Miami must be a stern gatekeeper in port tunnel decision
By Michael Lewis
It would be easier to sell the City of Miami on pouring $50 million into a Port of Miami tunnel if we could see the light at the end of the tunnel.
We're told a tunnel is vital to get trucks serving the port off downtown streets, but the path down the tunnel is shrouded in as much darkness as the one Alice in Wonderland took down the rabbit hole.
Proponents had good news last week: the concessionaire that would dig the tunnel and reap toll profits agreed to ignore its own Sept. 30 deadline for a tunnel deal and freeze the price until the city agrees to put up its $50 million share.
That must mean the deal looks great to the three companies united to dig and operate a tunnel using free public land, with government kicking in $910 million of the $1.162 billion that the consortium would get over 35 years. It must be too good a deal for them to pass up.
But is it good for us, too?
This county has a huge appetite for huge public works projects in which it shares control with outsiders. The results, to be kind, are spotty.
The not-for-profit Carnival Center for the Performing Arts cost about triple projections and more than double a firm bid that was rejected as too high. Finances of that deal were low-balled and then dumped on taxpayers who had been promised the county would never fund operations.
AmericanAirlines Arena was also built on public land, this time by a private operator who pledged profits to the county. So far, not a dime of profit for anyone but the operator, the Miami Heat.
Next up is a baseball stadium sought for public land financed with public money and built by team owners who have never developed anything with vague promises that the public will get a small slice of profits that also are unlikely.
Now government wants to venture with reputable builders who want public land and money to dig and operate a port tunnel from which they would collect tolls to help repay construction and operating costs — but to repay themselves, not the public.
There's merit in a properly conceived, public-private joint venture that correctly builds and profitably operates a public facility that offers true benefit to a community commensurate with cost.
The hurdles are "properly conceived," "correctly builds," "profitably operates," "true benefit" and "commensurate with cost." This county doesn't have a good record on those scores. And we don't know enough about this project to feel secure that we'd do any better than in the past.
Take properly conceived: is a tunnel costing more than $1.5 billion — including new feeder highways that would be vital to make it work — really the most cost-effective solution to port truck traffic?
Some people suggest having the railway that now carries 8% of port freight in occasional late-night runs haul more.
One 50-car train handles as much as 100 trucks. What if trains ran every night? Added freight loading and unloading costs wouldn't approach $1.5 billion over 35 years. It would cost far, far less to subsidize trains than to dig a tunnel.
An even lower subsidy: Pay truckers to make pre-dawn port runs and finance that subsidy by charging truckers who use the port in daylight. With the right balance of carrot and stick, we'd clear the roads at no cost.
Other suggestions: Build a $24 million ramp onto I-95 from Northwest Sixth Street downtown and clear parking meters from roads linking the port and I-95 to open two more lanes.
Next, correctly build: Remember the Big Dig tunnel disaster in Boston. A tunnel under a bay subject to tropical disturbances could in 35 years suffer innumerable problems. Even a perfectly engineered and constructed tunnel could face catastrophe with a hurricane striking either end.
Next, profitably operate: Tunnel concessionaires would need profits after paying operating costs and their slice of bond debt. Long-term projections could be upended if Miami lost a share of cargo trucking to another port or to world economic changes. Or, what if operating costs were underestimated — as happened in spades at the Carnival Center?
To fund shortfalls, truck tolls would shoot far above the $5 to $7 now projected, which could drive away more port business. And don't forget a planned $2 to $3 toll on every car using the present port bridge — there's no cap on what could be charged. Think here Carnival Center parking.
How about true benefit: Even if we get port trucks off downtown streets, congestion is still guaranteed by other trucks, thousands of new condos and the combined effects of Carnival Center, AmericanAirlines Arena, Museum Park (if and when built) and downtown business traffic. Trucks to the port are an annoyance, but lots of port traffic is from cruise passengers who wouldn't use a tunnel at all.
And commensurate with cost: The Port of Miami is indeed a key economic engine for Miami. It's vital that it hum smoothly. But how important is congestion entering the port to its long-term future if a county commissioner could move last week to seek a tourist-attraction viewing wheel on the port, where it would bring in a new stream of cars? Is it worth $1.5 billion to reduce the flow of trucks so we can expand the flow of cars?
The city seems to be bypassing these issues as it weighs the final $50 million that together with $402.5 million from the county and $457 million from the state would get digging started. Miami's concern is equity: is it fair for city taxpayers to put $50 million into a project and get nothing back?
That's a valid policy decision — but one that should only come into play after the project first passes the tests of proper conception, suitable construction, profitable operation, true community benefit and suitable cost. If city commissioners after due diligence determine that a tunnel adequately meets those criteria, they should carefully determine how they could pay their share and what they might get in return. They aren't near that point yet.
So, do we just take it on faith that government will do the right thing itself and then make certain that the private partners do the right thing on their end?
Or are we, in deciding on a tunnel, just paving the way for journalists of the future to dig up another Pulitzer Prize scandal?
The county and state have already signed off on this project, leaving their junior partners, five city commissioners, to assume the roles of heroes or villains. They can roadblock a bad project, green light a good one.
What they definitely must not do is decide based solely on how much money the city might someday get back.
Thankfully, they're watching the public purse. More importantly, they must watch the public purpose and decide whether a tunnel is the right road to go down in the first place.