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What happens to a toll bridge that can't pay its debts? No one knows for sure. Lawsuits are likely.
By CRAIG PITTMAN
© St. Petersburg Times, published June 19, 2001
A Panhandle toll bridge long labeled a boondoggle by its critics will likely default on its debts because Gov. Jeb Bush has vetoed a million-dollar bailout, the chairman of the bridge authority said Monday.
The Garcon Point Bridge over eastern Pensacola Bay, a pet project of former House Speaker Bolley "Bo" Johnson, is drawing about half the number of motorists experts predicted when the authority approved a $95-million bond issue to build it.
The Legislature's $1.4-million emergency loan was supposed to help the Santa Rosa Bay Bridge Authority meet its next bond payment, due July 1.
The governor vetoed the bailout because he "doesn't believe the state needs to take on this fiscal responsibility," Bush spokeswoman Elizabeth Hirst said.
"You can't shoot a dog too many times before he's dead," Santa Rosa Bay Bridge Authority Chairman Hal Danley said. "That's what's been done to us. This was a direct shot to the head."
Danley said he is uncertain what will happen to the bridge: "Do they come and throw up a flag and put a sign on it that says, "Foreclosed'?"
More likely the bridge will remain in business while the bondholders sue everyone in sight, said former authority financial adviser Joe Mooney. He predicted lawsuits against the authority, the consultants who worked on the project and the state agencies that pushed it behind the scenes.
"The state in effect was the driving force on this," said Mooney, who was ousted by the authority in the mid 1990s when he predicted the bridge would fail financially.
Danley and Mooney both predicted that a default by the bridge authority will make Wall Street investors wary of buying bonds for any other Florida transportation projects. But Hirst said state officials have already told bond-rating services they should not hold the state responsible.
"This was not a state debt so it should not affect the state's bonds," she said.
The bridge has been nicknamed "Bo's Bridge" after Johnson, a Milton Democrat who recently completed a prison sentence for an unrelated income tax evasion conviction.
Johnson was released in February. He could not be reached for comment Monday.
Before the bridge was built, critics called it a boondoggle that would harm Pensacola Bay, spur development on otherwise quiet barrier islands and never attract enough motorists to justify its $52-million price tag. They said it was being built just to make money for land speculators.
Johnson, who had an interest in land at the end of the bridge, pushed through special laws to get it built, at one point arranging an $8.5-million state loan when the limit on that type of borrowing was $500,000.
Now the authority is unable to pay back that loan or any other debts, according to Danley. Asked if the authority will miss its next bond payment July 1, Danley said, "Unless something else happens, yeah."
Hirst said the authority can tap a reserve account, at least for a while. But Mooney said even that constitutes a technical default. Once the reserve is tapped out the lawsuits will start flying, he said.
The bridge is in such dire straits that in the past three months the authority's director has quit, its bonds have been downgraded to junk status and its toll was increased from $2 to $2.50, even though motorists were already complaining about the price.
The company that built the bridge, Odebrecht-Metric, pleaded guilty last year to illegally dumping waste in the bay, cutting corners to finish quickly. At least one inspector from Figg Bridge Engineers told investigators he witnessed the dumping, but Figg did nothing to stop it.
Since it opened in May 1999 the bridge has drawn only half the traffic it was supposed to, leading to the authority's financial shortfall. Danley blamed the shortfall on a San Francisco-based consulting company, URS Greiner Woodward Clyde, which he said was handpicked by state transportation officials to advise the authority.
URS has provided off-base traffic predictions for other Florida toll projects, including the Veterans Expressway in Tampa and the Suncoast Parkway in Pasco and Hernando counties. URS vice president Hugh Miller said last year that company officials "were basically guessing" when they came up with the numbers for many Florida projects, including the Garcon Point Bridge.
URS based its Garcon Point Bridge figures on a bridge in the next county that leads to the popular beach resort of Destin. There is no Destin at the end of the Garcon Point Bridge, just a barrier island that was under a septic tank moratorium limiting growth.
"We now know that," Arthur Goldberg, the URS vice president who wrote the estimates for the Garcon Point Bridge, said last year. "I don't think the Garcon Point Bridge will ever get back to the forecast we made for it in 1996."
He could not be reached for comment Monday.
Because of the shortfall, the bridge was counting on a $1.4-million loan approved by the Legislature to cover its debts. Danley said he had been assured by Panhandle lawmakers that the bailout was all set.
But on Friday the governor vetoed that appropriation, saying the loan had not been properly vetted by state transportation officials.
The veto delighted environmental activists, who hoped it would send a message to other toll authorities across the state itching to build similar projects. Audubon of Florida senior vice president Charles Lee, who had urged Bush to reject the bailout, called the veto "the intersection of fiscal responsibility and environmental protection."
-- Staff researcher Caryn Baird contributed to this report.
Bridge inspectors unscathed (June 11, 2001)
Financially, 'Bo's Bridge' in dire straits (June 7, 2001)
Flawed figures leave toll roads running flat (July 16, 2000)