.00 would be applied to highspeed rail passengers. This fee is estimated to generate revenues of about $2.5 billion over 35

years, assuming that the fees are escalated to keep pace with inflation. 

The financial plan assumes that the California High Speed Rail Authority will include funding 

for the Transbay Terminal and Caltrain Downtown Extension project in its upcoming bond 

measure. While the actual commitment has yet to be determined, this financial plan assumes a 

contribution of $475 million from the $9.95 billion bond measure planned for the November 

2004 ballot. 

Options to reduce project costs, e.g., application of design-build, will be pursued, as will 

innovative financing mechanisms such as a leveraged lease transaction. Leveraged lease 

transactions are encouraged by the FTA as an innovative financing mechanism. For the West 

Ramp Alternative options, the value of a leveraged lease transaction would be about $50 million. 

Should the above funding sources prove inadequate for financing the project, additional funding 

sources will be pursued. At the state level, these additional sources could include new 

transportation infrastructure funding at the State levels and additional State sales tax revenues. 

Legislative approval would be required for these additional sources. Given the current status of 

the State budget, Prop. 42 revenues to this project may not materialize. Accordingly, the revised 

project funding plan does not rely on Prop. 42 revenues. 

At the federal level, multimodal facility funding under the reauthorization of TEA-21 could be 

pursued as well as potential federal high-speed rail funding and earmarks. Multiple high-speed 

rail bills are currently pending before Congress.