A state loan to build two additional lanes of an extended State Road 56 is in jeopardy, as state and county officials haggle over details of how to repay the estimated $22 million construction costs.
The road project currently calls for a two-lane extension of State Road 56 from Meadow Pointe Boulevard in Wiregrass Ranch to U.S. 301 in Zephyrhills.
A state loan would allow a four-lane road to be built — which is what residents and city officials in Zephyrhills have sought for years.
Pasco County commissioners will review eight agenda items on Jan. 12 related to the loan application that was made in May to the State Infrastructure Bank. They are facing a deadline on that date to complete an agreement acceptable to the county, the Florida Department of Transportation, area developers, and Cone & Graham, which is contracted to build the first two lanes of the project.
Everything could fall in to place by then, or not.
“Unfortunately, the ball’s in DOT’s corner. They set the deadline,” said Assistant County Attorney David Goldstein. “The deal is going to fall apart, or they are going to have to give us a new deadline.”
Most of the issues with developers and the road contractor are resolved, but state department of transportation requirements on the loan’s repayment are a major sticking point.
Goldstein said the state initially anticipated the county receiving a loan through tax-exempt bonds. But, that places restrictions on how the loan can be repaid, and likely means the county couldn’t pass the burden to private developers through county-collected mobility surcharge fees.
The city of Zephyrhills also agreed to pay up to 10 percent of annual loan repayments, if the county had to dip into its coffers for expenses.
The county had turned to the state bank as a last resort to fund two more lanes on State Road 56.
Unless the state transportation department can shift the county’s request into a loan pool for non-tax exempt bonds, the agreements with developers can’t work, Goldstein said.
The county also has a second concern about potential liability for cost overruns.
Cone & Graham representatives agreed to absorb expenses, if there are cost overruns with building the additional lanes. But, Goldstein said the state transportation department has a caveat. The agency won’t extend that protection in the event the company is fired, and a new contractor hired.
That would leave the county on the hook for unexpected payments.
“We’re hoping FDOT can resolve these two issues, so we can move forward,” Goldstein said.
The idea for the state loan arose after a February town hall meeting in Zephyrhills, where residents and city officials lobbied the department and state lawmakers for help. Many view a four-lane State Road 56 as an economic driver for more commercial and retail development.
Among the largest land tracts along the route is the Two Rivers Ranch, with about 3,500 acres. About half of the 6.7-mile extension would cut through the ranch. Thousands of new homes, shops and industries are anticipated there and within other new developments still on the drawing board including Wyndfields.
One development – Wesley Chapel Lakes in the Meadow Pointe subdivision – is under construction. Based on a prior agreement, the county has received between $300,000 and $400,000 in payments, but might not be able to recoup additional funds, despite the increased costs of road construction.
Published January 6, 2016
