BRADENTON, Fla. — The Southwest Florida Expressway Authority had the potential to issue hundreds of millions in bonds for a toll-road project that was once estimated to cost nearly $1 billion.
Five years ago planning for the project got underway because traffic was snarled at peak times along a 26-mile-long stretch of Interstate 75 between Fort Myers and Naples — a main route from Lee County to Collier County for workers, residents, and tourists in one of the fastest-growing regions in the country.
Today, the Expressway Authority is planning to unwind operations because traffic, like real estate values, plummeted in the wake of the economic downturn that has hit the southwest Florida coast particularly hard.
“It really is a victim of the economic times,” said the agency’s bond counsel, Joseph Stanton, a partner at the law firm Broad and Cassel.
“From everything I saw, the studies that were done and the reports I read, I-75 is such a major artery there will be a need to address congestion issues in the future, at some point,” he said. “The question is who is going to take on the project.”
At the behest of officials and drivers in Lee and Collier counties, state lawmakers approved a bill establishing the SFEA with bonding authority in 2005 and then Gov. Jeb Bush signed a law creating the state’s 10th expressway authority.
The authority’s prime responsibility was studying ways to accelerate the expansion of I-75 more quickly than plans by the Florida Department of Transportation, which was to occur in phases over decades.
Studies showed then that the four-lane interstate would eventually need significant widening much sooner to handle growth.
With a $1.26 million start-up loan from FDOT, and $925,000 in loans from the two counties, the SFEA contracted with Wilbur Smith Associates as project manager and to do traffic and revenue studies on various configurations, including adding express toll lanes on I-75. The Florida Turnpike Enterprise conducted similar studies.
Two investment-grade traffic and revenue studies were produced.
The authority hired Broad and Cassel as bond counsel and Public Financial Management Inc. as financial adviser to prepare funding and financing analyses, including the potential use of a public-private partnership.
In early 2007, during the height of the real estate bubble, the search for an executive director was eventually called off when the Legislature began considering bills to order local government cutbacks in escalating property taxes. Subsequently, Collier County commissioners significantly cut their contribution to the Expressway Authority.
The SFEA continued studying alternative projects while FDOT moved forward with the first phase of its planned projects, widening the four-lane interstate to six lanes. That project has since been completed.
When the real estate bubble burst and the credit markets subsequently blew up in 2008, traffic began to decline, though some of the authority’s presentations predicted the decline would not last long.
However, the recession and prolonged economic downturn took its toll on traffic levels, which could no longer support a viable project.
Early this year, the authority’s board voted to investigate disbanding itself.
While there once was enough traffic to support toll-revenue bonds, it could now take nearly a decade before traffic levels generate a viable project, according to William Barton, a retired engineer and chairman of the SFEA’s board.
Barton takes a philosophical view of the funds that have already been spent to hire consultants and undertake studies that now must be shelved.
“Throughout life, we humans start down a pathway with a certain bit of knowledge in our grasp and when that data changes dramatically then, of course, your path has to change as well,” he said. “We had a viable agency that is now meeting its demise for reasons well beyond the control of the organization. None of us can control the economy.”
Barton is glad that the economy changed when it did rather than two years later when the authority would have spent much more time and money on consultants, he said.
In just a couple of years, the it might have issued “seed money” bonds for its project, he said, adding: “Fortunately, we didn’t have to make those kinds of decision.”
Of the start-up funding the authority received, about $150,000 remains unspent from the county loans while about $80,000 remains unspent of the loan from FDOT, according to Amy Davies with Wilbur Smith Associates.
“We’ve been operating in a slow-down mode,” Davis said.
The authority is currently waiting to hear about the disposition of the FDOT loans and whether they must be repaid before taking the final steps toward official disbandment, which may require an act of the Legislature.
“I think for the information gathered the money has been spent well,” Stanton said. “There is good information out there about what the projections are and the anticipated traffic on I-75.”
If the widening project becomes viable in the future, Stanton said the Expressway Authority’s studies would still be useful.
Once the status of the FDOT loan is known, the authority will present that information and its recommendation for disbandment to Lee and Collier county commissioners for concurrence, he said, adding that ultimately the authority most likely will request that the Legislature dissolve the agency.
The SFEA expects to meet to begin that process in the first quarter of the year.