New York Gov. David Paterson yesterday created a board to oversee the development and implementation of public-private partnership demonstration projects.
"Public pension funds and union pension funds and other private-equity capital is really poised to invest in infrastructure projects," McCall said. "We're really talking about supplementing the kind of capital that has been made available traditionally in the past through the municipal bond market."
The state is not planning sell off any assets, he said.
The commission's executive director, Samara Barend, said that it was possible that private-activity bonds could finance some projects. Nevertheless, she cited the Florida I-595 P3 project, which used private financing, as an example of how assets could be developed using availability payments and no bond financing.
Though the report identified specific projects and policies that the State Maximization Board would oversee, the recommendations ranged from the vague to the specific.
Projects include the construction of a Buffalo Harbor Bridge, partnering with a private entity to maintain the Gowanus Expressway using availability payments, continuing the Metropolitan Transportation Authority's transportation-oriented development initiatives, and developing wind farms off Long Island and in the Great Lakes region.
Asked whether the state would look to using long-term leases for projects such as the $16 billion Tappan Zee bridge replacement, Paterson said he was "not ruling it out" but said that the creation of the board, which falls under the purview of the Empire State Development Corp., was part of the laying of the groundwork to take next steps.
"We're not up to that decision," Paterson said. "There's a lot of work that has to be done to develop the Tappan Zee bridge."
Two pilot projects that would use bond financing are in Syracuse and Yonkers. The report envisions the school districts using tax credit bonds - either Build America Bonds or qualified school construction bonds - to finance or partially finance capital construction totaling $230 million in Syracuse and $1.4 billion in Yonkers. The Syracuse school district would utilize a leaseback structure while Yonkers could model its approach on one in New York City under which a public school in Manhattan is being built using rental and lease revenue from a mixed-use residential and commercial tower constructed above the school.
In order to build more facilities in the State University of New York system, the commission embraced the Dormitory Authority of the State of New York's legislative agenda that calls for legislation that would allow an issuer to sell bonds on behalf of nonprofit foundations affiliated with SUNY campuses. Currently DASNY cannot finance dormitory and education facilities on behalf of foundations that are exclusively affiliated with SUNY. A bill (S.3693/A.8574) that would permit this was introduced this session in both houses of the Legislature.
Much of the language echoed that of earlier P3 proposals made by former Gov. George Pataki and his transportation commissioner Thomas Madison in 2006. That year the department of transportation issued a request for proposals for financial advisory services on the feasibility of P3s for the state but never did hire a firm.
