Officials Celebrate Promised Loan for Alameda Corridor Project

The score of jubilant local officials did everything but break out the champagne as they gathered at a noisy railroad switching yard Tuesday to celebrate President Clinton’s promise of a $400-million federal loan for the pivotal Alameda Corridor project.

There were congratulations, thrilling projections about the anticipated huge economic boon, rhapsodizing over cooperation between often-competing jurisdictions and round after round of thanks to the president for making it all possible.

But there also were urgent pleas to keep pressure on Congress to approve funding for the loan--one of the few reminders in evidence Tuesday that the loan is not yet a done deal.

The president’s request that Congress appropriate $59 million needed to get the loan off the ground will get its first airing in House appropriations subcommittee hearings beginning today in Washington.

Advocates of the corridor project, a $1.8-billion, below-grade rail system to speed the flow of cargo between the ports of Long Beach and Los Angeles and Union Station downtown, know the obstacles they face in getting funds for the federal budget year that begins Oct. 1.

The Republican-controlled Congress, bent on finding ways to erase the federal budget deficit, is looking for cuts, not increased spending. And it seems unlikely that Senate Majority Leader Bob Dole, the expected GOP candidate in the November presidential election, would be interested in approving a Clinton program.

But backers are counting on the project’s several pluses to carry the day, including a unique financing program that calls for full payback within 30 years. Historically, the federal government has picked up at least half the cost of major highway, subway and other so-called “infrastructure” projects.

Almost three-fourths of the Alameda Corridor money will come from local sources, including revenue bonds, leaving the federal government a smaller share of the burden that is a loan instead of a grant.

Clinton administration officials said they expect the corridor financing plan to become a model for transportation projects nationwide, showing that big plans can go forward despite shrinking federal dollars.

“The Alameda Corridor project exemplifies the kind of teamwork that yields enormous results for its partners when they’ve all contributed to the effort,” Transportation Secretary Federico Pena said in announcing the president’s support.

Spearheading the funding mechanism drive was Brentwood-based Saybrook Capital partner and investment banker Jonathan Y. Thomas, appointed to the city Harbor Commission by Mayor Richard Riordan to help find ways to pay for the construction.

The federal loan will act as seed money to get the project off the ground and enable the Alameda Corridor Project Authority to sell $600 million in bonds and tap into other commitments, said Thomas, who spent the last nine months working out details with the White House and various federal agencies. Both the bonds and the federal loan will be repaid from wharfage fees and from user fees collected from the three railroads planning to use the corridor, Thomas said.

Times staff writer Richard Simon contributed to this story.

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The Alameda Corridor will run from the ports of Los Angeles and Long Beach to a major freight rail switching yard just south of the Santa Monica Freeway (20 miles), and NOT to Union Station downtown.

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