State Hires Financial Consultant for Tappan Zee Project
New York State Department of Transportation Press Release - February 2009

New York City Firm to Make Funding Recommendations by Year’s End

The New York State Department of Transportation (NYSDOT) has retained Merrill Lynch, Pierce, Fenner & Smith, Incorporated of New York City to serve as financial advisor for the Tappan Zee Bridge /I-287 Corridor Project. The Merrill Lynch team will be responsible for developing feasible financing solutions to fund the proposed $16 billion project that will replace the bridge and add multi-modal transportation choices to the corridor. The financial analysis, options and recommendations are scheduled to be completed by December 31.

NYSDOT recently signed a one-year, $2.2 million contract with the Merrill Lynch team. For this project, the firm is joining with Winston & Strawn LLP and Loop Capital, both based in New York City. As a whole, the financial advisors bring decades of national and international experience in devising and implementing traditional, innovative and hybrid financing mechanisms for transportation mega-projects. A financial plan is required to complete the Tappan Zee/I-287 project’s extensive environmental review process.

Merrill Lynch, Pierce, Fenner & Smith and its subconsultant team was designated from among four companies that responded to NYSDOT’s request for proposals. The contract has been approved by both the state comptroller and attorney general’s offices.

NYSDOT heads the three-agency team that last fall recommended a complete replacement of the Tappan Zee Bridge in the lower Hudson Valley and development of bus rapid transit and commuter rail systems along the I-287 corridor. The New York State Thruway Authority and Metro-North Railroad, a subsidiary of the Metropolitan Transportation Authority, are partners in the project. The Federal Highway Administration and the Federal Transit Administration are cooperating with the state in the development of the proposed project’s environmental impact statement.

The financial consultant’s work will start with the results of the “Preliminary Financial Studies, Phase 1 Report,” released November 21, 2008, which illustrated the difficulties of financing a project of this magnitude. That document provided an overview of the financial challenge ahead and provided case studies of a dozen large transportation projects recently constructed in the United States and abroad. The preliminary report also outlined federal requirements for major transportation projects, third-party approvals the project could require and an analysis of bond agreements associated with the Tappan Zee Bridge and New York State Thruway Authority, which owns and operates the bridge.

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