Feds Reject Loan Application for Cuomo’s Transit-less Tappan Zee Bridge
In a major rebuke to the Cuomo administration’s plans for a transit-less Tappan Zee Bridge, the federal government rejected New York State’s application for a low-interest federal loan yesterday. The loan, which would have been made under the popular TIFIA program, was an important component of Cuomo’s plans to finance the new Tappan Zee.
Demand for TIFIA loans was high; 26 letters of interest were submitted requesting a total of $13 billion, far more than was available. Excluding a pie-in-the-sky submission for a “pod train superhighway,” New York’s application for $2 billion to help build the new Tappan Zee Bridge was the largest request.
Even so, many expected the project to get a nod from the feds. After all, the Tappan Zee was one of only 14 infrastructure projects nationwide to be chosen for expedited review by the Obama administration, a sign of special favor.
Instead, five projects were invited to move forward in the TIFIA application process. Notably, some of the projects chosen include bus rapid transit components, as in Colorado’s US 36 project, or joint carpool/toll lanes, as in Northern Virginia’s I-95 project. In contrast, the Tappan Zee replacement project would double the width of the existing bridge and open all that space to single occupancy vehicles.
New York could reapply for next year’s round of TIFIA loans, said U.S. DOT spokesperson Bill Adams, but won’t receive any this year. Without credit assistance from the feds, financing the Tappan Zee Bridge gets that much more difficult. TIFIA loans currently offer a 3.15 percent interest rate. Thruway Authority loans, according to analyst Charles Komanoff, average about 4.5 percent. On a $2 billion loan, that’s a sizable increase in the price tag for the project.
The difference would likely have to come from higher tolls, either for drivers crossing the Tappan Zee or for those on the rest of the Thruway system. According to Komanoff’s calculations, the difference in toll prices without the low-interest loan will be sizable. In the best-case scenario — one without any cost overruns and in which high tolls don’t scare off drivers — the TIFIA rejection will push tolls from $10.90 to $12.30. In a case with higher construction costs than estimated and lower traffic levels than projected, tolls would rise from $18.40 with the TIFIA loan to $20.50 without.
The Thruway Authority did not respond to a Streetsblog inquiry about how the loan rejection will affect its plans to finance the new bridge.
Why was the Tappan Zee’s application rejected? Adams wouldn’t say, except to note that there was more demand for projects than dollars to distribute.
But maybe it’s the fact that local leaders, including the county executives, state senators and mayors on both sides of the bridge, have been loudly demanding the restoration of transit. Maybe it’s because without that transit, the Tappan Zee does nothing to meet the state and nation’s sustainability goals, which are a major selection criteria in the TIFIA process. Maybe it’s because the state’s misleading and inadequate environmental impact statement leaves the Tappan Zee project open to lawsuits. Maybe it’s because the Cuomo administration still hasn’t told anyone how they plan to pay for the rest of the bridge, and the total price tag of the project changes based on who’s asking.
Whatever the reason, it looks like the number of people asking questions about the Cuomo plan for the Tappan Zee just keeps growing.