Cuomo administration reportedly reconsiders public funding for the Tappan Zee rebuild, putting contractors on edge

The old Tappan Zee. (Shutterstock)
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In recent days, contractors have gotten word that a public-private partnership may once again be in the mix for the new Tappan Zee Bridge. This worries them. 

“Everyone is kind of waiting and watching and wondering,” said Denise Richardson, managing director of the General Contractors Association, of which all four companies bidding to build the new bridge are the members.

The Cuomo administration had originally said, when the state was seeking bids, that the project would be publicly funded. The possible change would shift the burden of funding the project to private contractors, who would raise the money by attracting private financing against the promise of future toll revenues.

As Bloomberg reported yesterday, "Governor Andrew Cuomo is seeking legislation that would allow private-equity firms to help finance construction of public-works projects, including a new $5.2 billion Tappan Zee Bridge."

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That report, and the scuttlebutt that preceded it, has made contractors uneasy. Four construction and design teams have been prequalified to bid for the bridge's development rights, all working under the assumption that the bridge would be publicly, not privately, financed.

"There’s a lot of merit to looking at the Tappan Zee as a public-private partnership,” said Richardson. “The problem is the timing is not good because you have the design-build teams already selected, and working very hard, spending significant sums of money for a project that could change fundamentally."

But that sort of financing mode would require legislative approval. The Senate has already passed such legislation—sponsored by Senate Transportation committee chair Charles Fuschillo—but the Assembly is not yet on board. Given Albany’s long tradition of behind-the-scenes horsetrading, that may be subject to change, if not this session, then next. Either way, it would fundamentally alter the assumptions upon which the four firms now vying for the bridge's construction rights are developing their bids, due in July.

In his State of the State, Governor Cuomo hailed public-private partnerships, saying, “the task for us is to find leverage with private sector partners. We want to find a 20 to 1 leverage in these projects so we maximize the impact of the state money.”

In the accompany book, the governor implied, but did not explicitly say, that public-private partnerships would be used for the Tappan Zee:

 

Today, I am announcing the New York Works Fund and Task Force to master plan, coordinate, leverage, and accelerate capital investment and put thousands of New Yorkers to work in every corner of the state. We will leverage state investment by a multiple of 20-to-1.

 

We will improve or replace more than 100 bridges. And we will finally build a new the Tappan Zee Bridge — because 15 years of planning is too long.

 

But a few days later his Thruway Authority executive director, Thomas Madison, told the State Senate that that the Tappan Zee would be publicly financed, and there is no mention of a public-private partnership in the state’s request for proposals. The four pre-qualified teams have been scrambling to respond to the R.F.P. by its July deadline.

"This was a decision that needed to have been made before the design build teams were qualified and before the R.F.P. was given to the design-build teams to respond to,” said Richardson.

Matt Wing, a spokesman for the governor, emailed the following statement: “The project has moved forward with public financing with an expedited schedule, largely thanks to the Governor’s design build legislation, which the Legislature passed last year. While we are still considering opportunities to leverage different kinds of private investment, we would need to change state law to pursue traditional public-private partnerships.”

UPDATE: After this was published, Wing disputed the accuracy of the original report that the administration is reconsidering the funding model, and said, “The Tappan Zee Bridge is being built under the new design build law with public financing and it will not be rebid as a public private partnership which would significantly delay the project.”