Focus of Ongoing Series: Project Financing

New City, NY - Rockland County Legislative Chairwoman Harriet Cornell recently convened another in an ongoing series of public summits regarding the Tappan Zee Bridge/I-287 project to build a new bridge and greatly enhance the mass transit along the I-287 corridor. This summit, held September 29 at Rockland Community College’s Technology Center, lasted four hours and focused on the financing of the project.

“I’ve been deeply committed to transparency and public input throughout the entire process of this project,” Cornell said, “and I’m delighted to see how many are in attendance today. This is the type of public meeting I dared to hope for when I initiated this series of summits.” Approximately one hundred people were in attendance, a combination of elected officials and stakeholders of all stripes.

The summit opened with a recap of the entire project, delivered by Project Director Michael Anderson of the NY Department of Transportation, but the summit quickly turned to the topic of the day. “For those of you who may have come here today thinking we would start telling you how we’re going to pay for all of this,” began Philip Ferguson, head of the project’s finance team, “we’re not even close to that point in the process.”

The tab for the entire project is projected to be $16 billion dollars, $6 billion for the bridge and $10 billion for every element of the mass transit components, which include commuter rail through Rockland connecting with Metro North’s Hudson Line, as well as Bus Rapid Transit (BRT) in both Rockland and Westchester Counties. $6 billion will be needed by 2013, when construction of the bridge is expected to begin, while the rest of the money can be raised as needed during the ensuing five years.

To secure that funding, the first thing the New York State DOT team did was hire a financial advisor contracted for the next five years: Merrill Lynch, assisted by Loop Capital and the law firm of Winston and Strawn. The contract stipulates that the financial advisor is forbidden from bidding on the project.

Per Merrill Lynch’s advice, Ferguson’s team broke the financing process down into three phases. The first part, which develops core strategies, considers every possible resource for funding, including numerous grants and programs, state bonding, tolls, fares, and public-private partnerships, just to name a few.

At the request of Chairwoman Cornell, the New York State Comptroller Thomas DiNapoli has attended or sent representatives to the Summits to lend perspective on financing options. Joseph Ruggiero, Assistant Comptroller, made it clear that the money would likely not be coming from the state, which is close to its debt capacity. “New York needs to make the case to get federal assistance for the project,” Ruggiero said.

One immediate possibility for that federal funding will be through the federal government’s transportation law, known as SAFETEA-LU, which provides funds for roads, bridges and public transit systems nationwide. But there are a multitude of other possibilities. A citizens’ stakeholder advisory working group (SAWG) has been meeting monthly to keep tabs on the process and has been a source of innovative ideas.  This newly-created Finance SAWG plus SAWGs created several years ago on Land Use, Environment, Bridge Construction, and Traffic and Transit were formed by the state transportation team at Chairwoman Cornell’s urging.  “The days of Robert Moses are over,” Cornell said.  “It is imperative that residents be involved every step of the way.  Who knows our communities better than those who live here? Many ideas have been adopted thanks to the efforts of these dedicated people.”

Ferguson said that “step one of the process is about turning every stone imaginable to learn not only all of our funding alternatives but also the legal issues involving each alternative.” Ferguson anticipates the Core Strategy Report will be finished by the end of this year. The second step of the process involves the financial team refining its choices and making its ultimate selections for how it will fund the project, and the final phase enacts implementation and delivery of the funds.

The summit brought plenty of important and sometimes spirited questions from the audience, but as Chairwoman Cornell said, “That’s what it’s supposed to do.” She promised another informative Summit in early 2010.  Michael Anderson said that early next year, probably in January, his team would host an open house to present residents various transit alignments and update them on financing. And he expected a draft of the environmental impact statement would be completed during the summer of 2010, after which the team will hold various public hearings regarding the findings.