Road partnership shows stress as time passes
By CATHERINE E. SHOICHET
Published May 25, 2007
Amid a cooling real estate market and rising costs, one of the county's most anticipated road projects has hit a speed bump.
More than two years ago, county commissioners approved a public-private partnership to widen 6.1 miles of U.S. 301 between Gibsonton Drive and Balm Road.
Developers described the project as a pioneering way to pay for growth - Hillsborough County, the Florida Department of Transportation and a group of developers would all chip in to pay for the road's expansion.
Government officials touted it as a model at national conferences and planned for crews to break ground early this year. Another group of developers lined up to join.
But now the $117-million project is in limbo as those developers try to negotiate a lower price.
County and state officials say that after a few more meetings, the road widening will be back on track.
"The cost of road construction really went up, " said Bob Campbell, the county's director of transportation planning. "We have been working through that issue."
If all goes according to plan, Campbell said, expansion of the road from two lanes to six will start early next year and finish 20 months later.
Several developers involved with the project say they are skeptical. Others have dropped out altogether.
"I know everybody's trying to do their job at the county, " said Tom Kazbour, who wants to build a 22, 000-square-foot shopping center on 5 acres his company owns on U.S. 301 just south of Gibsonton Drive.
"I just feel that it's taken way too long."
For a while, Kazbour said he stopped going to meetings because they seemed so unproductive.
"Every day goes by, and it's costing us money, " he said.
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Originally, the state planned to begin designing the U.S. 301 expansion in 2015.
But county commissioners changed that in March 2005, when they approved an agreement with 10 developers to expand the road.
Since then, the developers involved have sent the county checks for $39.7-million. The county has pledged $17.2-million. The DOT has set aside $32-million, and plans to pay $11.8-million back to the county when the money becomes available in future fiscal years.
Before long, more developers wanted to contribute.
The real estate market was hot, and a second partnership agreement would pave the way for more development in the congested corridor. Otherwise, building permits might be held up because of state laws requiring roads to have enough traffic capacity before new developments are approved.
But negotiations for right-of-way and retention ponds took longer than officials expected, Campbell said.
The market began to cool, road construction costs spiked dramatically and, one by one, developers in the second group started to drop out.
"It was either getting too expensive for them or it was just going on too long, " said Ken Wagner, a division president for Lennar Communities, which has been involved in negotiations for both U.S. 301 widening agreements.
"We want to do everything to keep the momentum going, " Wagner said. "But it still comes down, at the end of the day, to how much is it going to cost?"
Campbell said his goal is for developers in the second group to contribute $27-million more.
But for some, that may be too much.
"In the minds of a number of developers at the table, the county's expectations about what the developers could afford to put in and continue have been a bit unrealistic, " said Bob Appleyard, vice president of Valrico-based Transcend Development Corp.
A solution is unclear, he said. "I wish I could offer one."
If the second agreement falls through, making up the difference could be difficult.
"We understand the realities, so we may be forced to go to four lanes instead of six lanes, " Campbell said.
Richard Norment, executive director of the National Council for Public-Private Partnerships, said such sticking points are common.
"Part of the problem is partnerships are very complex contractual relationships. You basically have five different chiefs in the same room trying to figure out what is the best way to work this all out, " he said.
"A very high percentage of them are completed and successful, but not all. Sometimes you run into situations where the economics of an area change."
But Norment said the approach remains a promising method for funding infrastructure improvements.
"Sometimes people just need a little bit longer to talk these things out, " he said.
Ron Weaver, a Tampa land use attorney, said officials should consider more "creative financing" for the project, such as using impact fees to repay developers for their contributions.
Campbell said officials have considered scaling back the project to cut costs. But he said many features of the widened road are necessary improvements for public safety.
"You only get one chance to do these things right, " he said. "It's a pretty unique undertaking anywhere in the county. It should be a model project."
Gordana Jovanovic, the DOT's project manager for the U.S. 301 widening, said the state may use it as a model as well.
"We learned a lot from this one. ... Whenever you're doing something for the first time, when it's innovative, it's an effort for a lot of people, " she said. "But we can see the end, and we're really excited about that."
Catherine E. Shoichet can be reached at email@example.com or 813 661-2454.
[Last modified May 24, 2007, 07:50:39]
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