Financing for new Tappan Zee Bridge to include federal loans, grants

Details regarding how a new Tappan Zee Bridge will be financed will have to wait until the state receives proposals from the four finalist teams come June, Thruway Authority officials said Feb. 28 at a public hearing in Rockland County.

Due to the new design-build format under which the bridge will be constructed, state officials won”™t know the exact cost of the project until they review and select a winning bid.

The most recent estimate for the project”™s cost ranges from $5 billion to $6 billion, with financing options including federal grants and loans, traditional bonding backed by toll revenue and pension fund or other private investments, Thomas J. Madison, executive director of the Thruway Authority, said at a Feb. 22 cabinet meeting in Albany.

“There”™s been talk of about a $5 billion project. That could swing significantly in either direction depending on the kinds of designs and best-value proposals that we receive,” Madison said.

Earlier in February, the Thruway Authority released a Dec. 28 letter of intent submitted to the U.S. Department of Transportation in which Thruway officials say they will apply for a loan of up to $2 billion under the Transportation Infrastructure Finance and Innovation Act.

The letter noted that it would cost the state between $1 billion and $1.5 billion to maintain the bridge if no replacement is built.

Madison also said at the cabinet session that the Thruway Authority may apply for federal TIGER ”“ or Transportation Investment Generating Economic Recovery ”“ grants as part of the financing package.

It was not immediately clear what those grants could be worth. For the 2012 fiscal year, the U.S. DOT is authorized to award a total of $500 million in TIGER discretionary grants.

The possible inclusion of private sources of investment contradicts multiple statements made by state Department of Transportation Secretary Joan McDonald.

At a Dec. 14 stakeholders meeting, McDonald said, “First and foremost, this will be a publicly funded project. No P3 or private equity investment will be further contemplated,” according to a transcript.

McDonald reaffirmed that the bridge would be entirely publicly financed in a Jan. 11 interview with the Business Journal.

However, multiple sources close to the project told the Business Journal that private investment is not likely to be seriously considered.

At the Feb. 28 hearing, Thruway Authority spokesman Andrew O”™Rourke said only that all financing options are still on the table.

More than 500 residents and dozens of officials representing both Westchester and Rockland packed the Palisades Center community rooms in West Nyack Feb. 28 for the first of two public hearings on the Tappan Zee Bridge draft environmental impact statement.

While state transportation officials have closed the door on including mass transit in the present design plans, many attendees still demanded answers while others urged the state to build the bridge first and then to add mass-transit components.

At the Feb. 22 meeting in Albany, Madison estimated a bus rapid-transit system for the 30-mile corridor along Interstate 287 would cost Rockland $3.5 billion and Westchester between $1 billion and $1.5 billion.

However, Kate Slevin, executive director of the Tri-State Transportation Campaign, said there is little evidence supporting those numbers.

“I don”™t know where they”™re getting those numbers, but there are certainly more creative and innovative ways to add mass transit to the whole corridor than the few the state has discussed,” she said.

According to the U.S. Government Accountability Office, Slevin said, bus rapid transit construction projects in the U.S. cost $13.5 million per mile on average, rather than the estimate of roughly $166 million per mile put forward by Madison.

Ross J. Pepe, president of the Construction Industry Council of Westchester and the Hudson Valley Inc. and one of the leaders of the group ReplaceTheTZBridgeNow.Org, said the priority should be to build the bridge first and then to add a mass transit component so as to not complicate and stall plans.

“At $5 billion it”™s affordable and it will have all the components in it that are necessary to make sure mass transit moves forward in the future.”