The Providence Journal

RIPTA wants to borrow money for new bus hub

- Patrick Anderson

Amid a budget crisis and leadership vacuum, Rhode Island’s state bus system is still seeking new authority to get involved in transit-adjacent real estate projects.

For the second straight year, the Rhode Island Public Transit Authority is backing legislatio­n that would add “facilitate transit-oriented developmen­t” to its statutory mission and allow it to borrow money for such developmen­ts.

The legislatio­n is related to the proposed constructi­on of a combined bus hub and apartment complex somewhere in Providence that would allow RIPTA to move buses out of Kennedy Plaza.

Background on the legislatio­n

In January, RIPTA hired a consortium to plan, promote, design, arrange financing for and build the new hub in a location it would help determine.

The I-195 Redevelopm­ent Commission has suggested putting the hub on land it controls near Interstate 95, an idea backed by Gov. Dan McKee and RIPTA chairman Peter Alviti Jr., who is also the director of the state DOT.

It would allow RIPTA to float 40-year bonds, instead of the usual 30 years, and get rules preventing the agency from borrowing more than 80% of its revenue.

And it would let RIPTA enter into “progressiv­e design build” contracts with bidders that present the “best value” even if they are not the lowest bidder.

What to watch: Transit advocates not happy with plan

Transit advocates are skeptical of the new bus hub plan and the idea of RIPTA going into more debt to pay for it.

“RIPTA is in no position to go into debt,” the Kennedy Plaza Resilience Coalition wrote in testimony to the House Finance Committee. “It has no credit rating and is struggling for funding ... so if the Providence hub relocation project goes bad, taxpayers will be asked to bear the burden, which is likely to be in the tens and hundreds of millions.”

GrowSmart RI and RI Transit Riders oppose mass transit dollars going to the bus hub while the state has not fully funded RIPTA’s operating budget or the system’s Transit Master Plan.

The Conservati­on Law Foundation Senior Attorney Richard Stang wrote that his group “implores you to stop listening to the needs of bid developers and address the needs of the many.”

At a hearing last week, South Kingstown Democratic Rep. Teresa Tanzi asked RIPTA CFO Christophe­r Durand why the bus system would want to borrow money with high.

interest rates so

Looking ahead: RIPTA hopes to borrow through new federal program

Durand said RIPTA’s hope is to borrow through a new federal program that provides financing for transit-oriented developmen­ts at lower rates than treasury bonds.

“Housing is obviously a priority, and I think growing transit is also a priority and the co-locating of those two things would help us grow ridership, but also provide much needed housing,” Durand said. “This is somewhat new for a bus agency to be doing these projects, but there are a lot of eyes on it, because [in] older cities there is less and less space to do these types of projects. So putting them together makes more sense.”

A similar bill meant to help finance and constructi­on of a new bus hub died in the Assembly last year without the focus on finding federal money.

Since then the scale of the increase in borrowing costs has become apparent in projects such as the

Tidewater profession­al soccer stadium, which is paying 8.24% interest.

These financial questions are debated as RIPTA goes through a leadership change prompted by former CEO Scott Avedisian’s resignatio­n in the wake of a hit-andrun driving charge.

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