No bailout for NY rest area project; talks continue on contract terms
There will be no taxpayer bailout for contractors rebuilding and renovating rest stops along the New York state Thruway. Not for now.
“I would say that door probably is closed until next year, if that's still an issue next year,” said state Sen. Jeremy Cooney, D-Rochester.
The state budget was seen as the vehicle to deliver a sizable cash infusion necessary to offset cost overruns that contractors have blamed on "unprecedented global price escalation and supply chain issues.” But the budget passed this week without any funds set aside for that.
Construction began almost two years ago under a public-private partnership that officials promised wouldn’t cost taxpayers a dime.
Less than half of the work has been done, and it’s running well behind schedule.
"The pandemic kind of threw things off in terms of unexpected material costs,” Cooney said. “Costs for concrete, costs for steel – things that we need to build these rest stops. So we've been trying to figure out a solution.”
Cooney has been involved in talks with Rochester-based LeChase Construction and other project partners through his work on Senate committees overseeing transportation and state contracts.
He previously estimated the overage at $200 million. The Buffalo News has reported the need for assistance is closer to $250 million. A spokesman for LeChase deferred comment to partner AECOM Tishman, which did not immediately respond.
LeChase is a minority partner in the project that involves multinational corporations with the Irish firm Applegreen at the top. The deal was for Applegreen to rebuild the weathered and outdated rest areas in exchange for a 33-year lease of the facilities and a cut of revenues.
Talks continue with the possibility of adjusting contract terms between Applegreen and the New York state Thruway Authority.
There was widespread pushback to any infusion of taxpayer dollars. Cooney favored some level of aid, so long as the money flowed first to LeChase and its subcontractors. They are handling the bulk of construction.
“We don't want to, you know, leave anyone holding the bag, if you will,” Cooney said. “We want to make sure that we're doing this in a fair and equitable way. So those are the conversations that are going to continue on, even now that we've passed the budget.”
The Thruway Authority, meanwhile, has its own financial concerns. They will kick off public hearings next week on proposed toll increases they claim are needed to repair and rebuild aging roads and bridges.