And the Bridges (& Roads) All Fall Down...

On the day that gay marriage dominated the national headlines, the Urban Land Institute and Ernst & Young released a comparatively little-noticed global report on the state of the world’s infrastructure.

I understand that gay marriage strikes a moral cord with many members of the American electorate on both sides of the issue. But I also hope the candidates’ positions on the economy -- and the pressing needs of the nation’s crumbling bridge and highway infrastructure -- will be at least as big a driver of the presidential election.

In prior postings, I have chronicled the pathetic failure by Congress to pass a multiyear bridge and highway funding bill. That thorny issue has not changed, though the report, "Infrastructure 2012: Spotlight on Leadership," offers some welcome news on the infrastructure font. Particularly, it details how a lack of federal leadership has forced state and municipal officials to come up with their own funding solutions through user fees (tolls), sales or gas tax increases, infrastructure banks, or public-private partnerships.

Maureen McAvey, executive vice president of the ULI's Initiatives Group, said in a Webinar on May 9, "One of the things that is apparent to us is that all around the world, even in these tough economic times, infrastructure is still seen as an important economic driver." Most governments and businesses in Europe and other Western countries, as well as in emerging economies, believe that "infrastructure is a strategic priority both to control and expand future growth and to ensure long-term prosperity."

Many countries, including China, have been forced to curtail ambitious infrastructure investment programs. However, McAvey said private funding is becoming more of a player in this sector. Insurance firms, pension funds, and sovereign wealth funds are interested in investing in infrastructure, but they are finding it difficult and complex to access infrastructure opportunities.

That needs to change if we are going to keep pace with the investments that must be made to keep our infrastructure in a state of good repair. Due to the tremendous damage caused by the recession, public financing for infrastructure simply won’t get the job done. Creativity, if that is possible in the Beltway, needs to be employed. Congress, as well as states and municipalities, must look at user fees, gas tax increases, and public-private partnerships to fill the gaps and create much-needed jobs in the construction sector.

In the New York region, some labor unions are suffering unemployment rates above 25%. Some report that about half their members are riding the pines at their union halls looking for work. However, New York City and New York State are pressing forward on a host of billion-dollar-plus endeavors, though many will require federal assistance to break ground or progress toward a ribbon cutting.

The ULI and Ernst & Young singled out New York City as a national infrastructure innovator for its multibillion-dollar investments in the World Trade Center transit hub, the Second Avenue subway, the Long Island Railroad tunnel under the East River and into Grand Central Station (also known as the East Side Access), and the planned replacements of the Goethals and Tappan Zee bridges.

The Port Authority of New York and New Jersey is planning to engage in a public-private partnership to build the $1.5 billion Goethals Bridge. It is also planning to raise the Bayonne Bridge to make the authority’s New Jersey seaport accessible to today’s larger ships. That project is expected to cost about $1 billion.

New York Governor Andrew Cuomo has doubled the 2012-2013 highway-letting program and has accelerated a host of bridge, highway, and other infrastructure projects throughout the state to create jobs and keep pace with the state’s needs. He has also proposed establishing an infrastructure bank to fund high-priority projects in the future.

The governor’s office has offered little information on how the state will pay for these expedited projects, except to say that the money will come from state and federal sources. The infrastructure bank is a work in progress but would tap both the public and private sectors.

Barack Obama and Cuomo are marching forward with the $5.2 billion plan to replace the Tappan Zee Bridge between Westchester and Rockland counties. Recently, the project received a setback when it was learned that the state’s application for Transportation Infrastructure Finance and Innovation Act (TIFIA) financing was rejected, even though the Obama administration singled out the bridge last October as one of 14 high-priority projects nationwide.

Federal and state officials involved in the project are confident it will quality for TIFIA financing once Congress has approved a new federal highway bill. Congress has until June 30 to pass a multiyear bill. Political observers maintain that a key to the approval of at least the Senate’s two-year funding bill is the endorsement of the controversial Keystone Pipeline project.

Officials engaged in the Tappan Zee Bridge project tell me there is bipartisan support for it to move forward this year and for increased funding of the TIFIA program that would help offset what could be large toll increases to pay for the new span. If all goes according to plan, construction of the new Tappan Zee Bridge could begin in the late summer or early fall -- at the height of the presidential campaign.

Other innovators cited in the ULI-Ernst & Young report included the city of Chicago and Mayor Rahm Emanuel for embarking on a $7.2 billion Building a New Chicago plan that will rebuild transit, sewer, and water systems and improve parks and city schools. The plan is to be funded by direct user fees, private investment, and cost savings. In addition, the city is looking to establish a Chicago Infrastructure Trust to attract private funding for infrastructure projects.

North Carolina’s Research Triangle received mention for raising local funds for a planned three-county transit system. Durham County passed a ballot referendum in late 2011 to fund its portion of the system. Votes must be taken by the other two counties (Orange and Wake) for the initiative to move forward.

News out of Washington will be coming fast and furious from now until June 30 as the House and Senate attempt to work out a compromise on a federal highway spending bill.