By Michael E. Miller
By Allie Conti
By Keegan Hamilton and Francisco Alvarado
By Jake Rossen
By Allie Conti
By Kyle Swenson
By Chris Joseph
By Michael E. Miller
Somebody stop Charlie Crist.
Stop the Florida governor from hawking Alligator Alley to foreign companies. Stop him from leasing the 78 miles of fenced and flat highway stretching across the Everglades to investors who will bleed motorists dry with higher tolls and no accountability to the people.
Stop him from padding the wallets of law firms and investment banks whose take will amount to tens of millions of dollars.
Just stop Charlie Crist, because right now, it looks like his outrageously ill-advised plan is going to slide through.
South Florida drivers will pay for the lion's share of it, likely with little in return. North Florida politicians are licking their overfed lips at the thought — which is why they overwhelmingly passed the legislation that made selling off Alligator Alley possible last year. All the powerless Democratic delegation from South Florida could do was whimper and vote "no" to allowing the privatization of toll roads.
One is that adding toll roads and selling them to high bidders will raise some fleeting cash without forcing legislators to admit that they had to raise taxes.
Tolls, you see, aren't taxes, even though they still come out of our pockets.
Put simply, this is a cash grab by this governor and this Legislature. The next generations will have to deal with the loss of annual revenue that the alley will bring over the next 50 to 75 years.
It's true that leasing the alley over the next half-century will create some quick revenue, with unofficial estimates averaging about $1 billion. But it's also true that tolls will rise from the current $2.50 to as much as $10 in the next several years, according to a state estimate. And we'll be giving up the annual revenue stream from the alley, which now stands at about $25 million a year and is expected to rise exponentially.
The company that wins the contract won't be alone in milking taxpayers. Financial and legal firms are already circling, looking for a bite of the pie. The proposals from six approved companies — all of them backed by foreign interests — haven't been submitted yet, but the money is already flowing to two firms, financial services giant KPMG and the New York law firm Freshfields Brukhaus Deringer.
Both have inked contracts to assist the Florida Department of Transportation in setting up the complicated deal. While numbers weren't made available from the Florida Department of Transportation, neither of those companies comes cheap.
Boca Raton financial adviser Arthur Bernstein has studied the plan and says the "arrangers" of the deal — banks, lawyers, etc. — will likely collect about $25 million, or a year's worth of alley revenues. "I am convinced that this lease is of no benefit to taxpayers," says Bernstein, whose firm, Amber International, provides financial services to aviation firms. "Worse, it sucks tolls from South Florida residents and commercial vehicles while promising to keep the money here. We know this is not going to happen. The revenues will be diverted elsewhere. Doesn't Charlie realize that these folks expect a profit and that it will come out of our pockets?"
The state can raise it by selling bonds that are backed by the alley's revenue stream, Bernstein notes. There's no need to give away the store.
Bernstein wrote a memo to Palm Beach County Commissioners last month urging them and others in surrounding areas to fight the proposal. "All commissioners and legislators [in South Florida] must join together, not withstanding political affiliation, to protect their constituents from having their 'toll pockets' picked for private gain," he wrote.
He's not alone in his sentiments. It's hard to find anybody in South Florida who likes the idea (other than Bogdanoff and Hasner). Collier County activist Gary Eidson has started a petition against it and says he rarely finds anyone who likes the plan.
"It's just a bad idea," says Eidson, who is founder and chairman of the Citizens Transportation Coalition of Collier County. "And it's part of Charlie Crist's plan to make our roads toll roads and lease them off. This is just the first of many."
The good news is that the alley project is still in the early stages and isn't set in stone. The FDOT, which is waiting for proposals, could reject all offers.
"The whole reason for the solicitation is to let the market tell us what the market is," says Clay Massengill, special counsel for FDOT. "If the market is high enough compared with what we can do on our own, we'll go in that direction. If whatever the private sector puts on the table is not significantly better, then it wouldn't be indicative of going with a private approach. We hope we are going to be pleasantly surprised."
The problem with that: Big companies working with big investment banks and teams of top lawyers almost always find ways to pleasantly surprise bureaucrats — only to juice taxpayers down the road.