By Jim Turner, The News Service of Florida.
TALLAHASSEE — The Florida Department of Transportation agreed to pay $134 million to take control of the long-controversial Garcon Point Bridge over part of Pensacola Bay.
A settlement, dated June 13 and released late Thursday by the department, is aimed at ending years of litigation with bondholders represented by UMB Bank.
The release of the settlement came after the Department of Transportation last week announced it was reducing tolls on the bridge by nearly 50 percent following “back-and-forth negotiations with bondholders” resulting in a settlement that “initiates the transfer of ownership of the bridge.”
The Legislature in 1992 created the Santa Rosa Bay Bridge Authority, which had power to build the bridge and issue bonds. The bridge was known in Tallahassee as “Bo’s Bridge” because it was championed by former House Speaker Bolley “Bo” Johnson of Milton.
In a lease-purchase agreement, the Department of Transportation agreed to operate, maintain and insure the span, with the anticipation that tolls collected by the authority would generate enough money to cover the state’s costs after bond payments.
The authority issued bonds in 1996, with the bridge opening in 1999. But the bridge did not generate enough revenue, a problem that was eventually complicated by the fact that the authority effectively became defunct in 2014.
UMB Bank called for the tolls to be increased and filed a lawsuit in 2018 when the department didn’t comply with the request. Tolls were raised in 2020, after an order by a judge, but the revenue still wasn’t enough to pay the principal and interest on the outstanding bonds.
In July 2021, Gov. Ron DeSantis traveled to the bridge, which crosses part of Pensacola Bay east of Pensacola, to call for tolls to be cut and for the state to buy the span.
State officials indicated at the time the acquisition cost could be mixed into the department’s annual work program and that the Florida Turnpike’s credit profile would allow refinancing outstanding debt on the bridge, with toll revenue being enough to cover operations and maintenance. The Department of Transportation did not immediately respond to a request for information about how the $134 million would be financed.
The 14-page settlement called for the department to pay the $134 million lump sum to UMB on June 17, two days after the toll reductions were announced. In addition, it required the department by July 29 to pay any “previously unremitted tolls or revenues collected for use of the bridge through the lump sum payment date.”
State Chief Financial Officer Jimmy Patronis needed to approve the settlement, which was signed by Department of Transportation Secretary Jared Perdue. The payment was processed June 15, according to Patronis’ office.
The amount of principal, interest and other outstanding obligations on the bonds were estimated at $138 million as of June 15, according to the settlement. In the lawsuit, UMB also contended the state was liable for more than $75 million in damages for not increasing tolls as requested and for an extended suspension of tolls following Hurricane Sally in 2020, but courts rejected the damages claim.
Meanwhile, the state also faced costs to pay for maintenance and insurance on the span without a chance of recovering money until after the bonds were paid off.
“The unreimbursed expenditures by the department as of June 30, 2017, exceeded $25.3 million, which amount is expected to exceed $41.5 million on July 1, 2028, the original maturity date of the bonds,” the settlement said.
The settlement called for the lawsuit to be dismissed after UMB received payment. A docket in Leon County circuit court Friday did not show any activity in the case since March.
The Department of Transportation announced last week that tolls on the bridge dropped from $4.50 to $2.30 for SunPass users and from $5 to $2.75 for cash-paying motorists.
