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Tappan Zee Bridge construction could be delayed

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 the state Thruway Authority. (Dec. 5, 2012) Photo Credit:

Groundbreaking on the new Tappan Zee Bridge likely will be delayed while the state awaits word on whether it will get a nearly $2 billion federal transportation loan considered the linchpin of the $3.1 billion project's financing plan, Newsday has learned.

Officials in Gov. Andrew Cuomo's administration said in 2012 that construction on the five-year project to replace the deteriorating span that links Westchester and Rockland counties would begin by December. They later revised the proposed start to early 2013. That timetable now appears in doubt while Cuomo administration officials try to secure federal funding to jump-start financing of the bridge.

A federal Department of Transportation panel that approves the low-interest Transportation Innovation and Infrastructure Act (TIFIA) loans used to repair bridges and tunnels scheduled a Jan. 15 meeting in Washington, but discussion of the Tappan Zee project isn't on the agenda. And the next meeting isn't until Feb. 15.

State officials said it could be several months before the project, whose cost could climb to $3.9 billion when other expenses are factored in, comes up for consideration by the U.S. Department of Transportation's Credit Council.

Cuomo administration officials initially declined to comment publicly on the issue when questioned on Wednesday and Thursday.

State officials told Newsday that discussions with federal officials about the loan application was "going well" and could be resolved in the coming months.

"We never expected to be on this month's agenda," said one official who asked to remain anonymous.

On Thursday, after the story appeared on, the governor's spokesman Brian Conybeare denied that the financing issue has delayed construction.

While state officials acknowledged changing the timetable for construction to begin from December 2012 to early 2013, Cuomo's officials contend on Thursday that they had never set a firm date for when a shovel would go into the ground. The officials therefore argued that it was wrong to say there is a delay.

"As we have consistently said, the new bridge is on schedule to begin early construction activity this year, the TIFIA application is moving positively and any reporting otherwise is simply false," Conybeare said.

During an address Thursday at the Hudson Valley Gateway Chamber of Commerce, state Transportation Commissioner Joan McDonald expressed confidence that the project remains on track, despite the lack of financing.

"The bridge is at a point in time where everything the governor laid out a year ago happened," McDonald said. "The financing discussions are ongoing."

Several other projects vying for about $17 billion in federal funding have been listed on agendas issued by the credit council over the past several months.

The council reviews applications from cities and states seeking federal loans and makes its recommendation to Transportation Secretary Ray LaHood, who has the final say.

The list of highway, bridge and tunnel projects under consideration for the Transportation Infrastructure and Innovation Act loans has grown to 27 since New York sent in its loan request in September. Taken together, those projects have a total value of $38 billion. TIFIA can fund up to 50 percent of a project's cost, and the loan requests now exceed the $17 billion total that has been allocated. Among the latest entries is a request to secure funding to build a subway link in Los Angeles at a cost of $3.9 billion.

New York State's initial request for a $2 billion loan to help fund the Tappan Zee Bridge was turned down by the federal government last spring, but that was before the pool of available funds was expanded to $17 billion.

In recent months, federal officials indicated that the state's chances had improved this time around. During a November stop in New York City in the days after Hurricane Sandy, LaHood suggested to Newsday that it wouldn't be long before the government turned over the loan for the Tappan Zee project.

"Before this [hurricane] happened, the governor and I talked a lot about the Tappan Zee," LaHood told Newsday. "It was his top priority before this mess occurred. And so if it's his top priority, it becomes our top priority."

The delay in securing federal financing has transportation advocates wondering whether the state's bleak economic outlook could be playing a role in the delay. As a condition for turning over the loans, the feds first want to know that the State Thruway Authority is a good credit risk.

"The financing details of this project have never been transparent," said Veronica Vanterpool, the executive director of the Tri-State Transportation Campaign. "And the federal government wants to see details of a firm financial plan for the state before they sign off on the loan."

The contract to build the new Tappan Zee Bridge was signed in December when the state Thruway Authority board selected Tappan Zee Constructors, a consortium led by Fluor Enterprises of Irving, Texas. The contract awaits the approval of the state comptroller and attorney general.

Financing remains the last major hurdle the state faces, assuming there are no court challenges that would delay the project. The environmental group Riverkeeper said it is still weighing a legal challenge that would likely center on the project's impact on the Hudson River's aquatic environment.

In December, Thruway Authority Executive Director Tom Madison said he was confident the state could secure a loan to pay for at least a third of the project's cost. The rest would be financed through the sale of Thruway Authority-backed bonds, and the money would be repaid through tolls on the bridge.

The current $5 toll is expected to increase, but Cuomo administration officials have yet to say just how high the new fare could climb.

Much will be decided by the size of the low-interest loan that's secured, McDonald said. A smaller loan would mean that the Thruway Authority has to recoup more through the sale of bonds and take on more debt. "It's one of those chicken-and-egg issues," she said. That debt will have to be paid back in tolls.

Among the feds' concerns will be the financial health of the Thruway Authority, which will issue the bonds.

During the past year, under Madison's direction, the Thruway Authority has undertaken a number of cost-cutting measures in an effort to show credit-rating agencies that it's a good risk. An unfavorable rating from the agencies could increase the Thruway Authority's borrowing costs.

Last year, the credit-rating agency Standard & Poor's gave the authority a negative financial outlook, citing uncertainty over whether the agency would increase tolls and a clear financial plan for building the new bridge.

The agency is not alone in its borrowing worries.

On Monday, state Comptroller Thomas DiNapoli noted that the state's crippling debt load will make it harder to secure funding for its critical infrastructure needs. The state has the second-highest level of debt in the nation and is quickly approaching its borrowing limit, the comptroller noted. By year's end, the state's debt capacity is expected to reach $509 million.

"The timing of new construction or maintenance of state highways and bridges, education facilities, state-funded projects for the Metropolitan Transportation Authority, and capital investments funded by the state's economic development initiatives could be affected if the state cannot borrow enough money," DiNapoli said.

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