|
the private sector."
A public-private success story Florida can tout, according to Norment, is the agreement between the city of Orlando, the
state of Florida and Universal Properties - the real estate arm of Universal Studios - by which Universal paid for a new
interstate interchange.
"Both public and private sector partners realized that when that interchange was put in, it would increase the property
value substantially," he said. "There were 200 to 300 acres that there was no access to. Through a TIF (tax increment
financing) arrangement, 75 percent to 80 percent of real estate revenues are paying off the bonds to build the interchange."
The private sector partner may wear a number of different faces, he said; it may be a real estate firm, a highway
construction company or an entity that partners with a city or county and assesses user tolls - as in the case of the Chicago
Skyway.
In this example, Norment said, the city of Chicago turned the management reigns over to Chicago-based Schlickman &
Associates, a transportation consulting firm. By helping a consortium known as Cintra-Macquarie in its winning bid, the
company secured a 99-year lease with the city; Cintra-Macquarie is paying $1.8 billion for use of the toll concession and it
hopes long-term, efficient management will result in operation of the Skyway at a cost less than what the city charges in
regulating the tolls.
Meeting the congestion factor head on, Schlickman & Associates rolled out a variable-rate tolling program for truckers
driving heavy rigs with three axles or more. The program, which took effect along the Skyway in February, offers a noticeably
discounted toll rate if truckers travel the stretch during the evening, after peak commuting times.
Why don't more major road projects involve private players? Norment says the answer may include two factors: 1) the mindset
of federal and state public transportation entities and 2) the level of risk and amount of time private partners are willing
to invest to reap a long-term reward.
"Experience has illustrated that it takes time to put these (public-private) deals together," he said. "One of the reasons
a state DOT will go into a project like this is that it will take less time to structure the financing. The negotiation time
on some of these transportation projects is as little as one year, with a two- to three-year construction timeframe - versus a
five- or seven-year state DOT funding program."
The Dulles Greenway, a 14-mile, limited-access highway carrying vehicles from Washington D.C.'s Capital Beltway and Dulles
International Airport to Leesburg, Va., was a $340 million project funded through a 42.5-year lease by a private consortium
known as Toll Road Investors Partnership II. To finance it, TRIP II put up $40 million in equity and secured $310 million in
privately placed taxable debt. Ten institutional investors provided $258 million in long-term, fixed-rate notes. Three large
banks agreed to provide the construction funding and $40 million in revolving credit. Loans on the greenway, which opened to
traffic in 1995, are being repaid with toll revenues; financing is secured by a first mortgage and security interest in the
developer's right, title and interest in the project.
|
Would any of these models fit the New Mississippi River Bridge project scenario?
Jim Pennekamp, executive director of Leadership Council Southwestern Illinois, says that the idea of public-private
partnerships is one that arose years ago in the early planning stages of the new bridge effort.
"Early on in the planning, (funding) alternatives were explored," he said. "At that time, the decision was made by IDOT and
MoDOT that traditional financing was the best option. I know at this point, we're waiting for a hopeful resolution of the
federal transportation bill. Once we find out what happens, then in fact we can pursue other discussions. I think most
people's attitude right now is that the discussion is open-ended."
Pennekamp added that the models referred to by Norment work in a market where there is significant land appreciation.
"I don't think that model would work in the context of the New Mississippi River Bridge," he said. "The only revenue stream
that I am told would work is tolling, and it's controversial."
U.S. Rep. Jerry Costello, a Democrat representing Illinois, says tolling the new bridge would negate one of the goals of
the project - to reduce congestion from Illinois across to Missouri.
"Traffic congestion is only getting worse," the congressman said. "And tolling just one bridge (across the Mississippi
River) will not work. You would either have to toll all of them or none of them."
Bruce Holland, chairman of the transportation committee of Leadership Council Southwestern Illinois, says the Lake of the
Ozarks, Mo. formed a transportation district and built a half-mile toll bridge there to open up opportunities for development.
The public-private partnership included the Missouri Highway Commission, the Lake of the Ozarks Community Bridge Corp. and the
Four Seasons Corp.
To fund the $28.78 million project, the bridge corporation sold tax-exempt toll revenue bonds to cover construction costs.
A total of $43 million in bridge system refunding bonds were sold to fund the debt service. The bridge, which connects
Horseshoe Bend and U.S. Business Route 54, was completed in 1998.
"In the planning of the New Mississippi River Bridge, there has been discussion all along about public-private
partnerships," said Holland. "But I don't see that it's going to be like O'Fallon, Mo., where they built Highway K (from
Interstate 70 to Highway 40) for development purposes. In that instance, it was actually the municipality that said 'We'd like
to see it happen.'"
MoDOT had planned the Highway K project into its multi-year transportation funding program, but Holland said the revenue
stream was spread over too many years to satisfy the city of O'Fallon.
"So the city funded the construction of the road and it was a great success," he added. "It opened up a lot of property for
development."
Holland says he would be surprised if there were private sector players willing to fund construction of the New Mississippi
River Bridge, but that there have been Missouri-based discussions about total privatization.
|
