Judge rules tolls can be raised to up to $5 on Garcon Point Bridge

Annie Blanks | Pensacola News Journal

A Tallahassee judge ruled Wednesday afternoon that the Florida Department of Transportation is obligated to raise tolls on the privately owned Garcon Point Bridge in Santa Rosa County, a move that could see tolls increased from the current rate of $3.75 per axle to $5 per axle.

The judge ruled against the Florida Department of Transportation and in favor of UMB Bank, a Kansas City, Missouri, corporation that represents the bond holders who own the bridge. The lawsuit, filed last year in Leon County, sought to direct FDOT to raise the bridge tolls in order to pay off bonds, which are currently in default in excess of $100 million.

The state of Florida and the bond holders have been locked in failed negotiations and ongoing disputes for several years over payment of the bonds, without resolve. Ultimately, the solution had to be handed down by Leon County Circuit Judge John Cooper on Wednesday.

More: Pensacola Beach tolls could go cashless in 2020, but beach roundabouts could be in trouble

State Sen. Doug Broxson said he'd tried for seven years to come to an agreement with the bond holders, to no avail.

“This bridge was built with a faulty traffic study from the very beginning that put it into a financial tailspin,” Broxson told the News Journal on Wednesday following the judge's ruling. “This is what happens when privately owned public structures go bad. And I regret the fact that we have no power to dictate to the owners of the bridge the future toll and use of that bridge.”

Maria Cheng, a spokesperson for MC Advisors LLC, a group of bond holders, said in a statement Wednesday that they were pleased with the judge's ruling.

“We are pleased with Judge Cooper’s ruling, which confirmed FDOT’s role and responsibilities under the Lease-Purchase Agreement, as agreed to by FDOT when the bonds were first issued," Cheng said in the statement. "The bondholders made several unsuccessful attempts to resolve this issue outside of the court by offering alternatives to FDOT, the Legislature, and other stakeholders. However, all alternatives were rejected and resulted in bondholders losing millions of dollars in additional toll revenues due to FDOT’s failure to increase tolls.

"Today, the judge agreed with the bondholders and FDOT’s own traffic consultant and has ordered the implementation of the toll increase," the statement continued. "The bondholders remain willing to explore these previously-offered alternatives or other reasonable solutions.”

FDOT officials said in a statement that they are reviewing the judge's ruling and would continue maintaining and operating the bridge as they have for the past 20 years.

"It is unfortunate the toll collections on the Santa Rosa Bay Bridge Authority’s Garcon Point Bridge never met the consultants’ projections; however, it is clear the bridge serves a public purpose as evidenced by the more than 2 million vehicles that crossed the bridge in 2018," FDOT spokesman John O'Brien said in a statement emailed to the News Journal. "The Department believes it has and continues to fulfill its obligations, including paying all costs and maintenance of the bridge and will review Judge Cooper’s ruling to raise the tolls in the absence of a functioning authority on the bridge.

"CDM Smith issued a 2018-19 Traffic and Revenue study that finds the tolls should be raised $0.75 and the Department will continue to work with the Legislature, the bondholders and UMB Bank to attempt to reach an amicable long-term solution that is agreeable to the citizens of the state of Florida," the statement added.

History of the tolls — and toll raises — on the Garcon Point Bridge

Bonds to build the Garcon Point Bridge were first issued to the Santa Rosa Bay Bridge Authority in 1996, totaling approximately $95 million, according to court documents. The 3.5-mile bridge spans East Bay and was intended to help reduce traffic on U.S. 98 in Gulf Breeze and on the Three Mile Bridge. The Garcon Point Bridge was completed in 1999.

But the bridge failed to meet revenue expectations. The Authority raised the tolls four times from 1999 to 2011, and it has remained at its current rate of $3.75 per axle since 2011. FDOT has maintained and operated the bridge using taxpayer money since it was built.

The Authority eventually disbanded and hasn't held a meeting or had an executive director in several years, so UMB Bank is currently representing the bond holders who are still seeking to get their money back from the bridge's construction. The defaulted bonds total upwards of $128 million, and increase at a rate of $6.8 million per year, court records show.

In 2014, the then-trustee, FTI Consulting, performed a traffic study to determine what tolls would be sufficient to pay off the defaulted bonds. The study indicated that it was necessary to increase the SunPass toll from $3.75 to $4, the cash toll from $3.75 to $5, and reduce the SunPass discount for heavy users from 50% to 25%.

From 2018: Broxson: Tolls on Garcon Point Bridge won't be lowered, could increase

FDOT declined to raise the tolls, so in December 2018, UMB Bank — which now represents the bond holders — took FDOT to court in Tallahassee. The lawsuit had two parts: the first sought to force FDOT to raise the tolls to a maximum of $4 for SunPass users and $5 for regular users based on the traffic study, and the second sought back damages from FDOT in excess of $75 million in lost revenue from when the trustees say the tolls should have been implemented in 2014 and 2017.

The judge on Wednesday ruled in favor of UMB Bank on the first part of the suit, but declined to rule on the second part of the suit, saying he needed more time to consider it.

Based on the judge's ruling, the tolls could now effectively be raised at any point in time. Broxson said that increased tolls would hurt working people the most, like drivers pulling a tandem truck or a trailer with multiple axles, and people who cross the bridge multiple times a month and receive a frequent user discount.

"We have a privately owned bridge that's being maintained by the state of Florida," Broxson said. "There's a lot of resentment because we're having people who do not live in this area dictating to us, without any public input, on the value of that bridge. That's going to be a hard nut to crack if they impose a $5 fee instantly, which they can do now, according to the judge. There will be a backlash. Now, how long that will last, and how forgiving the public will be, I don't know, but I think it will definitely have an impact on people who live here."

Annie Blanks can be reached at ablanks@pnj.com or 850-435-8632.