San Luis Obispo will issue up to $8.3 million in lease revenue bonds to help pay for the long-awaited Los Osos Valley Road/Highway 101 interchange.
The San Luis Obispo City Council, acting as the San Luis Obispo Public Financing Authority, voted unanimously Tuesday to approve the financing strategy for the project.
The project, which will cost an estimated $33 million, will widen Los Osos Valley Road to four lanes between the Calle Joaquin intersection and South Higuera Street.
The area is notorious for its traffic backlogs.
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The city will use the parking structure at 842 Palm St. and two fire stations to secure the 30-year bonds.
The borrowed money will provide the final city funding needed for construction, said Wayne Padilla, the city’s finance director.
A plan to fix the bottleneck has been in the works since 2001. It has involved lengthy discussions with Caltrans, settling lawsuits filed by nearby residents and acquiring the land to make it all work.
A new two-lane bridge will be built south of the existing Highway 101 overcrossing. Westbound traffic will travel on the existing bridge, and eastbound traffic will be routed on the new bridge.
Other improvements, such as widened sidewalks and bike lanes, will also be included.
The interchange is expected to accommodate increased traffic for up to 20 years. Work is expected to begin in late October and be complete in 2016.
The city is paying for half of the overall $33 million project cost through the lease revenue bonds, impact fees and other assessments paid by businesses such as Costco, Home Depot and Target, which have opened stores in the immediate area.
Funding also came from a $16 million state grant.