Alert
Alert
08.19.11
The Presidio Parkway Project, California’s first public-private partnership (“P3”) to move forward under legislation enacted in 2009, is expected to proceed after a California appellate court denied a request to enjoin the project. Filed on August 8, the decision upheld a lower court ruling dismissing a claim that the project did not meet the requirements of California’s P3 transportation authorization statute.1 This is significant not only for the Presidio Parkway Project, but also because the legislation applicable to this project is the blueprint for structuring eight other pending transportation projects with a total estimated cost of $25 billion.2
The ruling will allow the California Department of Transportation (“Caltrans”) to apply tax revenues (as appropriated through the annual budgetary process), rather than toll revenues (which are dependent upon driver demand), to fund availability payments to be made under a contract with the concessionaire responsible for constructing and operating the project. The ruling also confirms that Caltrans is properly acting as the “responsible agency” under the enabling statute. Whether the appellate court ruling is the last word on the matter remains to be seen because it is still possible that the ruling could be appealed to the California Supreme Court. If appealed, however, it is not certain that the California Supreme Court would elect to review the ruling.
Background
The Presidio Parkway will replace Doyle Drive, the thoroughfare connecting San Francisco to the Golden Gate Bridge. Doyle Drive is structurally deficient and does not meet current highway safety or seismic standards; this replacement project has been under consideration since 1998. The union representing Caltrans engineers and related professionals, Professional Engineers in California Government (“PECG”), filed suit in November 2010 seeking to prevent Caltrans from implementing the second phase of the project by effectively preventing the agency from entering into a contract with the concessionaire that would provide for availability payments funded by tax revenues.