Filling in the I-11/CANAMEX Gaps

Also check out this more recent piece, Interstate 11: NAFTA Trade Corridor from June 21, 2016.

Update: ADOT reported on December 4, 2015 that "The Fixing America’s Surface Transportation Act, or FAST Act, formally designates Interstate 11 throughout Arizona. It states that the I-11 corridor will generally follow Interstate 19 from Nogales to Tucson, Interstate 10 from Tucson to Phoenix, and US 93 from Wickenburg to the Nevada state line. From there, the Interstate 11 corridor extends north through Nevada, and is designated as an interstate highway north of Las Vegas, through Reno, connecting to Interstate 80...
ADOT is beginning work on a Tier 1 Environmental Impact Statement covering the area between Nogales and Wickenburg." More information at ADOT's website.


Fascinating that John Halikowski, Director of Arizona Department of Transportation asked in reference to the future Interstate 11 at a recent meeting, "Is that CANAMEX high-priority corridor still in existence?" (Source, page 21-22). Okay, the director of ADOT, who also is also part of the Arizona-Mexico Commission (AMC) which is said to be the "god father" of CANAMEX, as well as co-chair of the Transportation and Trade Corridor which would appear to have taken over the role of pushing CANAMEX, had to verify if CANAMEX still exists? What does this tell you about how much Arizona decision-makers know about, much less want or need this trade corridor, not to mention the knowledge or desire on the part of the residents? Now, it may be good news that Halikowski doesn't seem to know what's going on, or that CANAMEX is not actively being pushed, but then again, it may just be that the Intermountain West Corridor, confusingly, is the new CANAMEX and the planning is all happening very much behind the scenes.

What we can gather:

• CANAMEX is not dead, but not everyone is on the same page about its relationship to the I-11 and Intermountain West Corridor.
• I-11 was designated in order to make CANAMEX more efficient, although some current transportation decision-makers don't even know about CANAMEX.
• The Intermountain West Corridor seems to be the name for the potential future trade corridor stretching from Mexico to Canada, definitely including the congress-designated I-11 that would connect Las Vegas to Phoenix, but also used interchangeably with I-11 in that I-11 designation may one day include that whole north-south span across the country (See also maps in Figures 1 and 2) and is likely a somewhat different route from that of CANAMEX even though it would serve the same purpose.
• These trade corridors are being pushed on us by largely private interests who seek to profit from NAFTA.

Although imposed on us by the federal government and the North American Free Trade Agreement (NAFTA), with the participation of some locals, CANAMEX is a trade corridor that pretty much already exists in the form of various roadways, although the goal is to make it more efficient. This corridor seems especially relevant considering the tizzy certain southern Arizonans are in over the Interstate 11's lack of connection between Phoenix to the Mexican border (for example, see December 2013 State Transportation Board notes). If CANAMEX already serves the purpose of connecting Canada, the US and Mexico running through Phoenix, Tucson, Nogales, etc, and I-11 is just meant to fill in the missing gap for freight traffic efficiency north of Phoenix, what's the big deal? And why hadn't CANAMEX been brought up throughout much of the I-11 conversation at the State Transportation Board meetings until February? This raises questions about what the status of CANAMEX is and why certain southern-Arizonans wouldn't be satisfied with the existing designation.

In response to Halikowski's inquiry, Scott Omer, Assistant Director of Multimodal Planning Division stated, "Yes, sir, it is. Congress established the high-priority corridors. ...what we would call the CANAMEX corridor was listed as high-priority corridor Number 26 in the federal designation of that. The I-11 designation actually came out of that high-priority designation that Congress had passed. So portions of that is what came up with the designation for -- of I-11 from -- basically from Las Vegas to the City of Phoenix along U.S. 93. The rest of that designation remains intact. It's just not included in the Congressional designation that was passed as part of the MAP-21 legislation" (Source, page 21-22).

If you've been following this blog, you likely read that the I-11 is just meant to facilitate the freight traffic required by the CANAMEX corridor that is inadequate between Phoenix and Las Vegas. Quoted in the past was the Interstate 11 Study website's own words: "... the CANAMEX corridor is composed of a myriad of existing Interstate corridors and state highways, and is not a continuous route due to a gap in the designation between I-10 and US 93. Implementation of the Corridor can fill this gap..." (Source).  You can also see CANAMEX mentioned several times in their timeline.

In previous meeting minutes and transcriptions, some ADOT members seemed dumbfounded at the fact that congress would only designate the I-11 between Phoenix and Las Vegas. During the December 13, 2013 State Transportation Board meeting, a resolution was discussed that requested an expansion of I-11 down to the Mexican border.

Here's one entertaining exchange:

Deanna Beaver: "...I would like just a little clarification... why originally was -- Congress passed the law that the section was just from Nevada to Phoenix as opposed to the full length of the state?"
Floyd Roehrich: "Now, Mr. Flores, Ms. Beaver, I've got to be careful here. I can request Congress, but they have to answer that.  We have no idea. Nobody knew that was in there until it showed up... we'll never get satisfaction from Congress, because I -- I don't know why they put it in there. And we in staff have no -- we're not given justification around Congress's action."
...
Beaver: "Well, it just didn't seem logical to me if the whole thing was a corridor from north south, why they would stop it halfway.
Roehrich: "So you're equating logic with Congress right now?..."
Halikowski: "There were lots of supporters, Mr. Chairman, if you recall the media coverage. It was two big cities, Phoenix and Vegas, that weren't connected. And I think that's what a lot of supporters were focused on..." (Source).

The communication gap may have to do with there being little to no overlap between ADOT and the CAN-DO (Connecting Arizona and Nevada - Delivering Opportunities) a nonprofit corporation, also now known as I-11 Coalition. According to one I-11 Study document (p 12), CAN-DO coalition "leaders played a strong role in lobbying for the designation of this corridor as 'Interstate 11' in MAP‐21."

Arizona Trade Corridor Study, 1993

Those involved in this coalition had a particular interest in addressing the inadequate connection between the two cities. CAN-DO Coalition's president and the executive director have been involved in the Governor's CANAMEX Taskforce and CANAMEX Coalition respectively, these groups very likely also having a role in lobbying congress. Actually, pushers of CANAMEX had identified US 93 as the missing link as far back as 1993 in this Arizona Trade Corridor Study which is the earliest reference to CANAMEX known to this blogger.

Many discussions of the I-11, in the media and in official meetings, omit any reference to CANAMEX but often refer to an international trade corridor reaching from Mexico to Canada. Look at a sampling of media reports on the future interstate and you'll see that I-11 will be referred to as the international trade corridor, or just part of it. Either way, it is clear that the role of the interstate is to facilitate international trade. Since CANAMEX is the trade corridor that already runs through Phoenix and Las Vegas (and through the international borders), however inadequately, it was odd that it had appeared that it wasn't until February 14th State Transportation Board meetings that CANAMEX was actually mentioned during the board's recent discussions on I-11.

Although ADOT Director John Halikowski seemed to not be certain that CANAMEX still existed, prior to asking about it, he stated, "But my understanding is you have two high-priority issues here, corridors. [sic] And the Interstate 11 designation, but let's not forget the Intermountain West Corridor, which is the CANAMEX high-priority corridor, which runs from Nogales up into Phoenix" (Source, p 20). We can take this with a grain of salt since Halikowski does seem rather oblivious, but here he is saying the Intermountain West Corridor is the CANAMEX Corridor.

Also, when he says that CANAMEX runs from Nogales to Phoenix, one can probably assume that he's just referencing that specific portion, not implying that that is the whole stretch. It would appear though, based on how certain people and groups like TREO are responding, that the southern connectivity desired for the I-11 is not fulfilled by this CANAMEX designation, or there's something else to gain (e.g. federal funding) by designating a southern leg officially as the interstate.

The Intermountain West Corridor may be taking the place of CANAMEX, may be somewhat different from the official route, and/or "Interstate 11" might one day be the name for the entire stretch between Canada and Mexico. Discussion of what the I-11 and Intermountain West Corridor is exactly and how it relates to CANAMEX is consistently ambiguous. For one, "Intermountain West Corridor" is nearly always paired with I-11, which would imply that they are related but not one and the same, yet the difference is never explained. Secondly, when CANAMEX is mentioned, there is no clarification as to the difference or relationship between the two (or three), such as on the project background on the interstate 11 study website.

The relationship between CANAMEX and I-11, etc. seems unreasonably vague in this description from the I-11 and Intermountain West Corridor Study "Corridor Justification Report" from August 2013. "The CANAMEX Corridor is designated as an FHWA High Priority Corridor, and a segment of CANAMEX has recently been noted as a 'future Interstate corridor' named as I-11 in MAP-21. Many of the objectives of I-11 and the Intermountain West Corridor are similar to those of CANAMEX, primarily enhancing freight travel and trade between Canada and Mexico; therefore, prior CANAMEX planning should be considered as part of this study." 

Figure 1. From AMC's Catalyst newsletter, winter 2014

An article from summer 2010 reported, "MAG maps now show I-11 running north beyond Las Vegas, up the California-Nevada border and emerging in eastern Washington."
Maps like the one in figure 1 from the Arizona-Mexico Commission's latest newsletter shows two trade corridors, one labled CANAMEX and the other labled I-11. If this is accurate, then the intention seems to be that I-11 would eventually encompass the entire stretch and there would be two separate trade corridors north of Las Vegas. We can probably conclude that "Intermountain West Corridor" is a stand-in term for that trade corridor until I-11 is expanded at which point the terms would be used interchangeably. Another similar map was found in a MAG presentation from December, but these cannot be found in I-11 Study materials. Nowhere else is there any indication that there would be two separate trade corridors north of Las Vegas, but perhaps it is too soon to say and not as relevant to those in Arizona.

The map is likely just a working document. On the FAQ page under "Do you have a map of the proposed route?" it states, "No. It is very early in the study process and alternatives/alignments have not yet been developed. Several previous studies have identified potential alignments for the Corridor or a similar north-south Interstate route (e.g., Hassayampa Freeway and the CANAMEX Corridor). As part of this study, review of prior recommendations will occur, building upon them utilizing new information, to determine suitable alternative alignment options." As accessed on archive.org from 2012, however, the following description from i11study.com site is much more clear about the Intermountain West Corridor, but one must wonder why it has since been removed. "Serving the nation’s north-south transportation needs from Mexico to Canada, the proposed Intermountain West Corridor... is also envisioned to promote possible freight linkages between the new and expanding ports in Mexico and Canada, existing United States West Coast ports, and future inland ports and commerce centers crucial to distributing goods across North America."

This is the understanding reflected in an April 10 Arizona Capitol Times article referring to Interstate 11, "The highway between the two cities is just one segment of the larger Intermountain West Corridor, which could one day be a new interstate route from Mexico to Canada" (Source).

The Intermountain West Corridor is obviously not set in stone. Another very recent article reports that there are seven possible corridors through Nevada.

Nevada and Arizona are nearing the end of a two-year study of plans for I-11 connecting Las Vegas and Phoenix. That project received congressional designation in 2012, and work is expected to begin soon on a highway bypass around Boulder City as an initial phase of construction...
The study, to wrap up in July, covered seven possible I-11 corridors through Nevada and recommended two for further study. Its “most favorable” route follows US 95 north from Las Vegas to Interstate 80, then west to US 395 in Reno and north into California and Oregon.
The study also recommended further analysis of a route that loosely follows the U.S. 95 corridor through the Fernley/Fallon area, than [sic] on to Oregon and Idaho through Winnemucca (Source).

Perhaps all this ambiguity has to do with CANAMEX being in transition. "An update to the concept of CANAMEX is currently underway," states Arizona-Mexico Commission's "Arizona Border Communities Roadmap" from December 2013 (p 42). It would not be surprising if the concept update comes out of the TTCA's strategic roadmap they've been promising for several months, which might be released after this month's steering committee meeting which doesn't seem to be open to the public. It is possible that CANAMEX appears as a separate route in these maps because it is still considered a high-priority trade corridor with its official route until and if it is changed. In other words, the Intermountain West Corridor may replace the CANAMEX Corridor, with whichever route is decided upon, if that route is different from the official CANAMEX route, but in the meantime, they must be discussed as two separate routes.

The canamex.org website has hardly been updated since 2007 (and for a bit the url was redirecting to the ADOT website). Yet the I-11 and Intermountain West Corridor Study "Corridor Justification Report" from August 2013 discusses the CANAMEX Coalition as though it still exists. Also, Marisa Walker was described as representing "CANAMEX/Arizona Commerce Authority" where she was listed as part of the Policy Advisory Committee for the "Arizona-Sonora Border Master Plan" published in February 2013. In this Master Plan is probably the most up-to-date info on CANAMEX. This further complicates things because it indicates that there are two separate routes south of Phoenix.

"The “CANAMEX Corridor” reflects a vision for supporting the priorities of the CANAMEX Coalition while also establishing a Southwestern High Speed Rail Network. The goal of actions in this corridor is to improve mobility, promote sustainability, and preserve environmental resources. The Plan calls for strategic investments in intracontinental transportation infrastructure and technology to increase competitiveness in global trade, create jobs and maximize economic potential. It is formed by two separate travel routes connecting the international border with Sonora, Mexico, with Las Vegas, Nevada. One leg includes the route adopted in furtherance of the North American Free Trade Agreement (NAFTA). This route follows a western alignment from Nogales, Mexico, through Tucson, Arizona, around the Phoenix metropolitan area to Wickenburg, then US 93 to the Las Vegas metropolitan area. A key element of transportation enhancements in this corridor include the proposed Interstate 11 Multimodal Corridor, which has evolved to represent the ultimate high-capacity travel corridor between I-19 south of Tucson and Las Vegas and beyond. The CANAMEX Corridor definition incorporates the concept of a Western Passage of the CANAMEX trade route with a focus on improving connections between western Arizona and Mexico. This connection would take the form of a new rail corridor linking Yuma, Arizona, with a proposed mega port at Punta Colonet, Mexico. The new rail corridor would have a linkage with UPRR Sunset Route while continuing north along the Colorado River to Las Vegas, Nevada. A resolution has been prepared in support of establishing this Western Passage, and recognition from the U.S. Congress has been requested. A second potential route for new rail service in Southern Arizona has been identified as the Hassayampa Rail Corridor, which would link the UPRR Sunset Route to the Burlington Northern Santa Fe (BNSF) Railway’s “Peavine” route in Wickenburg, Arizona with a potential connection to Sonora, Mexico, through Sonoyta" (Source).

A 2013 document from the Yuma Metropolitan Planning Organization discusses this CANAMEX Western Passage as thought it exists, but information on this is not readily available (check back for an update on this blog about the Western Passage).

We can assume that in some cases, references to CANAMEX may be avoided due to its potentially controversial connotation, such as is the case with the Trans-Texas Corridor. Many people with a wide range of politics disagree with having these "NAFTA Super Highways" run through our communities. Whether it be because of the impact NAFTA has had on the workers in each of the North American countries in the past 20 years, or because more nationalistic or even xenophobic worries about a "North American Union," CANAMEX pushers are likely to avoid putting the trade corridor in the spotlight.

The question is, who is deciding all of this? It is becoming rather obvious that state officials are not on the same page as federal officials, and in fact much of this is coming from private interests, local and international. The CANAMEX website stated, “Organizationally the development of the Corridor is advanced through a multi-state coalition including public and private sector representatives selected by the Governors of the five states” (Source).

It is clear that the new Transportation and Trade Corridor Alliance (TTCA) is meant to take on the role of pushing CANAMEX, whether under that name or not. In fact, the Arizona-Mexico Commission (AMC), of which Jim Kolbe is the CANAMEX expert, and John Halikowski of ADOT is committee member (both are co-chairs of TTCA), says the following on their website: "the Arizona Governor’s Transportation and Trade Corridor Alliance (TTCA)... encompasses the former CANAMEX Task Force." (Source). The TTCA "is heavily private sector and includes representatives from APL, Avnet, UPS, BNSF, W. L. Gore, port authorities, growers and brokers, Mexican manufacturers, Arizona Trucking Association, Sky Harbor Airport, and several of the state’s councils of governments and metropolitan planning organizations" (Source).

Local government has much less stake in massive trade infrastructure and other neoliberal projects, which may explain the disconnect and lack of organization. Even though the project to create private/public collaboration has been a long time in the making, clearly not everyone is on the same page. Regarding this project, some of the puzzle pieces are laid out in "Highway to hell? CANAMEX, Loop 202, and the Tar Sands," one of the main ones being the TTCA/AMC/Jim Kolbe/Thomas F. “Mack” McLarty III/Council of the Americas/North American Competitiveness Council/Security and Prosperity Partnership (SPP) connection.

From the “Findings of the Public/Private Sector Dialogue on the Security and Prosperity Partnership of North America” report [2006]: “High-level attention from the private sector on the importance of North American cooperation is needed to establish a positive political profile for SPP. CEO-level engagement in this process is called for, participants said, and it is necessary for the private sector to communicate not only with governments but also with the public to help build greater understanding and support for a North American agenda... Strong, private sector-led initiatives resulting in regional transportation advancements are being put in place, initiated by local actors, with local interests... Transportation, it was observed, is fertile ground for public-private partnerships, but bureaucratic obstacles to the creation of cross-border infrastructure can be prohibitive of such efforts” (my emphasis).

The good news is that it is evident that they haven't completely accomplished their goals if not everyone, such as Halikowski, is on the same page. However, they have accomplished a lot. CANAMEX exists in many ways, and the pieces are slowly falling together for I-11, assuming funding becomes available. That's the other goal they're seemingly accomplishing. These public-private partnerships are increasingly being used for infrastructure such as transportation. We've already seen it with a possible Loop 202 South Mountain Freeway public-private partnership. Perhaps this is just a warm-up for such a partnership for the I-11, which could potentially even be a toll road.


Update: This May 18 article about the trade corridor running through Southern Idaho also does not mention CANAMEX, as though it doesn't already run through Idaho.


Also check out this more recent piece, Interstate 11: NAFTA Trade Corridor from June 21, 2016.


Appendix A:
You can see for yourself the overlap between these various entities.

• John Halikowski: State Transportation Board, AMC, TTCA
• Victor Flores: State Transportation Board, AMC, TTCA
• Hank Rogers: State Transportation Board, AMC
• Jack Sellers: State Transportation Board, AMC
• Jim Kolbe: TTCA, AMC, formerly CANAMEX Coalition
• James Manson: TTCA, AMC
• Gary Magrino: TTCA, AMC
• Mary Peters: TTCA, formerly of CANAMEX Coalition
• Margie Emmerman, TTCA, AMC, formerly of CANAMEX Coalition
• Bruce Wright, TTCA, AMC, formerly of CANAMEX Coalition
• Tom Skancke Executive Director of I-11 Coalition, formerly CANAMEX Coalition
• Dave Berry President of the I-11 Coalition, formerly AZ Governor's CANAMEX task force

Appendix B:
Below are some of the maps that portray I-11, sometimes in the context of a larger trade corridor and sometimes not.

From Interstate 11 Coalition's Steve Betts' presentation to the ACA on 1/11/2012
https://www.azcommerce.com/media/32195/2012-01-11-Presentation4-CANAMEX.pdf

Figure 2. From MAG's 12/11/2013 Expanding Border Zones Statewide presentation
showing a different trade route along with CANAMEX

from I11study.com

from http://azbex.com/transportation-bill-moves-i-11-closer-to-reality/

from Scott Omer's 3/14/14 Intermountain West Corridor presentation

http://bloximages.chicago2.vip.townnews.com/azstarnet.com/content/tncms/assets/v3/editorial/e/83/e8365d52-e1c5-11e2-95cf-001a4bcf887a/51d098c1e4f56.preview-620.jpg

from kjzz.org


 

Appendix C:

This is what Cherie Campbell, representing the Pima Association of Governments Regional Council, had to say about it at this meeting: "...As you know, the feds designated the CANAMEX corridor to extend from Canada to Mexico as a high-priority corridor probably, what, 15, 20 years ago. And it included portions of I-10 and I-19. And then with Map-21, the most recent federal transportation legislation, the addition of I-11 to that scenario became a reality. And that designation was only from Phoenix to the Las Vegas area. And ADOT, in fact, undertook a study of that particular route in a very specific manner, but also incorporated this larger concept of the Intermountain West Corridor and looking at the southern connectivity of a potential future I-11 and the need for that to extend southward to Mexico. In that effort, ADOT looked at a variety of alternatives. And the draft report that was issued earlier -- or late last year, did recommend that a focus occur an Alternative (C), which comes through the Pima County region and extends to Nogales, and that that route be considered for further study and further incorporation as a potential I-11 corridor, should that be designated in the future. So our board looked at that and believes that that was the right recommendation." (page 90-91 of feb 14, 2014 state transportation board notes)

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

For an updated exploration on the topics herein and on the public-private partnership for the South Mountain Freeway, see "Freeway Could Take a Toll on Arizona" posted February 2016. 

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.


See updates on the Loop 202 here.

Update on South Mountain Freeway P3

For an updated exploration on the topics herein and on the public-private partnership for the South Mountain Freeway, see "Freeway Could Take a Toll on Arizona" posted February 2016. 

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.

See updates on the Loop 202 here.

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...

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.


See updates on the Loop 202 here.

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^↩

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

For an updated exploration on the topics herein and on the public-private partnership for the South Mountain Freeway, see "Freeway Could Take a Toll on Arizona" posted February 2016. 



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.


UPDATE 10/21/14: ADOT had recently announced in the press that they were doing a Design-Build-Maintain deal that does not involve private financing. This is an atypical approach and we are trying to make sense of it. It appears likely that ADOT will attempt to use TIFIA loans, but we are uncertain about Private Activity Bonds and Availability Payments. It is unclear what the benefit to the private companies will be. In ADOT's paperwork is the following: "Project costs will be funded through a combination of Regional Area Road Fund (RARF) revenues, Highway User Revenue Fund (HURF) revenues, and federal funds dedicated to the Maricopa County region and ADOT. To facilitate acceleration of the Project, ADOT will also utilize some combination of financing mechanisms, including but not limited to its RARF credit, HURF credit, and Grant Anticipation Notes which leverage future federal funds."


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

For more information: http://stopcanamex.blogspot.com See updates on the Loop 202 here.

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 https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgcPufvqRfY8Pz6UNxjL7yW5NZJYCRNXmV7ZsGZg9fQpEtz8q5juoWvle7SfKGhftjAs0lulgpJqvf0RhjVKEG6Ko3mP1kwV9FAuDO2EUBZ2R4FRVAVursAHE_xOlBBT3Zal61RinqR8AA/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/^↩