Though a TIFIA loan appears to be in the cards to help finance the new Tappan Zee Bridge, there appears to be a disconnect between Albany and Washington about how big the loan will be.
The New York Thruway Authority says it is in the process of obtaining a $1.5 billion Transportation Infrastructure Finance and Innovation Act loan.
But the U.S. Department of Transportation guidelines indicate a loan amount would be more than $200 million smaller.
The DOT is telling the authority that, if approved, a TIFIA loan would cover up to 33% of the eligible costs of the project. The Thruway Authority had requested the TIFIA loan be for 49% of the eligible costs.
In mid-December the authority approved the lowest priced design option for a new Tappan Zee Bridge. The authority expects the bridge to cost $3.14 billion plus $600 to $800 million for project financing and management, oversight, contingencies and aesthetic improvements.
At 33% of the $3.9 billion that the authority says the bridge will cost, the maximum loan is $1.287 billion. That's well short of the $1.5 billion figure Gov. Andrew Cuomo publicized in a March 8 news release. Either way, it would be the largest TIFIA loan ever.
It is unclear as to why the authority is describing the potential loan as $1.5 billion. When this discrepancy was pointed out to Dan Weiller, director of media relations and communications for the authority, he said, "You're not the only one who has asked this question." He declined to explain the relationship between 33% and $1.5 billion.
Asked about the authority's description of the loan as being for $1.5 billion, a U.S. Department of Transportation spokesman said, "I can't explain a number that I didn't give…. The final details about the exact cost and the federal contribution would be determined over the course of the ongoing evaluation and then application process."
The DOT passed the authority's loan request in the preliminary review stage. The department suggested that the authority enter the creditworthiness review stage. For this review the agency had to pay $100,000 to the DOT to assess the authority's credit, which it paid March 11.
TIFIA loans generally have lower interest rates than those found in the municipal market. They also can have more flexible terms of repayment.
Assuming the authority passes the creditworthiness review, the DOT would have to formally apply and then negotiate the loan's final terms.
As a matter of policy the department approves TIFIA loans for no more than 33% of eligible project costs. It was because of this that the department reduced the authority's suggested loan size, a department spokesman said.
The Tappan Zee Bridge crosses the Hudson River about 15 miles north of New York City. The replacement will be built in the same location.
The authority is currently developing a final plan for financing the bridge, said Shane Mahar, deputy director of media relations and communications for the authority.
With the department suggesting a lower TIFIA sum, the authority "will just have to change the plan of finance if [the lower sum] is finalized," said John Hallacy, manager of municipal research at Bank of America Merrill Lynch. "But there's a lot of moving pieces here and one thinks it could be shored up some other way."