EPA Rejects Most of N.Y.’s $511 Million Tappan Zee LoanFreeman Klopott
A $511 million loan approved by a New York environmental agency to help fund the construction of a new $4 billion Tappan Zee Bridge was rejected almost entirely by the U.S. Environmental Protection Agency.
The loan was intended to drive down borrowing costs for the replacement span being built across the Hudson River, with half of it being provided at zero interest. The agency, the Environmental Facilities Corp., approved the borrowing in June, saying it could use the funds from a program that targets clean-water projects.
The EPA said today in a letter to state officials that building a new bridge doesn’t fit the intention of the program, which is backed by federal dollars. The agency, citing the U.S. Clean Water Act, said only $29.1 million could be allowed.
“Construction activities arising from transportation projects do not advance water quality,” Joan Matthews, the regional director of the clean-water division, wrote in the letter, which was posted on the EPA’s website. “No other state has made a request of this type or magnitude.”
The EPA’s denial is a blow to New York Governor Andrew Cuomo, a 56-year-old Democrat, who has made building a new Tappan Zee a priority, comparing it with the 19th-century construction of the Erie Canal. About 20 miles (32 kilometers) north of Manhattan, the bridge is among the nation’s largest public-works projects.
The rejected loan would have saved $35 million on financing costs over traditional bond sales, according to Howard Milstein, chairman of the New York State Thruway Authority, which is building the span. Along with a $1.6 billion federal loan the authority won last year, the $511 million was supposed to help hold down toll increases that will be needed to cover costs when the bridge is finished in 2018.
Cuomo, speaking to reporters today in New Paltz, said the state plans to appeal the ruling.
“The bridge construction was never dependent on this loan in the first place,” Cuomo said.
Jon Sorensen, a spokesman for the Environmental Facilities Corp., said in an e-mailed statement that the EPA’s assessment is wrong and that projects the loan would have funded would benefit the Hudson River.
Dan Weiller, a spokesman for the Thruway Authority, didn’t respond to requests for comment.
The three-mile-long Tappan Zee, which opened in 1955, connects Rockland and Westchester counties. The structure, designed to last 50 years, carries 138,000 vehicles daily, 40 percent more than intended. It costs $5 cash for a regular passenger vehicle to cross, collected in only one direction.
As part of building the new bridge, the authority’s debt load may swell to more than $7 billion, from about $3.7 billion last year, by the time the job is finished.
The growing debt, and “the lack of a specific tolling plan” to cover it, helped lead Standard & Poor’s to cut the rating on the authority’s general-revenue bonds to A, its sixth-highest grade, on Oct. 29.
Peter Iwanowicz, executive director of Environmental Advocates of New York, said the loan should never have been approved.
“The Cuomo administration’s attempt to raid federal Clean Water Act funds to pay for bridge construction was appropriately rejected,” Iwanowicz said in an e-mailed statement.