One year later, the odyssey led by Florida transportation officials seeking to lease Alligator Alley is over as quietly as it started.
By the 4 p.m. deadline Monday, the Florida Department of Transportation had received no proposals from six teams of bidders who expressed interest in the project in 2008. That was after several delays, including one in January that put off the proposal deadline for an additional five months. It was pegged as an effort to allow credit markets to thaw and for teams to consolidate and share risk.
However, about 4:30 p.m. Monday, department officials released a statement that not one bid had been submitted.
Kevin Thibault, assistant FDOT secretary and the project’s head, said Monday evening he was surprised, but had prepared long ago for the unexpected.
“It’s something you can’t normally expect,” said Thibault. “You kind of plan that you will have a scenario where you don’t get any proposals.”
He said run-of-the-mill construction projects receive no bids, from time to time. It is a reality of the business, he said. That is not the case with any current projects, however.
“Each one is unique,” he said. “There will be different factors that will drive the proposers to put together their bids. Time could be a factor. It could be that, with some of them, the added time gave them the ability to change their minds.”
Thibault said he had no regrets about changing the timeline, however.
He said it is too early to speculate whether the state will pursue a lease of the Alley at another point in the future. Additionally, he said FDOT would have to hold discussions about whether to increase tolls starting in July, as planned. A toll schedule released in October called for tolls to go up to $3.75 for cash transactions from the current rate of $2.50, starting July 1 this year.
Bob Poole, an advocate for public-private partnerships, speculated early Monday that the number of bidders might narrow — to two or three.
“When you deal with a project that is based on voluntary usage ... there is some inherent risk in how many people paying how much are going to use a project like that,” said Poole, who is director of transportation studies for the Reason Foundation, a libertarian think-tank.
He pointed to recent brush fires that scoured 30,000 acres in the Big Cypress National Preserve, shutting down Alligator Alley intermittently for three weeks, meaning no tolls were collected while the road was out of use. Events like that remind investors of the risk inherent to leases of public transportation assets such as roads.
Moreover, said Poole, international credit markets have hardly thawed compared to January. Poole called it “increasingly difficult, but not impossible,” to secure the credit needed to lease a large piece of the transportation pie, from an airport in Chicago where a lease deal championed by Mayor Richard Daley fell through last year to a road in Chile, where the firm Global Via Infrastructure put down 40 percent equity to lease a road in 2008.
Global Via was originally partnered with the collapsed investment bank Lehman Brothers and was looking for a new partner to put up the capital needed to lease Alligator Alley. Unofficial estimates placed the lease price of the road at about $500 million for 50 years.
After news broke Monday that no bids had been received, state Senator Dave Aronberg was jubilant. He spent the past year speaking publicly against the proposal and introducing legislation that would block similar deals. However, it was to no avail during the recently-concluded legislative session.
“This deal was ill-conceived from the beginning,” said Aronberg. “It’s a shame that the taxpayers of Florida had to waste $3 million to get to the point where the state was turned away at the altar. The state shouldn’t have been at the altar to begin with.”
That $3 million Aronberg referred to is how much he says the state paid to litigate the deal and defend it from attacks that mounted over the 13 months it was pursued. The first public mention of a potential lease of the 78-mile toll road from Naples to Fort Lauderdale was at an April 2008 meeting held in Orlando. Local residents were outraged from the get-go that FDOT officials would hold a meeting more than three hours from the counties affected by the proposal.
The deal was fraught from there.
In June, officials announced they would re-post the request for qualifications, the equivalent of re-advertising a job opening to seek resumes. They said they needed to clarify some of the requirements and ask for additional information. The field of interested firms dropped from eight to six after that.
When, during a “short-listing” process, the state did not remove any firms from the running and instead asked all six to bid, a few eyebrows went up, including Poole’s. It typically makes sense to invite just two or three firms to bid, Poole said, in order to give those in the running a sense that they have a good shot.
Phineas Baxandall, a transportation expert with the U.S. association of Public Interest Research Groups, said now is actually a better time for states to leverage their own money, anyway.
“It would be a case of outsourcing to a more expensive middle man now than when they said the deals weren’t good enough (in January),” said Baxandall. “In the meantime, the stimulus bill has introduced some bills such as the Build America bonds.”
Baxandall has been opposed to the lease proposal since the first suggestion and minced no words Monday about the state’s efforts: “The history of this has been a string of spectacular failures that are continually talked about as if a great payoff for the public is just around the corner.”