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We’ve teamed with APM Reports to track proposed infrastructure projects around the country as President Trump prepares his $1 trillion plan. Here’s the first in a series of stories from our partnership.
As President Trump prepares to release a list of projects that could be included in his $1 trillion infrastructure plan, groups are aggressively lobbying to make the cut. Over the past five months, Trump’s team has been quietly soliciting requests from across the country, triggering a torrent of proposals.
APM Reports has assembled a previously undisclosed list of the more than 500 project requests covering 50 states from governors, consultants, contractors, unions and advisers through public records requests and interviews.
The costs of many projects range into the billions of dollars, a blunt reminder that upgrading or adding to the nation’s infrastructure is an expensive proposition.
Many projects submitted by governors focus on transportation – roads, tunnels and bridges. New York and New Jersey are pushing for a rail tunnel project between New Jersey and New York that could cost as much as $25 billion.
California, on the other hand, wants to rebuild its dams, and 12 states want to bring broadband to their rural areas. Washington wants to rebuild its airport, and Texas wants a waterway improved. Projects such as these have historically been funded by government with the goal of widespread social and economic benefit.
Union leaders, consultants and a campaign adviser to the president are judging a project’s value based on different criteria: Does it include private financing? How many jobs would it create? And would its construction go faster if Trump cleared away regulations and sped up permitting approvals? Some of those projects are transmission electricity lines in the Midwest, a high-speed rail line between Houston and Dallas and a major gas pipeline in Alaska.
And infrastructure consultants are enthusiastically advising investors on how to get noticed when it comes to privatization, and a lot seems in play – airports, health clinics and nursing homes run by the Veterans Administration and low-income housing. In fact, consultants discourage the use of the term “privatization.” Instead, they call it “asset reallocation.”
Infrastructure projects pitched to the White House
An accounting of more than 500 infrastructure projects from every state and several US territories, totaling more than $500 billion. Trump has indicated that an announcement about specific projects may come soon. The projects were submitted by the National Governor’s Association, states, the North America’s Building Trades Unions consortium, consultants and an adviser to the Trump campaign. The least expensive project is a proposal to make improvements to a short-line railroad in Louisiana. The most expensive is $45 billion gas pipeline in Alaska. APM Reports gathered the information from multiple sources.
While there’s bipartisan agreement that there should be a greater national investment in infrastructure, there’s sharp disagreement over the financing mechanism and the criteria by which to make choices.
A few Democratic members of Congress have said they support increasing the federal gas tax to help pay for projects. And some Republicans, already lukewarm about Trump’s infrastructure plan, are wary of increasing the deficit.
Trump and his advisers are so intent on accelerating the time it takes to get projects built that the president has suggested that no federal funding will be granted unless states and local communities can start a project within a few months.
“If you have a job that you can’t start within 90 days, we’re not going to give you the money for it because it doesn’t help us,” Trump said.
Dan Slane, an Ohio real estate developer who advised Trump on infrastructure between Election Day and the inauguration, agrees speed is essential. “He’s got to hit some home runs coming out of the box.”
Slane recommended 51 projects to White House officials in January that can be done relatively quickly. A focus on speed, Slane says, will give the president credibility among the public and Congress.
Much like Franklin Roosevelt and Barack Obama, Trump also has mentioned construction building projects as a catalyst to create jobs. “The only way the president is going to create the millions of high paying jobs for blue collar workers is through infrastructure,” said Slane.
No matter the criteria, the choices are broad and give the White House great latitude on how to approach infrastructure. But the White House has offered few specifics about what will be included in its infrastructure plan.
In October, the Trump campaign released a plan recommending $137 billion in tax credits for private investors who bankroll infrastructure projects. The campaign claimed that would generate $1 trillion in spending over 15 years.
Since then, Trump and others have steadily emphasized their priorities: boost job creation, spur private development and reduce regulatory hurdles for developers.
Critics worry, however, that the focus on speed, private investment and job creation could mean the neediest projects could get sidetracked.
Breckenridge, Minn., and its nearly 90-year-old water treatment plant, will most certainly be left behind.
Every morning before Jim Bogenreif starts his job as foreman, he kisses a cross he carries with him and says a prayer. “I started doing that a long time ago. So far it’s helped me out here but I know it’s not forever,” he said.
Bogenreif constantly worries that the Breckenridge Water Treatment facility, which ensures clean water to the town’s 3,500 residents, will fail. Parts are so old, Bogenreif says, the manufacturer asked that they be sent back for use in the company’s museum.
And they’re so rusted, Bogenreif is afraid to touch them. “You pull away one of those flakes and right away she starts seeping and I don’t like that,” he said.
BRECKENRIDGE, MN – APRIL 24, 2017: Patches welded to fix leaks in the aging solid containment basin in Breckenridge’s water plant are heavily rusted.
The city wants to rebuild a new water plant, but leaders worry that the $13 million price tag will send water rates and property taxes soaring. They quickly asked for new bids. “Let’s not buy or build a Cadillac if we think a Ford Taurus will get the job done for us,” said Neil Crocker, director of public services for the city of Breckenridge.
A public official in Minnesota submitted Breckenridge and two other local water projects to the U.S. Environmental Protection Agency. The agency was looking for facilities that could be included on President Trump’s list.
The problem is that Breckenridge is on a long list of projects. Despite the need and the city’s overwhelming support for Trump in the last presidential election – 61 percent of the city voted for Trump – city officials don’t see much help coming from Washington, D.C.
“I don’t think we’re the ones who are really on his radar,” Crocker said.
He says he isn’t relying on President Trump to include Breckenridge in his infrastructure plan, although the $13 million price-tag would be a fraction of Trump’s $1 trillion pledge. Instead, Crocker expects Trump to focus on bigger ticket items – roads, bridges, power lines and dams.
Trump’s pledge to spend $1 trillion on infrastructure would only fund a portion of the national need, according to the American Society of Civil Engineers, which estimates that $4.6 trillion is needed through 2025.
Minnesota has pledged $4 million to help Breckenridge build a new plant, and Gov. Mark Dayton is also working to secure money to help cities like Breckenridge pay for new drinking water and wastewater plants.
Even if Breckenridge’s plant gets built, there are many other water plants in similar shape.
Jeff Freeman, executive director of the Minnesota Public Facilities Authority, says Minnesota communities will need $11.5 billion to improve local water and wastewater infrastructure over the next 20 years. “It’s part of the nation’s critical infrastructure,” he said. “It just doesn’t get as much attention and press as big transportation projects and airports and things like that.”
While cities, counties and states deal with the direct impact of managing their existing infrastructure, a larger lobbying game is being played behind the scenes in Washington, D.C.
In December, the National Governors Association sent a mass email to governors asking them to send five projects that were ready to start. The email said the request was coming from Trump’s transition team and needed to be acted on quickly.
Within a month, the governors responded with a wide range of requests. The least expensive project is a proposal to make improvements to a short-line railroad in Louisiana. The most expensive is a $45 billion gas pipeline in Alaska.
The NGA declined to release its list. APM Reports assembled the list of state requests through public records requests. Slane, who advised Trump on infrastructure matters, submitted his list of projects to the White House in January.
Once Trump took office, other groups also worked to get their projects on the list. North America’s Building Trades Unions (NABTU) submitted a list of 26 projects to Trump, which was first reported by McClatchy.
The group’s executive director, Sean McGarvey, said he wants to see Trump streamline permitting approval for projects with private financing. He says that will give him time to negotiate a plan with Congress that relies on direct public financing. “Beating the drum for his infrastructure proposal while these other projects are getting started I think sends a really positive message,” he said.
McGarvey, of course, has a vested interest in ensuring an infrastructure bill becomes law. His members, which include 14 international building unions, would likely get a lot of work.
Job creation is also the focus of infrastructure consultants looking to mobilize support for their projects. They clearly understand that Trump has made infrastructure a priority for hiring blue collar workers.
At a recent conference in Washington, D.C., the infrastructure consulting firms CG/LA Inc. and Boston Consulting Group released a report that listed job figures for each of the projects on its list. The report said building the 60 projects on the list would generate nearly 250,000 temporary direct or indirect jobs.
Not everybody agrees that infrastructure investment should be used as a jobs creator.
Charles Marohn, an urban planner who formed the organization Strong Towns, thinks a $1 trillion federal infrastructure package is a bad idea. These are bad investments that are going to give our economy “a short sugar rush but will give us all kinds of bad after-effects,” he said.
Marohn said federal investment in major projects will only create further liabilities for cities and towns that are already strapped with the maintenance costs of their existing buildings.
If Trump insists on passing an infrastructure bill, Marohn says, it’s better to focus the money on city improvements like sewer pipe, sidewalks and other existing infrastructure. “You have all these problems. Where’s the money to do that?” he asked.
Norman Anderson, CG/LA’s chief executive officer, met privately with White House officials in April to discuss their plans. He said he’s pushing them to first consider private investment. The plans in that category include high voltage transmission lines, efforts to rebuild the nation’s ports and airports, and a transit project in Texas. Anderson said Trump’s advisers responded positively, and that has private investors excited. “I think we could triple our level of investment in infrastructure without Congress writing a check,” he said.
In addition to focusing on the privatization, Anderson also said Trump could accelerate the approval times for some projects just by highlighting them in an infrastructure bill. He said that would force regulators to put those projects to the top of the pile.
“The power of the president is extraordinary,” he said. “Simply by saying ‘These projects are important to me,’ a lot of the resistance goes away.”
But there are still regulatory hurdles to privatizing infrastructure in some states. Thirteen states have not passed legislation that would allow public-private partnerships to operate, according to Moody’s Investors Services.
And private investors are not going to build the projects without a return on investment, which might come from tolls for a new road or higher utility rates for an energy project, for example.
Greg DiLoreto with the American Society of Civil Engineers says that difference is important.
“Financing infrastructure is not the funding of infrastructure,” he said. “Financing is access to capital to do that funding, but at the end of the day you have to have cold, hard cash to build these projects that need building…”
Some projects won’t be good at attracting hard cash, though they might be greatly needed. The worry is that without direct public investment, those projects will go to the bottom of the list, or disappear entirely.
The emphasis on private financing also could set up a showdown with Democrats in Congress, who want to see a direct public investment in projects.
Trump’s attempts to cut the time it takes to get a project approved won’t work everywhere. Consider the dispute between two states over a flood diversion project in the Fargo, N.D., area.
North Dakota Gov. Doug Burgum and Fargo Mayor Tim Mahoney are lobbying to include federal funding for the project in Trump’s infrastructure plan.
Mahoney says he and several other members from the Fargo/Moorhead area met last month with Mick Mulvaney, director of the Office of Management and Budget, and lobbied for funding.
Mulvaney reacted with enthusiasm and pushed a critical issue for the president – speed. “He asked if we could build in four versus six years,” Mahoney said. The project also appeals to the White House because of the public/private partnership model.
The plan relies on $450 million in federal funds and nearly $1.7 billion from North Dakota. It also relies on a private developer to spend $400 million in upfront costs. In exchange for future sales tax payments, the developer will also commit to maintaining the project for 30 years.
Mahoney says Mulvaney told him he was going to highlight the project to the infrastructure experts in the White House. “He found it initially very interesting that Moorhead and Fargo are working on this project, and he thought that the way in which the locals are picking up the tab is great,” he said.
Minnesota officials, though, aren’t as enthusiastic. The state is suing in federal court to stop the project.
“I don’t think it’s very prudent to be spending public dollars right now,” said Tom Landwehr, commissioner of the Minnesota Department of Natural Resources.
Minnesota denied a permit that would allow construction of the project in Minnesota. Landwehr says his agency’s concern is that the project will protect North Dakota land that is already in a floodplain at the expense of Minnesota land that has never flooded.
The DNR is requesting a federal judge immediately halt construction of the project. He said Trump and Congress should look to invest first in projects with universal backing.
“I would certainly put greater emphasis on those projects where there is unanimous support and I don’t expect any sort of legal challenges than I would put support on a project where there is likely to be litigation for some time,” he said.
The U.S. Army Corps of Engineers, which is managing the project, says it doesn’t need Minnesota’s approval since it’s a federal plan.
The dispute showcases the problems Trump will have when it comes to prioritizing projects on infrastructure – that is, a priority for one state may be problematic for another.
But it’s clear the flood project is getting attention in Washington. The Fargo/Moorhead flood project appeared on two wish lists including CG/LA’s list and a list by Slane.
Slane says he supports the project because it highlights a security need – protection for a region that has faced severe flooding several times over the past two decades. “What drove it was all the damage that flooding can do and how we’re much better off trying to prevent it,” he said.
Slane acknowledged, though, he didn’t know about the legal dispute between Minnesota and North Dakota.
Other high-profile projects listed from around the country are entangled in legal and political problems, too.
A proposed high-power transmission line that would deliver wind energy from Oklahoma to several southeastern states is under fire. The federal government approved the line in 2016 despite objections from landowners and the Arkansas Congressional delegation.
Since then, several landowners have sued to stop the line and several members of Congress introduced legislation that would require projects to receive state approval. Officials representing the company believe the line will be approved.
Another proposal that would allow a private company to move water from the Mojave Desert to residents in southern California is also tangled up in state and federal regulations.
It isn’t certain when Trump will release his plan. It also isn’t certain that Congress is going to embrace it, despite Republican control.
*SOURCES AND METHODOLOGY:
Estimates: Cost estimates come from data submitted to the NGA and the Trump administration. Not every project included a cost estimate.
State: Data on infrastructure projects gathered through public records, press releases, and social media accounts. APM Reports received data from 44 states. Three states submitted projects to the NGA but did not provide APM Reports with any information: Arkansas, Delaware and Massachusetts. New Jersey may have submitted more projects to the NGA than noted here. State officials there released details on one project to APM Reports but declined to release data on other projects they may have submitted. Georgia and Ohio confirmed to APM Reports that they did not submit lists of projects to the NGA.
NGA: The National Governor’s Association data was compiled by the NGA and supplied to APM Reports by Dan Slane, who advised President Trump on infrastructure matters between Election Day and the inauguration.
Trump adviser: Data compiled by Dan Slane, Trump’s adviser, and was given to the Trump administrations on Inauguration Day.
Unions: Data submitted to the Trump administration by the North America’s Building Trades Unions consortium.
Infrastructure consultants: Data from the CG/LA Infrastructure Inc., a consulting firm, and The Boston Consulting Group.| APM Reports
Corrections and additions: The Seattle Airport expansion entry had errors. It is being proposed by consultants, not Washington state, and is estimated to cost $10 billion. Separately, though, the state is proposing the _Small airport maintenance and modernization_ project, estimated to cost $3.6 billion. (June 12, 2017) · A project was overlooked in South Carolina. The state is proposing to deepen the port of Charleston. (June 13, 2017)
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