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Tappan Zee price tag could soar to $4.5 billion

An artist's rendition of the design for the

An artist's rendition of the design for the new Tappan Zee Bridge that was selected by a panel of experts as the best value among the three proposals submitted. The winning design must be approved by the State Thruway Authority. (Dec. 5, 2012) Photo Credit:

Financing New York State Thruway Authority bonds, securing properties in Westchester and Rockland counties for staging areas and other costs outside the main construction contract could add as much as $645 million to the cost of the Tappan Zee Bridge replacement project, Newsday has learned.

If those additional expenses are combined with the $3.9 billion in costs directly related to construction, the total cost of the five-year megaproject rises to more than $4.5 billion.

A more expensive bridge likely would push tolls higher when the new bridge is built. Told of new costs likely to be factored in, transportation economist Charles Komanoff said the current $5 tolls could rise to as much as $11.50 on the new bridge to repay debt that will remain associated with the project for decades.

State and federal officials declined to discuss specifics about the final bill for the new Tappan Zee. They acknowledged that the $3.9 billion figure represented the budget for the construction portion of the project only.

"The cost to build the New NY Bridge is $3.9 billion," wrote Dan Weiller in an email to Newsday. "We continue to work on the financial plan of the project and maximizing the federal support through eligible costs that are not related to actual construction."

Earlier this month, Gov. Andrew M. Cuomo announced that the state had secured a $1.5 billion low-interest, long-term loan from the U.S. Department of Transportation to help finance the new bridge. Thruway Authority bonds would fund the rest of the work.

Federal officials have said that the Transportation Department will lend the state an amount equal to 33 percent of the total cost of the project. The loan amount indicates those officials are reckoning the total cost to be $4.5 billion. The difference between that number and the last official cost estimate is about $645 million.

Asked what that additional amount might cover, federal officials sent Newsday an excerpt from regulations that listed items like "acquisition of real property"; "preconstruction activities," including planning and preliminary engineering; and "capital issuance" and "other carrying costs during construction."

Financing costs could be the biggest items that make up the nonconstruction expenditures, Komanoff said.

In January, before Cuomo announced that the state had secured the federal loan, the Thruway Authority approved issuing $500 million in short-term bonds to jump-start work on the bridge, staking out an option to float an additional $200 million in debt if necessary.

The long-term expense related to those bonds could be substantial. In approving the bond issuance, the state comptroller last month said that the Thruway Authority's use of short-term borrowing had "contributed to the significant weakening of the authority's financial condition over many years."

Brian Deery, senior director for highway and transportation at the Associated General Contractors of America, a lobbying group in Washington, translated other items in the federal regulations to encompass engineering and logistical challenges expected in connection with support activities.

"There may well be some costs associated with wherever they are going to be shipping materials from," Deery said. "They might have to buy some land there in what they call a staging area."

The consortium that is building the new bridge, Tappan Zee Constructors, is negotiating with Tarrytown property owners on the village's riverfront for a site where the consortium can place equipment and personnel. Simultaneously, the consortium is in talks with South Nyack homeowners whose houses likely need to be razed to make way for the new bridge.

State authorities also might need to pay for smaller construction projects on the bridge approaches, Deery said.

"There might also be some additional work that needs to be done leading up to the bridge that's not considered part of the bridge itself, like they might fix some interchange to make it more accessible," he said.

Part of the Tappan Zee plan calls for rerouting Interstate 287 to divert traffic to the new bridge as crews dismantle the old structure. Officials also have discussed mass transit options that would require new facilities.

Deery wasn't sure whether Cuomo's massive public outreach campaign in the past year would be eligible for loan support as a planning expense. Administration officials have conducted hundreds of public and private meetings, negotiated labor agreements, opened offices on both sides of the river, appointed panels of world-class experts and commissioned new websites and other promotional materials for the bridge.

The state has not disclosed the cost of those activities.

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