Sunday, April 6, 2014

Loop 202 Public-Private Partnership Rejected but Another P3 a possibility

The South Mountain Freeway Loop 202 extension public-private partnership (P3) that had been announced last July has apparently been rejected. In the transcribed minutes of the January 17, 2014 Arizona State Transportation Board Meeting, Gail Lewis, the director of the ADOT Office of P3 Initiatives and International Affairs, stated that the proposal included a pre-development agreement which was determined not to work for the Loop 202 because it was too far along in the process.

The plan is still in place to seek out a P3 as a funding alternative for the project. ADOT will likely put out a Request for Proposals (RFP), after which the proposals would be solicited, as opposed to unsolicited as was the last one. Lewis stated,
"The RFP would not be done until after the release of the final [Environmental Impact Statement (EIS)] in July, and although we may put out a request for proposals prior to the Record of Decision in October, we would not ask for those proposals to be returned to the agency until after the ROD had been delivered. That would give respondents an opportunity to take all of the findings in the ROD into account when they deliver a proposal, and it would also guarantee that we're not in any way deciding on the outcome of the ROD report; it's actually delivered."

The transcription of the discussion on Loop 202 or "South Mountain Corridor" starts on page 83 of the Agenda for the upcoming April 11 meeting in Marana, AZ. http://aztransportationboard.gov/downloads/2014-041114_agenda.pdf

The timing of the EIS, as well as that of the ROD, which comes from the federal government, are estimates. In addition, it was acknowledged that the EIS would likely be challenged.  

An industry forum and P3 briefing was held as part of a request for information on February 27, 2014. The presentation document did not clearly indicate that the unsolicited proposal had been rejected. It had been certain from the start that other proposals would be sought and this was a continuation of that process.

It was clear, however, from that presentation, that the concerns presented in "Companies seek partnership with ADOT to profit on freeway, Part 2: The Methods" were on the mark and are still relevant. Page twenty shows that they prepared a Draft TIFIA Letter of Interest, and on the following page, they list availability payments as an option for funding.

The unsolicited proposal was submitted in February 2013 by the South Mountain Development Group. The proposal was technically unsolicited but red flags were raised by the longstanding relationships between public (such as ADOT) and private interests, and their pro-P3 organizations, as explored in "Companies seek partnership with ADOT to profit on freeway, Part1: The Networks". Most of the concerns laid out in that two-part article remain largely the same, aside from the fact that the specific companies such as Sundt and Kiewit may not be the ones involved in a future P3. Representatives of these companies and several others attended the Industry Forum in February. A list of attendees can be seen here. This list includes representatives of AECOM, a large company who has interest and involvement in P3s and the Sun Corridor.

Tuesday, March 11, 2014

ADOT meeting this Friday, Phoenix

Sharing this call:

TELL ADOT NO SOUTH MOUNTAIN FREEWAY
ADOT transportation board meeting is this Friday! March 14 at 9 a.m. during the Public hearing for the Five Year Tentative Program, you can leave comments opposing the proposed freeway March 14th, 2014 Rally at 8:00 AM to 12:00 PM ADOT Auditorium, 206 S. 17th Ave Phoenix, AZ


Join us outside their meeting to protest the South Mountain freeway! ADOT needs to know that our lands are not theirs to take!

 

Tuesday, March 4, 2014

I-11 Comment period extended to March 7

from the ADOT website:

Comment period extended for I-11 and Intermountain West Corridor Study

Community members have until March 7 to comment online about Level 2 Analysis
March 03, 2014
PHOENIX – The Arizona and Nevada departments of transportation have extended the date for providing online feedback on the latest Interstate 11 and Intermountain West Corridor Study results.
Those interested in providing feedback on the Level 2 Analysis now have one more week to do so. The comment period on this particular analysis will close on March 7. So far, the study team has received more than 700 comments about the Level 2 Analysis, which was recently completed by the study team. Those interested in providing input will be able to view a narrated presentation about the current status of the study and then submit comments online.
While online feedback for this phase of the study is being accepted for one more week at i11study.com, general comments about the I-11 study can be submitted at any time via the project website on the “Get Involved” page.
The two transportation departments have been working together since the summer of 2012 on the Interstate 11 and Intermountain West Corridor Study, which includes detailed corridor planning of an interstate link between the Phoenix and Las Vegas metropolitan areas, and an extension of the corridor that would run through southern Arizona to Mexico and north through Nevada toward Canada.
Since last fall, the study team has explored the universe of alternatives for potential routes from Mexico to northern Nevada. That broad range of possible corridor alternatives underwent an initial evaluation and screening process by the study team in October. An additional level of analysis — the Level 2 Analysis — was recently conducted for the Phoenix to Las Vegas segment of the corridor. The current online feedback opportunity allows the public to view the results of this recent analysis and provide feedback prior to the study moving forward. Those interested in participating should visit the project website at i11study.com.  
The Interstate 11 and Intermountain West Corridor Study is a two‐year, multiphase, high‐level study examining the feasibility, benefits, opportunities and constraints of a proposed new interstate highway corridor. This initial study is expected to be completed later this year. Funding to construct a potential corridor has not been identified. In addition to the Arizona and Nevada departments of transportation, the Maricopa Association of Governments, Regional Transportation Commission of Southern Nevada, Federal Highway Administration and Federal Railroad Administration are partners in this study.
For more information about the I‐11 and Intermountain West Corridor Study and to sign up for updates, visit i11study.com.

Tuesday, February 11, 2014

Interstate 11 comment period starts

This went out in an email from ADOT today:

Arizona and Nevada announce opportunity to provide feedback on the Interstate 11 and Intermountain West Corridor Study
Public can comment online in February about Level 2 Analysis
The Arizona and Nevada departments of transportation are hosting an online opportunity through the month of February for anyone interested in providing feedback on the latest Interstate 11 and Intermountain West Corridor Study results.
Today a public feedback period is being launched at www.i11study.com to provide an opportunity to comment on the Level 2 Analysis, which was recently completed by the study team. Those interested in providing input will be able to view a narrated presentation about the current status of the study and then submit comments online.
The two transportation departments have been working together since the summer of 2012 on the Interstate 11 and Intermountain West Corridor Study, which includes detailed corridor planning of a possible interstate link between the Phoenix and Las Vegas metropolitan areas, along with high-level visioning for potentially extending the corridor north to Canada and south to Mexico. Congress designated the future I-11 corridor between Phoenix and Las Vegas as part of the latest surface transportation bill, Moving Ahead for Progress in the 21st Century Act (MAP-21).
Since last fall, the study team has explored the universe of alternatives for potential routes from Mexico to northern Nevada. That broad range of possible corridor alternatives underwent an initial evaluation and screening process by the study team in October. An additional level of analysis — the Level 2 Analysis — was recently conducted for the congressionally designated portion of the corridor that would connect Phoenix and Las Vegas. This month’s online feedback opportunity will allow the public to view the results of this recent analysis and provide feedback prior to the study moving forward. Those interested in participating should visit the project website at www.i11study.com.
Online feedback for this phase of the study is being accepted through the end of February. However, comments about the I-11 study can be submitted at any time via the project website on the “Get Involved” page.
The Interstate 11 and Intermountain West Corridor Study is a two‐year, multiphase, high‐level study examining the feasibility, benefits, opportunities and constraints of a proposed new interstate highway corridor. This initial study is expected to be completed later this year. Funding to construct a potential corridor has not been identified. In addition to the Arizona and Nevada departments of transportation, the Maricopa Association of Governments, Regional Transportation Commission of Southern Nevada, Federal Highway Administration and Federal Railroad Administration are partners in this study.
For more information about the I‐11 and Intermountain West Corridor Study and to sign up for updates, visit www.i11study.com.

Sierra Vista ADOT meeting flier


Sunday, February 9, 2014

Upcoming Meetings

For your reference:

2/14 ADOT State Transportation Board Meeting, 9am, 2nd Floor Council Chambers, 1001 N Coronado Drive, Sierra Vista, 85635 (more info)
2/27 ADOT Industry Forum on Loop 202, 10am-12pm, ADOT Auditorium, 206 S. 17th Ave. in Phoenix  (more info)
3/13 ADOT State Transportation Board Meeting, time and place TBA (more info)
3/18 CTOC, 4pm, Maricopa Association of Governments (MAG), 302 N 1st Avenue, #300 Phoenix, Arizona 85003 (more info)

Tuesday, February 4, 2014

Update on South Mountain Freeway P3

The following was just recently posted to the ADOT website:

South Mountain Freeway Public-Private Partnership Concept Advances
‘Request for Information’ next step for public-private partnership proposa [sic]
The Arizona Department of Transportation has released a Request for Information related to the proposal to construct the South Mountain Freeway as a public-private partnership, if the freeway is approved through the ongoing federal environmental process. Those with an interest in the public-private partnership proposal are encouraged to submit comments to ADOT’s Office of P3 Initiatives by February 25.
The purpose of this Request for Information is to seek the industry’s perspective and feedback on specific questions, and to provide an opportunity for industry input on the overall procurement process for the proposed project. Interested organizations and individuals are encouraged to submit responses with detailed comments. The information contained in the responses to this Request for Information will help ADOT advance planning and development efforts for the project; help confirm or refine ADOT’s project procurement, financing and delivery approach; and may result in the launch of a formal Request for Proposals.
This Request for Information is the next step for the unsolicited public-private partnership proposal submitted to ADOT in 2013 – the first unsolicited proposal for a highway public-private partnership submitted to the agency. Under state law, ADOT is required to conduct a review of the proposal before deciding if the concept merits an open solicitation for other companies to submit competitive proposals.
The South Mountain Freeway remains a corridor under study, and this public-private partnership proposal has no impact on the ongoing environmental impact statement that is scheduled to be finalized in 2014. The environmental impact statement must be completed and acceptable to the Federal Highway Administration regardless of how the proposed project is funded or constructed.

Monday, January 20, 2014

PARC Events

from http://us3.campaign-archive2.com/?u=a13f48544fd2a55bb52091f23&id=842b8c3796&e=0cdf3ea384

Hike with us – for the Love of South Mountain

When: Saturday, February 8th, 8:00am

Where: Starting at the Telegraph Pass trailhead (Desert Foothills Pkwy & 7th St, north of Chandler Blvd)

Parking: Desert Foothills Park (on SW Marketplace, just west of Desert Foothills Pkwy and just south of Chandler Blvd)

Shuttle Service: Desert Foothills Park to and from trailheads

Why: Fundraiser for PARC because we want to save South Mountain

Donation (get a “Save Ahwatukee” T-shirt):

  • $20 Individual (1 T-shirt)
  • $30 Couple (2 T-shirts)
  • $40 Family (4 T-shirts)
Registration: Prepay donations on our website, include “hike” along with T-shirt size(s) in the description

Amenities: Restrooms – yes; Water – yes; Food - no

If you like to hike, this is for you. Hikers will start at the Telegraph Pass trailhead, then proceed at their own pace and hike their own distance. The main hike will go up the Telegraph Pass trail, follow the National Trail west, and then come down the Pyramid Trail to end at the 19th Ave and Chandler Blvd trailhead. Hikers who wish something a little less strenuous can come back down the Telegraph Pass trail.

Be sure to bring water! Try to be parked at Desert Foothills Park by 7:45am so we can get you to the trailhead for the 8:00 start time.

You will hike at your own risk, but PARC volunteers will be around to provide any assistance needed. We will provide shuttle service and water, and we will not leave anyone on the mountain.

Walk with us – to Save Pecos Road

When: Saturday, March 1st, check-in at 8:00am – event starts at 9:00am

Where: Park ‘n’ Ride on Pecos Road at 40th Street

Why: Fundraiser for PARC because we want to save Pecos Road

Partner: PARC is co-sponsoring this 5K inter-generational walk with the Arizona Senior Olympics (ASO)

Registration: Pre-registration up to February 26th on-line at seniorgames.org (select event “Walk to Save Pecos”) or register on-site

Fee: $15 for 18 and over, $12 for 10-17 year olds, includes an ASO T-shirt

Entry Requirements:

  1. Each person must register as an individual
  2. Children must be at least 10 years old to participate
  3. Check-in prior to the event is required
Amenities: Restrooms – yes; Water – yes; Food - no

If you like to walk, come and join us to help save Pecos Road. This will be a 5K walk, not a race. It will be at your own pace so you can enjoy the surroundings and contemplate on what Ahwatukee would be like without Pecos Road.

Pecos Road is just as important to the ASO as it is to residents of Ahwatukee. Each year the ASO has biking and running events for senior athletes that use Pecos Road as the venue. There is no more suitable venue in the Phoenix area.

When the ASO asked PARC to join with them in sponsoring an inter-generational (age 10 and up) walking event on Pecos Road, we jumped at the chance. Pecos Road is important to all of us, and what better way to make that point to the community than while raising some funds to fight against replacing Pecos with a freeway.

As co-sponsors of this walking event, all entry fees will go to the ASO, while all sponsor money collected will go to PARC. So it will be very important for PARC if you could get sponsors to donate something for every kilometer you walk. Every little bit helps.

PARC will have a booth at the Pecos Park ‘n’ Ride where participants will be able to talk with us and/or purchase PARC “Save Ahwatukee” T-shirts and “Save South Mountain” bumper stickers. PARC will also be assisting with on-site registration, distribution of water to participants, etc.

Please join us – and remember to get sponsors!

Plunder Road: CANAMEX and the Emerging Impact of NAFTA, TPP on Western North America

from http://chaparralrespectsnoborders.blogspot.com/2014/01/plunder-road-canamex-and-emerging.html

As people across the world honor the twentieth anniversary of the Zapatista Liberation Army rising up in response to the implementation of the North American Free Trade Agreement (NAFTA), resistance continues, most notably against resource extraction and other infrastructure. Meanwhile, what some call “NAFTA on steroids,” the Trans-Pacific Partnership (TPP) is currently pending agreement involving the North American countries and others scattered around the Pacific. And rather quietly, a transportation project called the CANAMEX Corridor is underway to facilitate trade along a north-south corridor of western North America. This corridor runs from a port on the Pacific coast of Mexico, through Arizona, Nevada, Utah, Idaho, Montana, and north near the Tar Sands in Alberta, Canada.

Opposition to the CANAMEX Corridor is necessary not only because it is a major piece of the physical infrastructure needed to facilitate this trade. Its function in international trade is also used to justify the damage brought by its imposition locally, throughout the corridor. CANAMEX, designated as a High Priority Corridor shortly after NAFTA was implemented, already exists in the form of highways, but requires improvement and expansion to effectively facilitate trade.

The trade corridors of North America, CANAMEX being one of them, are extensions of NAFTA. They function as the infrastructure, such as roads, rail, ports, etc., that perpetuates the harms caused by so-called free trade. Among the effects of NAFTA since its implementation have been dramatic unemployment and displacement in Mexico due to subsidized US agricultural products such as corn, and a shift in privatization/ownership of Mexican land by private interests. One of the worst environmentally damaging projects in the world is the Tar Sands extraction in Alberta, Canada, which is in operation at its current level largely due to the NAFTA obligations to supply oil to the US. CANAMEX would also be an important corridor of TPP trade due to its Pacific seaport in Guaymas, Mexico, and its proximity to the west coast in general.

The impact of CANAMEX involves displacement of people and destruction of sacred sites and the environment, thereby affecting indigenous communities and various others. Trade transportation infrastructure is necessary for free movement of goods across borders, but along with it must come heightened border security in response to displacement caused by the impacts of trade agreements. Because it requires fuel, trade infrastructure is one of the primary reasons for resource extraction and is an extension of colonialism. Additionally, it is justified and imposed locally in the form of development and sprawl with compounded reliance on energy and resources such as water.

A project increasingly being used to circumvent the obstacle of lack of funding for these trade corridors is called a public-private partnership (P3), which is an arrangement that is essentially privatization but with some state control. Having been utilized throughout the world, P3s in North America seem now more than ever to go hand-in-hand with trade infrastructure development and neoliberalism in general.

In simple terms, neoliberalism involves trade liberalization, privatization, and relaxation of state power in effort to allow for a free market economy. It is important to frame opposition to the practice of neoliberalism and its trade pacts, privatization, etc., by foremost addressing state collusion and repression, in addition to its form as an extension of colonialism and capitalism. State repression against resistance makes possible the ease with which these colonial/neoliberal projects expand.

Read more...

Thursday, January 16, 2014

Upcoming Meetings

ADOT's State Transportation Board just posted their agenda for January 17 (tomorrow) and they're going to talk about loop 202 extension and the possible P3.  The meeting is Prescott.  There's a meeting February 14th in Sierra Vista and a meeting in Phoenix on March 14th.

From the agenda: Update on the Proposed South Mountain Corridor Alternative Delivery Options Staff will provide an update on the alternative delivery options under consideration for the proposed South Mountain Corridor, to include the possible Public Private Partnership (P3) option. (For information and discussion only–Gail Lewis, Assistant Director, Office of P3 Initiatives)

http://www.azdot.gov/docs/default-source/about/011714-agenda.pdf?sfvrsn=2
http://www.azdot.gov/about/boards-and-committees/StateTransportationBoard/meeting-schedule

Also, I received this email announcement, but it does not appear that the agenda has yet been posted.
First CTOC meeting of 2014 is Tuesday
The Citizens’ Transportation Oversight Committee (CTOC) meeting will be held at 4 p.m. Tuesday, Jan. 21, in the Arizona Department of Transportation auditorium at 206 S. 17th Avenue, in Phoenix.
Agenda items include an update from the Maricopa Association of Governments regarding program changes and ongoing studies; a look at plans for the future, current funding challenges and how transportation impacts the economy; and an update on current Maricopa County construction projects, both from ADOT.
To view all agenda items, click here and for information about CTOC, please visit www.azdot.gov/CTOC.

Monday, January 13, 2014

CANAMEX and Loop 202

I found something I had initially overlooked during my extensive research on CANAMEX, that relates specifically to the Loop 202.  In "Highway to Hell?" I wrote that the South Mountain Free way Extension, aka Loop 202 was not part of the official CANAMEX route, but would facilitate some of this traffic either way.  Other opponents of the Loop 202, such as folks who are part of Protect Arizona's Resources and Children (PARC) have pointed out that the extension's purpose is as a truck bypass.

As you can see in this map, Loop 202 was suggested as an option for CANAMEX and is clearly within the general path of CANAMEX.  I found this interesting, and so I'm sharing it with you.  This is one map overlaying another.  The thicker blue lines are part of a map of possibly routes for CANAMEX proposed by Kimley Horn & Associates, Inc. in a document called "Final Report" prepared for ADOT in 2000.  Over it, I placed the map of possible routes for the Pecos Road alignment.  As you can see they're pretty similar because ADOT had been planning for Loop 2002 for a while.



The following is from http://kjzz.org/content/944/gila-river-indian-community-rejects-loop-202-expansion-route:
In the final report, this is the blurb on the Loop 202:
I wrote the following in "Highway to Hell?":
ADOT claims, “the CANAMEX corridor in Maricopa County takes trucks from I-10 south of the Valley across I-8 to State Route 85, avoiding the metro-Phoenix area.” This information, however, doesn’t match other details on CANAMEX’s route through Arizona.
Although over time, the routes included in maps of the CANAMEX Corridor have changed slightly, ADOT’s information has to do with the route they recommended in a Resolution in 2001 (Source). Back then, there had been no good news for at least seven years that funding would be available for the Loop 202 extension (Source). At this point their information seems especially, and perhaps intentionally, out-of-date.
 In some ways it doesn't matter whether it's part of the official CANAMEX Corridor route or not.  What does matter is if it's being pushed because it will serve the purpose of the trade corridor, in addition to whether it does act as a truck bypass bringing with it the additional pollution and risks.  This is something to keep an eye on.

Thursday, December 5, 2013

The Sprawling Sun Corridor


One of the main complaints by Phoenix-area residents is the problem of sprawl.  Yet a number of projects are counting on and encouraging continuing development in the coming decades.  The "Sun Corridor" is the name given to the area encompassing Phoenix and Tucson, often including Prescott and perhaps south to Nogales.  It is the term given to this concept of a megapolitan region or megalopolis characterized by large population and the economic merging of more than one city.  It is also part of the CANAMEX trade corridor that acts as one of several NAFTA freeways connecting Canada with Mexico.

Recently, news has come out about an international trade center called "PhoenixMart" in Casa Grande, an international airpark in Goodyear including a foreign trade zone, and the experimental fallowing of Yuma farmlands in effort to ensure water supply for the Sun Corridor sprawl.  Meanwhile, the port of Guaymas, an important trade hub for CANAMEX will possibly double in the next few years.

Environmental and health concerns, threats to sacred sites integral to indigenous survival, displacement of people from their homes, are among the reasons people oppose increased development.  If it's not the people of Arizona who want development, then who is it?  People who stand to profit in one way or another seek to make connections with government to push their agenda through various organizations and conferences.  Private interests have the means to impact prioritization and placement of transportation infrastructure.


PhoenixMart 

In "PhoenixMart seen as catalyst" Melissa St. Aude writes,
Casa Grande could someday be the epicenter of a sprawling Sun Corridor megalopolis, spanning from Tucson to Phoenix.  That was the vision given Friday by PhoenixMart Chief Executive Officer Steve Betts and AZ Sourcing President Jeremy Schoenfelder...
At the center of the megalopolis would be PhoenixMart, a nearly 2-million-square-foot sourcing center with 1,750 manufacturer showroom suites, attracting wholesale buyers from around the world and triggering development of various spin-off businesses ranging from hotels, restaurants and warehouses to other services.1 
KJZZ reports, "In November, AZ Sourcing is set to start building PhoenixMart...  About one third of those vendors are expected to be foreign companies."2 They did break ground in early November.

PhoenixMart promoters describe their reasons for choosing Casa Grande as having to do with the Sun Corridor and its increased population growth between Phoenix and Tucson, and its position as part of CANAMEX and other trade corridors.  They're also hoping for an "inland port" involving proximity to one or more Foreign Trade Zones (FTZ) and increased rail infrastructure.  FTZs and other such zones are being increasingly created to provide incentives to big companies to do business in those areas, allowing them to avoid paying certain taxes and fees.

The Interstate 11, recently designated as such by Congress, intending to connect Phoenix with Las Vegas and serving as an important leg of the CANAMEX Corridor, will actually reach as far south as Casa Grande (and perhaps beyond).  Robert Jackson, the mayor of Casa Grande, is a vice president of the Interstate 11 Coalition, and seems to be acting as a spokesperson for PhoenixMart.  He also is a board member of the Highway Expansion Loan Program (HELP), described as "the ADOT advisory board that oversees a comprehensive loan and financial assistance program for eligible highway projects in Arizona."3   Jackson spoke at last month's Public Private Partnership (PPP) Task Force Meeting.  "Mayor Jackson will speak about PhoenixMart and the 5 year federal funding process of the project. He will also speak to other Public Private Partnerships in Casa Grande such as the Francisco Grande. He will do a general update on Casa Grande and talk about his role in the Pinal County Partnership."4  Pinal Partnership's mission is to "Improve research, planning and coordination of private and public efforts related to infrastructure, natural resources and community development in Pinal County."  This is clearly a proponent of public-private partnerships and involves many members associated with P3s.5  (See http://stopcanamex.blogspot.com/2013/08/companies-seek-partnership-with-azdot.html for more on the relevance of public-private partnerships).  Although less relevant since he has since moved on, it was interesting that Steve Betts, former CEO of PhoenixMart, chairs the Interstate 11 Coalition in addition to chairing the Governance Committee for the Urban Land Institute Az District Council, a proponent of public-private partnerships (P3s or PPP).

The federal funding referred to is likely the EB5 funding which PhoenixMart recently qualified for.  It is not direct funding from the federal government, but an incentive to foreign investors.  "Foreign businessmen and women, through this program, are allotted a U.S. green card after providing a substantial investment (ranging from $500,000 to $1 million) in United States commerce that creates or preserves approximately 10 jobs for U.S. workers in economically repressed areas. The green card encompasses the investor, and dependents (spouse and children under 18), and gives them a U.S. residency approval for two years."6    Another example of how money talks in Arizona.

Goodyear AirPark

A business park is slated for development near the Phoenix Goodyear Airport in Goodyear, a town south-west of Phoenix.  Its proximity to the proposed Loop 202 extension could be important since many opponents of the freeway have pointed out the likelihood of it being used as a truck bypass.  Certainly business ventures such as this airpark would like to make freight traffic easier near their location.  In addition, their Foreign Trade Zone status reinforces the assertions that many have made that transportation projects prioritize trade traffic over local traffic.  The proximity of Interstate 11 might also be significant.
The Foreign Trade Zone capability sweetens the site for users involved with importing goods into the U.S. The variable zoning potential for the site permits flex buildings, offices, logistics and manufacturing. The FTZ takes 75 percent off property tax bills when buildings are moved under the zone’s umbrella.
Goodyear Airpark will sit on the I-10 traffic reliever. When developed, the parkway is to connect the interstate highway to the Loop 202 South Mountain Freeway.7 

Farmland-Fallowing

In a few months, an experiment will begin as part of an attempted solution to the water issue related to this Sun Corridor sprawl.  "Since state law requires communities to prove that they have an 'assured supply' of water, the [Central Arizona Groundwater Replenishment District (CAGRD)] — by moving water around the region — makes available what nature does not."
"In addition to the fallowing program, the CAGRD has leased water from the White Mountain Apache tribe."8 

The report explains,
A pilot farmland-fallowing project — which will begin in January 2014 — will pay farmers not to grow crops, thus freeing up water that could be transferred to cities in the Sun Corridor, a metropolitan region centered on Phoenix, where the population could increase 50 percent by 2040 to 9 million residents, according to researchers at Arizona State University.9 
Presumably, the ASU researchers referred to here are part of the Morrison Institute.10  It is likely that the popularity of the term "Sun Corridor" is owed to the Morrison Institute and its reports, primarily authored by Grady Gammage Jr.  The problem is that these reports are not just observations on population and economic trends.  There is a specific interest in the success of this sprawling growth.  For example, Gammage Jr.'s ASU webpage describes him as “a sometime real estate developer” and states, "As a lawyer, he has represented real estate projects ranging from master-planned communities to sprawling subdivisions to high rise buildings and intense urban mixed use redevelopment."11  In the past, his avoidance of conflicts of interest has been questionable.  Regarding a past issue it was said that, “His dual roles were never disclosed to the public, so the report's readers had no idea that the author developing scenarios for selling off state-owned property was also working with a developer who was seeking to buy some of that very same property.”12 

Gammage Jr., among others, has acknowledged that things have changed since the Sun Corridor report predicted massive growth.  Last month, the Eloy Enterprise reported that,
"Experts predicted that by 2040, the megapolitan region would have a population of between 10 and 15 million people. Then the housing bubble burst and those figures were scaled back. The counties of Maricopa, Pinal and Pima combined are now projected to have 8.5 million residents by 2040.

'I say it’s going to happen, but it’s going to be slower than what was expected,' said Jim Dinkle, executive director of the Central Arizona Regional Economic Development Foundation. 'I’ve always said, in 20 years I think this will be a megalopolis where Tucson and Phoenix are connected and we are right between them. I think it will be built out in both directions.'"13
This farm-fallowing experiment and lease of water from the indigenous communities is only one piece of the larger picture concerning southwest water concerns.  Water issues in Arizona are rather complicated and volatile, and will be increasingly important.  Recent hearings on proposals to address the pollution caused by the Navajo Generating Station, a coal plant that powers movement of water through the Central Arizona Project to get it to Phoenix, illuminated the ongoing, if not worsening, issue of Phoenix's reliance on water.
"For decades this plant has emitted massive amounts of preventable pollution into the skies above our national parks like the Grand Canyon, Petrified Forest and Mesa Verde, as well as into the lungs of hundreds of thousands of local residents and visitors to these magnificent places,” said the Arizona Program Manager for the National Parks Conservation Association, Kevin Dahl, in a statement on November 11. “The pollution from this plant must be substantially reduced as soon as possible, for the sake of our lungs and our parks.”14
The prevention proposed by the EPA could cost over a billion dollars15 but what is the cost of allowing the pollution to continue?  If it's already this bad, why encourage more growth? Those with interests to develop the Sun Corridor region tend to be aware of water issues and will probably seek ways to make their efforts "greener".

Port of Guaymas

On a larger scale, the Port of Guaymas in Mexico, often said to be an end point of CANAMEX, is likely to grow in relation to the trade infrastructure that feeds it.  The Arizona Daily Star recently reported,
A multimillion-dollar investment to more than double the capacity of its deep-water seaport is underway, and within two years an additional nine docks are to be built to support ocean vessels hauling everything from coal and grain to durable goods and automobiles... Making the Guaymas port an alternative to the crowded ports in California could be a boon for Arizona, whose border is just 260 miles north. Arizona could serve as an entry point for imports, and local suppliers could benefit by being part of the manufacturing supply chain.16  
Nearby in Empalme is a trade zone and rail that leads to Arizona.  Likely, goods which will mostly come from Asia, we can assume, will be transported to foreign trade zones (FTZs) in Arizona.

Despite the promise of local jobs that pro-development hucksters keep hyping, the trade economy (which CANAMEX would extend) continues the trend of out-sourcing jobs to places where goods can be produced more cheaply, such as Mexico and China.  Trade infrastructure is not a solution to the problems locally, they are just ways for rich people to continue to make money.




1 http://www.trivalleycentral.com/florence_reminder_blade_tribune/news/phoenixmart-seen-as-catalyst/article_8e83db5c-262d-11e3-84b1-001a4bcf887a.html
2 http://kjzz.org/content/7692/valley-developer-build-international-trade-center
3 http://www.interstate11.org/officers.aspx
4 http://www.ace4aec.com/meeting/public-private-partnership-ppp-task-force-meeting-09172013
5 http://pinalpartnership.com/about.html
6 http://www.trivalleycentral.com/eloy_enterprise/news/phoenixmart-waits-on-funding/article_cad5e696-ad23-11e2-a9af-001a4bcf887a.html
7 http://nreionline.com/nreiwire/press-release-lincoln-property-company-and-carefree-partners-engage-jll-267-acre-goodyear-i
8 http://www.circleofblue.org/waternews/2013/world/fallowing-farmland-new-card-arizonas-water-shuffle/
9 http://www.circleofblue.org/waternews/2013/world/fallowing-farmland-new-card-arizonas-water-shuffle/
10 https://morrisoninstitute.asu.edu/media/news-events/gammage-sun-corridor-population-projection-9m-by-2040 and http://morrisoninstitute.asu.edu/publications-reports/2011-watering-the-sun-corridor-managing-choices-in-arizonas-megapolitan-area-1
11 http://morrisoninstitute.asu.edu/researchers-and-staff/grady-gammage
12 http://www.hcn.org/issues/41.7/the-growth-machine-is-broken/article_view?b_start:int=2
&-C=
13 http://www.trivalleycentral.com/eloy_enterprise/news/sun-corridor-projections-smaller-but-still-big/article_2ef8c9d8-15b9-11e3-abeb-001a4bcf887a.html
14 http://indiancountrytodaymedianetwork.com/2013/11/13/national-parks-conservation-group-objects-navajo-generating-station-proposal-152238
15 http://www.ahwatukee.com/opinion/article_657e5338-4be7-11e3-abc5-001a4bcf887a.html
16 http://azstarnet.com/business/local/port-of-guaymas-set-to-double-its-capacity-seeks-arizona/article_16947664-811b-56eb-b67a-abf186bac8c7.html
17 FOOTNOTE

Saturday, August 17, 2013

Companies seek partnership with ADOT to profit on freeway, Part 2: The Methods

This is part two of a series.  Please also see, "Companies seek partnership with AZDOT to profit on freeway, Part1: The Networks" at http://stopcanamex.blogspot.com
Disclosure: The author of this piece was unfamiliar with the financial concepts discussed below, prior to researching this specific public-private partnership for the Loop 202 extension.  This is meant to provide a starting place for further examination of these issues.


You're likely wondering, "No tolls?  How are private companies going to make profits fronting the money for a freeway?"  Well, here's what you need to know.  These companies' vast public-private partnership (P3) promoting networks have come up with a number of ways to make profits from joining with the public sector to work on projects that would normally be funded by tax dollars.  But wait- these projects would be funded by our tax dollars anyway, and on top of that, these companies can avoid paying some of their own taxes.  Some recent transportation P3 arrangements include something called "availability payments" which come from our local sales taxes several years down the road, TIFIA funds which are federal loans with lower interest rates than private entities can usually get, and other options such as private activity bonds which the companies don't have to pay taxes on.  This P3 arrangement is actually preferred by companies because they take on less risk than with a toll road since they're not relying on the traffic to pay the tolls; they get paid no matter what, as long as they finish it.

It appears likely that one or more of these "innovative financing solutions" may be part of the proposal put forth by the South Mountain Development Group (SMDG) to build the Loop 202 South Mountain Freeway.  This unsolicited proposal is being sold to us as a way to get the road built more quickly, even though the companies would make a profit from our tax dollars.  Not only are many opposed to the freeway whether or not it would involve a P3, it also may not even qualify for federal funds if it violates federal environmental and civil rights laws.


The South Mountain Development Group (SMDG) is made up of Kiewit Development Co., Kiewit Infrastructure West Co., Sundt Construction Inc. and Parsons Corp.  The way availability payments work is that essentially the companies and the Arizona Department of Transportation (ADOT) would come into an agreement in which SMDG fronts the money and after completing the project, they receive payments from the state years down the road, as they become available (hence the name).  When they say that SMDG would front the money, this means they are likely to put up some of their own money, but most of the funds will come from loans from banks and/or financing such as loans with lower interest rates through federal programs.  In fact the timing of this P3 proposal may have to do with a temporary increase in funding through a federal program called Transportation Infrastructure Finance and Innovation Act (TIFIA), to be discussed below.

The lack of state funds is the primary barrier to completing projects, which is a good thing for the many people who do not want damage done to South Mountain, the surrounding environment, and the community resulting from the proposed Loop 202 extension, aka the South Mountain Freeway.  With private interests putting up the funding, the construction could start that much sooner.  The companies' interests in profit may also impact our ability to oppose it.


Availability Payments

The limited information about the arrangement for this P3 can be found in various news articles. According to an Arizona Republic editorial, SMDG, "offered to front the money and design and build the freeway, with the state paying them back later."1  Another AZ Central article provided a bit more information on this sales tax. "Because much of the project is funded by Maricopa County’s voter-backed, half-cent-per-dollar sales tax, the South Mountain Freeway has a dedicated stream of revenue that takes uncertainty away from would-be private financiers."2

The availability payments, it appears, would likely come from the Maricopa County Regional Area Road Fund into which the Arizona Transportation Excise Tax is deposited.  The sales tax extends through the end of 2025.3 

This would not be Kiewit's first transportation project that involves availability payments on a non-toll road, and as the nation's third largest contractor, this definitely wouldn't be their first P3.  Kiewit is part of the construction of San Francisco's new Presidio Parkway P3 project. "No tolls will be collected. Instead, the legislature has agreed to annually appropriate the availability‐based payments promised to the P3 developer for the 30‐year term of the concession. That money will be used to secure about $300 million in loans to build the project, cover the developer’s profit and pay all operating expenses."4  Other projects in North America with Kiewit as part of the P3 have involved availability payments, often in combination with toll concessions.5  

Another reason to assume that availability payments are part of the SMDG plan is that Kiewit is also directly involved in promoting the availability payments arrangement and P3s as part of the Association for the Improvement of American Infrastructure (AIAI).  "The growing acceptance of the availability-pay model for delivering transportation megaprojects has drawn an alliance of major U.S. and Spanish contractors into the P3 advocacy business. Five builders and investor Star America launched the [AIAI] at a conference in New York this June. Their aim, among other things, is to put a lobbyist in key states to promote all types of P3 models—availability, revenue risk and 63-20 nonprofits."6  Arizona already has what is termed "broad-enabling" P3 legislation which allows for availability payments and unsolicited proposals, which means this is one of a minority of states that are the most lax about P3s.7

Why are these companies increasingly pushing for P3 with availability payments?  In "Highway Robbery: How 'public-private partnerships' extract private profit from public infrastructure projects," Darwin Bondgraham explains further, 
Availability payments are akin to lease payments, whereby the state pays the private developer of a highway to maintain the road for public use. Rather than collecting tolls from drivers who use the route, the state pays the private developer directly from general state revenues collected through a gasoline tax or other taxes...
P3 companies, in short, are now virtually guaranteed returns on their investments. The shift away from tolls and the growing use of availability payments means P3 investors no longer need worry about traffic flows. Guaranteed lease payments, together with the low interest rates of federally subsidized loans and tax-exempt bonds they use to pay for construction, mean sure profits.8
It is the combination of the availability payments and federally subsidized loans that makes these deals work so well for private companies.

TIFIA funds

The primary reason for the timing of this large-scale P3 project is likely the increased access to TIFIA funding.  Last year, Obama signed into law Moving Ahead for Progress in the 21st Century Act (MAP-21) which provides more funding for transportation projects for a limited time. In a section titled "Public-Private Partnerships," a MAP-21 Analysis report summarized, "MAP-21 makes strategic investments to attract private sector resources to transportation improvements. Specifically, it increases funding for the Transportation Infrastructure Finance and Innovation Act (TIFIA) program from $122 million per year to $750 million in FY 2013 and $1 billion in FY 2014. The measure also increases the maximum potential TIFIA share of total project cost from 33 percent to 49 percent."9   This report was published by American Road & Transportation Builders Association (ARTBA), whose conference sponsors include HDR (contracted to do the Environmental Impact Statement for Loop 202) and speakers include Gail Lewis of ADOT.

The Loop 202 extension may have caught the eye of SMDG members because USDOT Federal Highway Administration website lists "South Mountain Toll Road" among other examples of illustrative U.S. projects that could be funded with TIFIA.10

Keiwit's construction of the Presidio Parkway in San Francisco was also partly financed by TIFIA loans, but it likely won't be the last.11  The Federal Highway Administration's website explains the appeal, "The new FHWA policy will allow those considering the availability payment public-private partnership (P3) delivery method to count on a level of Federal assistance comparable with that of a traditional public works project. Although San Francisco's Presidio Parkway was the first project in the country to use Federal-aid for availability payments, these new and expanded policy flexibilities will make it easier for other States to follow suit and take advantage of this form of innovative financing."12   

In "Highway Robbery," Bondgraham cautions,
Although P3s are advertised as tapping the power of private capital markets to invest in public infrastructure, the reality is that P3 investors enjoy large public subsidies. For example, private companies building P3 highway projects now routinely expect states to grant them authority to issue qualified private activity bonds (PABs). Unlike most lending in private capital markets, interest payments on PABs are exempt from federal taxes (because the cash proceeds are expected to be put to use building goods with broad public utility, rather than projects that solely benefit private parties). Since the bonds are not taxed, they allow the borrower to obtain cash at less cost. This form of financing, then, is essentially a tax cut for the investment banks and corporations with the P3 contract. The U.S. Department of Transportation also routinely grants Transportation Infrastructure Finance and Innovation Act (TIFIA) loans to P3 developers. TIFIA loans provide companies with much cheaper interest rates and more flexible terms than anything available in the private capital markets—again because the public subsidizes them.13  
It will be interesting if HDR comes out with a competing bid on the Loop 202 extension P3 since they have directly "consulted frequently to the Federal Highway Administration's Program Office of Transportation Infrastructure Finance and Innovation Act (TIFIA) on risk-based revenue and credit forecasts."14  They have also be involved in projects that have received TIFIA funding.

The Arizona Republic reports that Rick Norment, executive director of the National Council for Public Private Partnerships stated that they, "advise folks to take the low-hanging fruit first." He sees the Loop 202 extension as too risky for ADOT because it is a more difficult project.  However, Gail Lewis, Director of ADOT Office of P3 Initiatives and International Affairs, and Eric Anderson, MAG’s transportation director see it differently because of the new availability payments option. The companies, "know they’ll get paid back, making Loop 202 'low-hanging fruit' in Lewis’ and Anderson’s minds."15


Limitations to their funding strategy

Now, the good news is that if SMDG is counting on access to these TIFIA funds, they are in for an uphill battle to get approved.  As of right now, the EPA does not accept the current DEIS for the Loop 202 South Mountain Freeway extension.16   As it stands, the proposed freeway may not meet National Environmental Policy Act (NEPA) standards, and may violate civil rights as well.  The TIFIA statute requires that "...all projects receiving TIFIA credit assistance must comply with generally applicable Federal laws and regulations, including title VI of the Civil Rights Act of 1964, the National Environmental Policy Act of 1969..."17 

Attorney Howard Shanker outlined the problem in a cover letter regarding comments on the Loop 202 South Mountain Freeway DEIS. "NEPA requires a fully informed decisional process through, in part, the preparation of a DEIS.  The DEIS, however, treats the crucial decision to proceed with a $3 billion tax payers' funded project not as an impending choice to be pondered, but as a foregone conclusion to be rationalized.  The DEIS provides flawed analyses, generalities, heavy-handed self-justifications.  This is a direct violation of applicable law and a gross abuse of the public trust.  No reasoned decision could be made on the basis the DEIS that, for example, improvements to existing highways or arterials would not better serve regional transportation needs; that public transportation alternatives are not viable; or that abandonment of the project is impractical."18 The organization Protecting Arizona's Resources and Children intends to fight for No Build in court if need be.19

Additionally, a Federal Title VI Civil Rights complaint was submitted to ADOT on July 30.  "The civil rights complaint alleges that ADOT violated the civil rights of Native peoples of the Gila River Indian Community by proposing and promoting the South Mountain Loop 202 Freeway that would negatively and disparately impact Gila River Indian Community tribal members by desecrating their sacred South Mountain and causing disparate health impacts."20

At this point it seems that ADOT may issue a call for competing proposals, and we wait to see what happens with the Draft Environmental Impact Statement.  There are various reasons to oppose the project even if it is not a P3, although P3s pose new problems.  We are likely to see more P3 proposals, such as for the Interstate 11 connecting Phoenix with Las Vegas,21 and/or the North/South Corridor22 to facilitate CANAMEX freight traffic.



Thanks to Gila River Against Loop 202 and Darwin Bondgraham for assistance and insight for this series.

For more information: http://stopcanamex.blogspot.com 

1 http://www.azcentral.com/opinions/articles/20130726editorial-hope-from-private-sector.html
2 http://www.azcentral.com/community/ahwatukee/articles/20130725south-mountain-freeway-private-money-plan.html
3 http://www.azdot.gov/Inside_ADOT/FMS/PDF/rarf11.pdf
4 http://db78bc60e308ad8dc7c2-6f6534a35fc09b927eb00e4333a7f4cf.r47.cf2.rackcdn.com/uploaded/t/0e895293_the-role-of-private-investment-in-meeting-us-transportation-infrastructure-needs.pdf
5 http://www.pwfinance.net/document/research_reprints/chart%201%20US-Canada.pdf
6 http://pwfinance.net/
7 http://www.ncsl.org/documents/transportation/PPPTOOLKIT-AppendB.pdf
8 http://www.dollarsandsense.org/archives/2012/1112bondgraham.html
9 http://db78bc60e308ad8dc7c2-6f6534a35fc09b927eb00e4333a7f4cf.r47.cf2.rackcdn.com/uploaded/c/0e895333_currentissuesmap-21analysis.pdf
10 http://www.fhwa.dot.gov/ipd/tifia/technical_resources/federal_credit_policy_paper/appendix_e.htm
11 http://www.fhwa.dot.gov/ipd/project_profiles/ca_presidio.htm
12 http://www.fhwa.dot.gov/ipd/fact_sheets/tifia_availability_payments.htm
13 http://www.dollarsandsense.org/archives/2012/1112bondgraham.html
14 http://www.hdrinc.com/portfolio/traffic-and-revenue-debt-service-projections-and-credit-risk-modeling-for-tifia
15 http://www.azcentral.com/community/ahwatukee/articles/20130725south-mountain-freeway-private-money-plan.html
16 http://www.epa.gov/region09/nepa/letters/az/south-mountain-freeway-deis.pdf
17 http://www.fhwa.dot.gov/ipd/tifia/guidance_applications/program_guide_web.htm#ch3
18 https://docs.google.com/file/d/0B30ItDvVwsixY29tZS1qMDhwZFU/
19 http://azcommunitypress.org/2013/08/08/experts-conclude-that-the-south-mountain-freeway-should-not-be-built/
20 http://4.bp.blogspot.com/-xDFxGfM7Ao4/Uf1AmxQzgJI/AAAAAAAAAKY/hic6p_5dmpg/s640/civil+rights+south+mountain.jpg
21 http://www.azdot.gov/Highways/Projects/Public_Private_Partnerships/pdf/Proposed-Arizona-Interstate-Corridor-Phoenix-Las-Vegas.pdf
22 http://www.azdot.gov/Highways/Projects/Public_Private_Partnerships/PDF/North-South%20Corridor%20Proposed%20Project.pdf/

Tuesday, August 13, 2013

Experts Conclude that the South Mountain Freeway Should Not be Built

From Arizona Community Press
Steve Brittle August 8, 2013 
By Steve Brittle
A coalition of organizations headed up by Protecting Arizona Resources and Children, Inc. (PARC), pooling their resources to stop the proposed South Mountain Freeway, submitted their hundreds of pages of comments and exhibits to ADOT in response to the Draft Environmental Impact Statement (DEIS). This is the first step in bringing the flaws in the ADOT planning and review process to light. The plan is to challenge the South Mountain Freeway in federal court and stop it.
dsc_6989
The comments included those from a variety of health, environmental, demographic and transportation experts and consultants, who focused on the severe air pollution and adverse health impacts the freeway would certainly cause, the noise, property devaluation, risks from accidents involving hazardous materials, environmental justice, and much more.

Read more...

Thursday, August 8, 2013

Companies seek partnership with ADOT to profit on freeway, Part1: The Networks

A late July announcement from the South Mountain Development Group raised eyebrows amongst environmentalist and anti-freeway organizations across Arizona.  A group of three of the largest construction companies in the United Stated has proposed to fund and build the long contested Loop 202 extension through South Mountain.  Among those troubled by the announcement was the Sierra Club, who publicly opposed the freeway as an environmentally destructive project.

“Why did they wait to announce this until the day after the deadline for the comments on the freeway Draft Environmental Impact Statement?” asked Sandy Bahr of the Sierra Club.1 Now that the announcement has been made, the controversial public-private partnership model is likely to gain the attention it deserves. The attention may come a bit too late, however, due to the timing of this July 25th announcement in relation to the Draft Environmental Impact Statement (DEIS) comment period, despite the proposal being submitted a few months ago. Had news of the possibility of privately funded construction come out sooner, this new type of arrangement may have brought more critical comments.

A public-private partnership or P3 (or PPP) is essentially privatization, with perhaps a friendlier face. Projects that would normally be delivered by the state, such as transportation infrastructure like highways, are taken on by private companies. In cases such as this, private companies finance the project, build it, and they often operate and maintain it. Then they get their money back in addition to profits, of course. In a P3, the public sector has more control than in a privatization situation, but it also takes on most of the risk, meaning ultimately the money still comes from the tax payers via the state, even if it's a few decades down the road--especially since tolling is not part of this proposal for the proposed South Mountain extension to the 202.

Arizona has what is considered broad-enabling P3 legislation, which passed in 2009.2 Much effort has been in the works since then to move things in the direction of increased privatization. In fact there is a vast network of P3 promoters who have been pulling strings in Arizona. Unsurprisingly, some of these same P3 promoters are involved in the 202 proposal.

Going by the name South Mountain Development Group, the companies, Kiewit Development Co., Kiewit Infrastructure West Co., Sundt Construction, Inc. and Parsons Corporation submitted an unsolicited proposal to the Arizona Department of Transportation (ADOT) in February to build the Loop 202 extension. "Unsolicited," while technically correct, is a misleading term due to the longstanding relationships between public (such as ADOT) and private interests, and their pro-P3 organizations. You can see the push for P3s coming out of networks such as these:
  •  Sundt sponsored P3 conferences in Phoenix on several occasions, and attending at least one in 2010 was a representative from Kiewit, a representative from HDR (the engineering firm contracted to do the Environmental Impact Statement for Loop 202), and Gail Lewis of the P3 Office for ADOT as speakers.3
  • Kiewit is on the board of a pro-P3 organization called the Association for the Improvement of American Infrastructure (AIAI). According to their website, AIAI "is a non-profit organization formed in the District of Columbia to help shape the direction of the national Public Private Partnership marketplace."4

  • ADOT's John Halikowski is co-chair with Arizona-Mexico Commission's (AMC) Jim Kolbe in the newly founded Arizona organization called the Transportation and Trade Corridor Alliance (TTCA). The TTCA, which includes members of the Arizona Commerce Authority (ACA), was described as "heavily private-sector" by Gail Lewis, Director, ADOT Office of P3 Initiatives and International Affairs. AMC and ACA are also pro-P3 organizations with private and public membership.5 

  • Also a member of the TTCA, as well as the ACA, is Mary Peters, former Federal Highway Administrator for the U.S. Department of Transportation. She is also on the board of HDR. Participating with her in ACA is Doug Pruitt, former CEO of Sundt. 

  • A consulting firm, Tom Warne & Associates, lists Kiewit, Parsons, ADOT, HDR, and others as clients.6  Tom Warne writes a newsletter that regularly discusses P3s.  He was awarded as a the American Road & Transportation Builders Association (ARTBA) P3 Division Entrepreneur of the Year.  Mary Peters also won this award.7

  • HDR is a 2013 sponsor of the ARTBA Conference, at which Gail Lewis of ADOT recently spoke.  According to their website, "ARTBA approached the National Conference of State Legislatures (NCSL) to develop a toolkit to help educate lawmakers navigate the challenges of enacting and improving P3 enabling statutes."8

And there are yet more webs to untangle. The timing of the announcement of this new P3 may be related to HDR's involvement. HDR is the corporation that the Arizona Department of Transportation (ADOT) contracted to do the DEIS. HDR is an engineering and consulting firm which also happens to be a major proponent of P3s, claiming 35 years of experience delivering P3s and offering their expertise to others through their consulting services.9  HDR is part of The Transportation Transformation Group which "is an unprecedented alliance of state government, finance, academic and private industry leaders who aspire to transform American transportation policy into a goal-based arrangement that maximizes flexibility to enhance the roles of the state and local public sectors and their private partners to solve the growing problems of congestion and mobility." This group includes a variety of notorious financial institutions like Goldman Sachs, Citi, JP Morgan, etc.10

While ADOT has many consultants, HDR is likely to be a highly influential one. It is unclear whether it is the consultant referred to in the minutes of ADOT's Citizen's Transportation Oversight Committee meeting in 2011, but it certainly could be (Tom Warne and Associates is another possibility). "Gail Lewis, Director, ADOT Office of P3 Initiatives and International Affairs, provided an update concerning P3 projects and processes... ADOT’s Steering Committee has been helpful getting P3 integrated into the process. An outside consultant is helping to formulate, guide, evaluate and negotiate programs as they come forward."11

While there could be a conflict of interest, it is possible that HDR could put in a bid for a P3 to build Loop 202 extension as well. There is at least one other P3 in Colorado for which they put in a bid that Kiewit also put a competing bid in for.12 Alternatively, HDR may not have seen any value in the Loop 202 project, thus why they did such an incompetent job on the EIS.

Opponents of the Loop 202 extension have pointed out that the freeway is intended more as a truck bypass. Few Arizonans have even heard of the CANAMEX Corridor, the NAFTA trade route that runs from Mexico through Arizona and four other states to Alberta, Canada. It utilizes existing roads but in order to fulfill its purpose to move more merchandise between nations, it needs to grow much larger, involving more road construction including the proposed Interstate 11 between Phoenix and Las Vegas. While the Loop 202 isn't part of the current official CANAMEX route, it would certainly serve the freight and commercial truck traffic that comes through Phoenix. Tax payers are less likely to want to pay for something that isn't meant for the local community, particularly if it's done without their knowledge.

Steve Brittle of the local environmental non-profit Don't Waste Arizona, pointed out, among several issues of concern, that, "trucks originating in Mexico will be fueled with diesel that doesn't meet the CARB diesel standards adopted by Arizona over a decade ago. In Mexico, there is no regulation about the sulfur in diesel fuel. In Arizona, the law was changed to allow only diesel fuel to be sold that has had 98% of the sulfur removed." He writes that the state had this information, as well as the stats on how many trucks come in from Mexico. Yet these models of Mexican truck traffic were not considered in air quality models in the DEIS. ADOT and HDR also know that the purpose of the 202 extension is to facilitate trade traffic coming in from Mexico. Why did this not make its way into the DEIS, especially considering HDR's involvement in P3s and trade?

While the population growth projections in the DEIS may have been influenced by the anticipated megapolitan called the Sun Corridor resulting from increased CANAMEX trade, it wouldn't be useful to HDR and ADOT to discuss the negative impacts to health and the environment. Why is it so certain that they know about it? Again, HDR put together this DEIS, with Mary Peters on their board. Mary Peters is well aware of CANAMEX since she was part of the CANAMEX Corridor Coalition as ADOT Director. Tom Warne of the consulting firm for HDR, ADOT, Kiewit, etc. was also in the CANAMEX Corridor Coalition as UDOT Director at the same time.13 Worthy of mention is that Arizona Representative Russell Jones, who introduced P3 legislation, is on the Governor's CANAMEX Task Force and part of the Arizona-Mexico Commission (AMC). AMC is said to be the godfather of CANAMEX by Jim Kolbe, their CANAMEX expert.14

These officials have recently been building their careers on pro-P3 efforts as part of a plan to build trade infrastructure designed to benefit international corporations, not to accomplish goals for the quality of life for the local community. The various companies take an interest in this trade corridor for differing reasons.

The significance of the existing massive network of pro-p3 companies and organizations is that they see tremendous potential for profit so they have built relationships with people in the public sector (politicians and transportation and commerce officials) by providing those officials with the resources they need to accomplish the goals of the P3s. Financial institutions see profit opportunities; the various companies that do the actual design, construction, etc. see dollar signs; and public sector folks see possibilities for career advancement.

Why the Loop 202 South Mountain Freeway and why now? It's likely it has something to do with new federal legislation. "President Obama signed into law the “Moving Ahead for Progress in the 21st Century Act”, or MAP-21, July 6, 2012. It authorizes federal highway and transit investment through September 30, 2014 and provides a historic expansion of the Transportation Infrastructure Finance and Innovation Act (TIFIA) program as well as a number of other important policy reforms."15 Darwin Bondgraham writes, "The U.S. Department of Transportation... routinely grants Transportation Infrastructure Finance and Innovation Act (TIFIA) loans to P3 developers. TIFIA loans provide companies with much cheaper interest rates and more flexible terms than anything available in the private capital markets—again because the public subsidizes them."16  A hypothetical "South Mountain Toll Road" is listed among other examples of possible projects that could be funded with TIFIA, as seen on the USDOT Federal Highway Administration website.17

Private companies are salivating for grants and low interest rates on loans for public projects, but they also intend to get their money back and then some. An arrangement involving something called availability payments is an increasingly common way for P3s to make money for companies. They get paid back by the state after they've completed the project. "The ultimate source of project financing, then, is always the public, either through tolls or taxes. Why then allow private banks, drawing from private capital markets, to serve as intermediaries? Private financing simply permits the insertion of the financial interests of investment banks and private-equity funds into the long-term wealth-producing potential of public infrastructure. By allowing private investors to fund the construction of a project, the state allows these parties to impose their monopolistic claims on future flows of tax or toll revenues" [my emphasis].18 (This will be examined further in Part 2).

In reference to the TTCA, which clearly exists to facilitate CANAMEX infrastructural development, ADOT Director and chair of TTCA, John Halikowski stated, “Our job is not to lead the horse to water. Our job is not to make the horse drink. Our job is to make the horse thirsty.”19 This is a very telling quote that says a lot about the philosophy of at least one high-ranking Arizona transportation official. The citizens of Arizona, the horse in Halikowski's view, are not thirsty for massive transportation infrastructure, yet the goal of the TTCA is to sell us a story that convinces us that this is for our own good. But we see urban sprawl all around us. Empty subdivisions on the fringes of Maricopa County as one example. Arizona is a natural desert that does not need the increased development that private businesses hunger for. There are federal contracts and TIFIA loans that need to be awarded before September 30, 2014 and they are on a deadline, after all.

There are many reasons to oppose this freeway extension.  “The off-reservation alignment would gouge a 40-story high, 200-yard wide cut into South Mountain, which is sacred to all O’odham and Pee-Posh.”20 According to the Gila River Against Loop 202 website, the main concerns are public health, air quality, ground water, loss of land, and desecration of Muhadag Do’ag (aka South Mountain) and other sacred places.21

Opposition to the freeway is strong and justified whether or not it would involve private partners. The issue is whether the pro-P3 entities have the power to push this project, and what the consequences would be. Are the P3 arrangements and CANAMEX something the public knows about or even wants? Would this set a precedent for increasing privatization?


For more information: http://stopcanamex.blogspot.com
Check back for "Companies seek partnership with AZDOT to profit on freeway, Part 2: The Methods" on how the P3 companies will make their money if this is not a toll road.


Thanks to Gila River Against Loop 202 and Darwin Bondgraham for assistance and insight for this series.







Sources:
1 Environmentalists fighting against proposed South Mountain ... - http://www.bizjournals.com/phoenix/news/2013/07/30/environmentalists-fighting-against.html
2 http://www.ncsl.org/issues-research/transport/public-private-partnerships-for-transportation.aspx
3 http://www.ace4aec.com/course/2010-annual-public-private-partnership-conference-10-10-2010
4 http://aiai-infra.info/membership_current.html
5 https://www.azmag.gov/Documents/RC_2012-07-25_MIN.pdf
6 http://www.tomwarne.com/clients/transportation-policy/
7 http://www.artbap3.org/past-award-winners/
8 http://www.ncsl.org/issues-research/transport/public-private-partnerships-for-transportation.aspx/
9 http://www.hdrinc.com/public-private-
10 http://trans2group.com/
11 http://bounced.azdot.gov/ADOT_and/CTOC/PDF/2011/min011811.pdf (p4) CITIZEN’S TRANSPORTATION OVERSIGHT COMMITTEE Arizona Department of Transportation Minutes January 18, 2011
12 http://infrapppworld.com/2013/03/two-final-proposals-submitted-for-us-36-managed-lanes-toll-concession-project.html
13 http://www.westgov.org/wieb/meetings/board1000/briefing/canamex.pdf
14 http://votesmart.org/candidate/biography/28207/russ-jones
15 http://www.artbap3.org/resources/
16 http://www.dollarsandsense.org/archives/2012/1112bondgraham.html
17 http://www.fhwa.dot.gov/ipd/tifia/technical_resources/federal_credit_policy_paper/appendix_e.htm
18 http://www.dollarsandsense.org/archives/2012/1112bondgraham.html
19 Thirst in the Sun Corridor - http://stopcanamex.blogspot.com/2013/06/thirst-in-sun-corridor.html
20 http://nosouthmountainfreeway.wordpress.com/2011/05/23/submit-written-no-build-comments-to-adot-about-the-loop-202/  
21 http://gilariveragainstloop202.wordpress.com/whats-at-stake/