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NEW YORK CITY—The Obama administration on Thursday released data showing that the American Recovery and Reinvestment Act has created 30,383 jobs under federal contracts awarded since its passage. In the popular perception, that means $787 billion going toward rebuilding roads and other infrastructure. The reality, says attorney and author Barry LePatner, is quite different.
"The stimulus act is almost exclusively a jobs bill; it truly has nothing to do with addressing the major shortcomings of our nation's infrastructure," says LePatner, founding partner of LePatner & Associates and author of Broken Buildings, Busted Budgets: Fixing America's Trillion-Dollar Construction Industry. "We can't confuse the funding for ARRA with the several trillion dollars that will become the focus of our nation's infrastructure, once healthcare and the fiscal crisis are behind us next year." He says that after these two mega-issues are resolved, "the spinal cord that makes us a great nation" must come next.
The question is, where will that attention come from? Given the crazy quilt of state and federal jurisdictions, the answer is unclear. "We have more disarray than we have a game plan," LePatner says. "As someone who has spent the last two years researching a book about the perilous state of our nation's infrastructure, I see major restructuring needed if we're going to address the serious problems that we have."
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Although not a big fan of the word "czar" as it's currently used in public policy, LePatner says having just such a point person is in order. "Somebody will be needed to coordinate, across agencies and jurisdictions, the massive amount of information and asset management that will have to redefine the new transportation bill coming up in Congress," he says. That "infrastructure czar" will also have to spell out "how we identify and triage the critical needs" that have to be addressed.
Making the public aware of those needs, says LePatner, calls for "a massive amount of re-education" on how extensive the problem is. "National figures, such as Mayor Michael Bloomberg and Govs. Ed Rendell of Pennsylvania and Arnold Schwarzenegger of California, who have sought to understand infrastructure issues, have seen them as overwhelming in terms of how to develop solutions," he says. "And few if any of the states have been able to allocate capital funding to bring their roads, bridges or airports up to design standards."
There are about 600,000 bridges across the US, and 26% of them cannot safely handle the amount of traffic that goes across, says LePatner. Replacement costs are staggering, on both a macro and micro level.
"After 10 or 15 years of analysis, the New York State Department of Transportation says we need a new Tappan Zee Bridge across the Hudson, at an estimated cost of $16 billion," he says. "If history is any indication, that bridge will cost more than $25 billion. We don't have that." Nonetheless, LePatner says his number one short-term priority would be to replace—regardless of cost—the thousands of US bridges that are "fracture-critical," i.e. in danger of collapsing if a single element fails. The Minnesota bridge that collapsed into the Mississippi River in 2007, killing 13, was one such structure.
Some states have looked to public-private partnerships to manage infrastructure funding issues. Domestically, the rate of success hasn't been great, although overseas such partnerships are commonplace. In 2008, Rendell announced that the Pennsylvania Turnpike would be leased for 75 years to Spain-based Abertis Infraestructuras, pumping $12.5 billion into the state's coffers. However, it wasn't clear whether there were safeguards to protect businesses along the 537-mile toll road from being uprooted, whether turnpike employees' jobs were assured or whether the state stood to lose more than it gained. "All of these uncertainties were not addressed carefully enough, and the public dialogue was not extensive enough, to overcome the hesitancy of the legislature, who voted it down," says LePatner.
"These public-private partnerships offer an opportunity, but we have to approach them very carefully," he says. "We need to look at it not just from the standpoint of asset management, but also making sure that public well-being issues are being discussed and analyzed."
Long-term, LePatner calls for "a new national strategic transportation plan" that would manage the distribution of hundreds of billions of dollars of funding. "It would acknowledge the challenges that are tying up our major metropolitan areas, costing us 2.9 billion gallons of gas per year and a congestion cost of $79 billion a year," he says. "We are choking ourselves on our roads and bridges, and have no game plan to deal with it."
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
