Selmon Expressway bond issue offers a glimpse of what’s ahead for work from home trends

Traffic on the Lee Roy Selmon Expressway fell dramatically in the past five months, as more people worked from home during the Covid-19 pandemic.

Total transactions for the 15-mile, limited-access toll road have been down 34 percent from March through July of this year, compared to the same time period a year ago, according to an investor presentation for two bond offerings.

The bond documents provide a crystal ball of sorts for gauging when workers might be expected to return to their offices in significant numbers.

The Selmon, which connects Gandy Boulevard with Interstate 75 and Brandon, provides access directly to downtown Tampa and the city’s central business district. Traffic demand is directly correlated to the employment picture in the Tampa-St. Petersburg-Clearwater metro area, bond documents said.

Starting in March, there was a steep decline in traffic as schools closed and businesses went remote, in advance of the safer-at-home orders from Hillsborough and Pinellas counties and the state. The largest loss of traffic occurred in the middle of April, with recovery occurring before the state’s Phase 1 and Phase 2 re-openings.

Lee Roy Selmon Expressway transactions (Source: Tampa Hillsborough Expressway Authority)

“It is reasonable to anticipate that the current level of traffic is the new normal until re-opening continues, as evident by the plateauing traffic in the month of July 2020,” the bond document said.

Recovery of both employment and changes in work from home will be a function of the timing of the relief from the pandemic, according to the bond documents, which outlined three scenarios for recovery — short duration, mid-duration and long duration.

Based on mid-duration recovery scenario, “Employment is estimated to achieve February 2020 levels by the fourth quarter of 2023. While employment may achieve February 2020 levels by the stated time frame, it is estimated that non-work from employment, i.e. commuter employment will not achieve February 2020 levels in the same time frame. That delay is approximately one quarter,” the bond document said.

The Tampa-Hillsborough Expressway Authority plans to issue about $222 million in two series of bonds in a deal that will price this week and close around Sept. 10.

Bonds are used by corporations, government entities and others to finance projects and operations. They are a type of financial instrument that represent a loan made by an investor — often big institutional investors such as pension funds or endowments — to the borrower. They are typically sold in large increments, often $1,000 or more.

The Series A bonds, totaling about $20.16 million, will finance capital improvements to the expressway system, while the larger $202.24 million Series B bonds will be used to refinance existing debt, according to Moody’s Investors Service. Moody’s assigned an A2 investment grade rating to the bonds with a stable outlook.

Some of the proceeds from the bonds will be used for the expressway authority’s 10-year work program, a $1 billion investment. Some projects will improve mobility in downtown Tampa by redesigning ramps and creating a more connected grid system, while others will improve walkability along the Selmon Greenway, the authority said in a news release.