Hillary Clinton backs de Blasio push for design-build P3 authority

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Former Democratic presidential candidate Hillary Rodham Clinton called for city use of public-private partnerships based on design-build delivery for infrastructure projects.

New York Mayor Bill de Blasio has been pushing the state legislature for such approval.

“There are things we can do quickly and relatively inexpensively to solve our transportation challenges,” Clinton said during Friday afternoon's keynote speech at transportation think tank Regional Plan Association's annual assembly at the Grand Hyatt Hotel in Midtown Manhattan.

Until this year, New York State allowed design-build for itself for major projects such as the LaGuardia Airport reconstruction in Queens and the rebuilding of the Kosciuszko and Mario Cuomo (nee Tappan Zee) bridges.

New York City, however, has lacked the authorization until two months ago when Gov. Andrew Cuomo, concurrent with his declaration of a state of emergency for New York City Housing Authority, granted the city limited use -- for NYCHA repairs and for use on parts of the Brooklyn-Queens Expressway.

De Blasio, responding to a Bond Buyer question at a news conference on Thursday, said design-build could save the city billions of dollars and shave years off some major infrastructure projects. Momentum has been building of late, he added, despite the city's strained relationship with Albany.

"I will tell you that as strange as some of the things that have happened in Albany this year have been, there is a silver lining," the mayor said as he released his $89.1 billion executive budget in the City Hall Blue Room.

Clinton, whose resume includes eight years as a U.S. senator from New York, shaped her call for a national infrastructure funding bill around the needs of New York's economy -- the nation's largest -- referencing such projects as the Gateway tunnel, the East Side Access subway extension and emergency repairs to NYCHA units.

Trump's campaign call for a $1 trillion infrastructure program has sputtered since he took office last year. Inaction from Washington has stalled the Gateway project to replace deteriorating train tunnels between New Jersey and New York.

Design-build is a simplified procurement that combines bidding for the design and construction into one contract that a single entity manages. Clinton cited major design-build projects the Port Authority of New York and New Jersey is undertaking, notably LaGuardia.

According to Clinton, 38 states have passed enabling legislation. The Design-Build Institute of America favors city use nationwide.

“New York and New Jersey have not adopted state legislation enabling public-private partnerships and I would hope the work being undertaken by the Port Authority would help catalyze support for that at the state and local level, and I think New Jersey and New York could provide cities with more tools to deliver projects,” said Clinton.

She said the projected $3.5 billion for each mile of track for East Side access, designed to reroute Long Island Rail Road trains to Grand Central Terminal, was an example of public project cost overruns gone out of control.

“Our public agencies often assume risks they have no control over, such as schedule and cost overruns," said Clinton. "Why not shift these risks to the private sector for our trickiest, most complicated projects? And then we can hold them accountable for delivering projects on budget and on time."

According to De Blasio, any discussion of design-build for cities was a non-starter until recently.

"We went from design build being almost an off-limits discussion just a year ago or being talked about in small little increments to now it’s here for the BQE," he said. "It’s here for NYCHA, although we want to clarify that, we want to make that more general and consistent for NYCHA. But still, there’s something going on.

"I think this has sort of been a crossover moment where now design-build is in the front burner and a lot of times this is how changes get made. Like there’s a first breakthrough and then you can build out."

De Blasio dismissed the notion that labor unions oppose the concept.

"Look, the whole fallacy that labor has a problem with it is ridiculous. The unions here, including the building trades, have uniformly said in the city they support it, they’ve made that very clear in Albany."

Next year, said the mayor, could mark a big breakthrough for design-build, especially if Democrats regain control of the state Senate. Democrats won two special elections recently to claim a 32-31 numerical majority but still lack a working majority because Democrat Simcha Felder of Brooklyn caucuses with Republicans.

"There's a big election in 2018 on a statewide level. The New York State Senate is up for play, very much so," Howard Cure, director of municipal bond research for Evercore Wealth Management, said on a Bond Buyer podcast. "I'm a little skeptical about it happening before the election, but maybe 2019 is where to look for it."

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Infrastructure Budgets Public-private partnership Hillary Clinton Bill de Blasio Andrew Cuomo City of New York, NY State of New York State of New Jersey New York New Jersey Washington DC