Much-quoted revenue estimate for toll bridge is called into
question
By SUSAN HYLTON World Staff Writer
4/15/2007
A financial analysis estimating that a proposed south Tulsa
toll bridge would net $800 million over 75 years should no
longer be relied upon, a corporate officer with an
investment banking firm said last week.
Robert K. Dalton, vice chairman of the municipal division for George K. Baum & Co., said his firm was not paid for preparing the report.
"I don't know the origins of the report or the results, and I prefer that our firm's name not be used in conjunction with such old material," Dalton said.
Dalton said he believes the company's former vice president of transportation finance, Dan Dean, wrote the report in 2005.
Dalton said he retrieved a draft e-mail dated October 2005 from the firm that asks the South Tulsa Citizens Coalition, which opposes the bridge, to stop using the report.
He said he instructed Dean to send the e-mail but cannot confirm that it was ever sent.
Citizens Coalition spokesman Michael Covey said the group never received any such e-mail.
Dean, who was contacted at a Merrill Lynch office in Chicago on Tuesday, at first said he didn't remember for whom he wrote the report. He later said he thought his company was supposed to send something to the Citizens Coalition but doesn't know whether it ever did.
The financial analysis predicted that Tulsa-based Infrastructure Ventures Inc., which would build and operate the bridge, would net $658 million over the life of a 75-year agreement, while its governmental partner would receive a share of about $133 million. Infrastructure Ventures has said those numbers are inflated.
The coalition has relied on the report to further its argument that the toll bridge should be built by governmental entities so that the revenues would be invested back into public infrastructure and not go into the pockets of a private company.
Tulsa City Councilor Bill Christiansen also relied on the report in his proposal for Tulsa to partner with Jenks to build the bridge and omit Infrastructure Ventures from the equation.
Christiansen held a press conference with the Citizens Coalition to announce the proposal last month.
A reporter for The Bond Buyer, a daily newspaper that covers the municipal bond industry, picked up the story, saying the councilor was floating a plan that would derail a public-private partnership.
IVI partner Terry Young, a former Tulsa mayor, said IVI always considered the report to be inaccurate but never at tempted to make an issue of it in the media until the report reached a national publication at a time when they are at "near-final negotiations" for the financing of the bridge.
"That changes the complexion," he said. "We have terms generally satisfactory to the lender and us, and suddenly this story appears in The Bond Buyer. Before noon that day, we received a call from New York wanting to know what that was all about."
Jenks Mayor Vic Vreeland said he's never considered Christiansen's proposal legitimate.
"If you're wanting to partner with someone, wouldn't you talk to them before they read it in the newspaper?" Vreeland asked.
Christiansen said he hasn't approached Jenks because he didn't want it to appear as if he were trying to interfere with the district court case launched by the Citizens Coalition. A judge on Monday ruled in IVI's favor in the case.
The Citizens Coalition has not decided whether it will appeal.
Christiansen said he still wants to continue to attempt by whatever legal means is available to prevent IVI from building the bridge, so that Tulsa can participate in the net revenue. He said he can't speak for the rest of the city council.
Young said several factors have changed that could affect revenues. Traffic projections for bridge use are now down from 7,500 to 6,000 vehicles per day. Interest rates have also changed.
"There's no way in the world to project what, over 75 years, will be the net income or profit," Young said.
He said IVI has made a few projections, but the company does not consider them public information.
"Anything we reveal would be a violation of a confidentiality agreement," Young said.
Young said the project would be 100 percent privately financed with all the risk falling on the shoulders of IVI.
"It doesn't rely on any tax dollars," he said.
Covey said the numbers in the financial report were based on the information available at the time, and that the new traffic counts and interest rates wouldn't change the bottom line very much.
"The easy way to put an end to all this is (for IVI) to provide their numbers to the public, which they are not willing to do. If they want to dispute those figures, then put your finances out in the open," Covey said.
Susan Hylton 581-8381
susan.hylton@tulsaworld.com
Robert K. Dalton, vice chairman of the municipal division for George K. Baum & Co., said his firm was not paid for preparing the report.
"I don't know the origins of the report or the results, and I prefer that our firm's name not be used in conjunction with such old material," Dalton said.
Dalton said he believes the company's former vice president of transportation finance, Dan Dean, wrote the report in 2005.
Dalton said he retrieved a draft e-mail dated October 2005 from the firm that asks the South Tulsa Citizens Coalition, which opposes the bridge, to stop using the report.
He said he instructed Dean to send the e-mail but cannot confirm that it was ever sent.
Citizens Coalition spokesman Michael Covey said the group never received any such e-mail.
Dean, who was contacted at a Merrill Lynch office in Chicago on Tuesday, at first said he didn't remember for whom he wrote the report. He later said he thought his company was supposed to send something to the Citizens Coalition but doesn't know whether it ever did.
The financial analysis predicted that Tulsa-based Infrastructure Ventures Inc., which would build and operate the bridge, would net $658 million over the life of a 75-year agreement, while its governmental partner would receive a share of about $133 million. Infrastructure Ventures has said those numbers are inflated.
The coalition has relied on the report to further its argument that the toll bridge should be built by governmental entities so that the revenues would be invested back into public infrastructure and not go into the pockets of a private company.
Tulsa City Councilor Bill Christiansen also relied on the report in his proposal for Tulsa to partner with Jenks to build the bridge and omit Infrastructure Ventures from the equation.
Christiansen held a press conference with the Citizens Coalition to announce the proposal last month.
A reporter for The Bond Buyer, a daily newspaper that covers the municipal bond industry, picked up the story, saying the councilor was floating a plan that would derail a public-private partnership.
IVI partner Terry Young, a former Tulsa mayor, said IVI always considered the report to be inaccurate but never at tempted to make an issue of it in the media until the report reached a national publication at a time when they are at "near-final negotiations" for the financing of the bridge.
"That changes the complexion," he said. "We have terms generally satisfactory to the lender and us, and suddenly this story appears in The Bond Buyer. Before noon that day, we received a call from New York wanting to know what that was all about."
Jenks Mayor Vic Vreeland said he's never considered Christiansen's proposal legitimate.
"If you're wanting to partner with someone, wouldn't you talk to them before they read it in the newspaper?" Vreeland asked.
Christiansen said he hasn't approached Jenks because he didn't want it to appear as if he were trying to interfere with the district court case launched by the Citizens Coalition. A judge on Monday ruled in IVI's favor in the case.
The Citizens Coalition has not decided whether it will appeal.
Christiansen said he still wants to continue to attempt by whatever legal means is available to prevent IVI from building the bridge, so that Tulsa can participate in the net revenue. He said he can't speak for the rest of the city council.
Young said several factors have changed that could affect revenues. Traffic projections for bridge use are now down from 7,500 to 6,000 vehicles per day. Interest rates have also changed.
"There's no way in the world to project what, over 75 years, will be the net income or profit," Young said.
He said IVI has made a few projections, but the company does not consider them public information.
"Anything we reveal would be a violation of a confidentiality agreement," Young said.
Young said the project would be 100 percent privately financed with all the risk falling on the shoulders of IVI.
"It doesn't rely on any tax dollars," he said.
Covey said the numbers in the financial report were based on the information available at the time, and that the new traffic counts and interest rates wouldn't change the bottom line very much.
"The easy way to put an end to all this is (for IVI) to provide their numbers to the public, which they are not willing to do. If they want to dispute those figures, then put your finances out in the open," Covey said.
Susan Hylton 581-8381
susan.hylton@tulsaworld.com