Los Angeles City Council OKs financing deal for Alameda Corridor
The Los Angeles City Council approved a long-awaited federal financing agreement that will help ensure a vital transportation corridor doesn’t become a drain on the finances of the ports of Los Angeles and Long Beach.
The vote — 13 to 0 in favor, with two council members absent — allows the Alameda Corridor Transportation Authority to accept $83.7 million from the Federal Rail Administration to help fund operations of the Alameda Corridor, a 20-mile freight rail expressway linking the ports to transcontinental rail lines.
The Alameda Corridor ran into problems paying its bond debt during the global recession because of a sharp decline in cargo and the fees the freight traffic generated.
Gary DeLong, chairman of the transportation authority board and a Long Beach City Councilman, said the money would “provide substantial relief from the impact of the recession on future debt payments.”
Over the Alameda Corridor’s 10 years of operation, about 150,000 trains have moved more than 20 million cargo containers, most of them bound for the far reaches of the nation. It removed significant amounts of truck traffic from local roads and replaced a hodgepodge of meandering street-level train lines that had jammed roads.
Under the surety bond agreement approved Wednesday, the transportation authority will sell $83.7 million in bonds to the Federal Rail Administration and will use the money to retire bonds that carry a higher interest rate. The transaction is expected to greatly reduce the amount of money the transportation authority may have to seek from the ports.
The agreement awaits final approval by the Federal Railway Administration.
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