Lake County Commissioners joined their LaPorte County counterparts on Monday, adopting resolutions entering into a partnership aimed at creating a nonprofit that would allow the bidding for the Indiana Toll Road to continue.
Lake Commissioners unanimously approved the measure in a special meeting Monday. LaPorte commissioners last week approved the resolutions. The Lake County Council is set to consider the measures Tuesday, while the LaPorte County Council will consider it in a special meeting Wednesday.
"Thank you to our soon-to-be partners in LaPorte County for the action they have already taken...We appreciate the effort you put forth," Commissioner Michael Repay, D-Hammond, said.
LaPorte led the charge for the counties to bid on the bankrupt Indiana Toll Road after officials from both counties in November approved pursuing the creation of a nonprofit corporation in order to do so.
A team including Krieg Devault, special council Goldstein & McClintock, financial adviser Piper Jaffray and bond underwriter Bank of America Merrill Lynch assembled to create the terms of the agreement creating the nonprofit as well as the details of the bid package.
The non-profit entity known as the Northern Indiana Toll Road Authority Inc. (NITRA) represents the interests of each county. NITRA would sell the non-recourse Toll Road revenue bonds to pay for the multi-billion dollar package.
LaPorte attorney Shaw Friedman said that with the use of non-recourse bonds, taxpayers in neither county would be held liable if the Toll Road doesn't generate enough money to pay off the debt.
"In no event, in no circumstance will the county or its taxpayers be held liable," Friedman said.
If for some reason the toll road does not produce enough revenues to make its bond payment, that payment would be pushed back to the end of the lease term and repaid at that time. The last 27 years of the 67-year lease have no scheduled debt service.
The counties join three other teams bidding for the Indiana Toll Road lease, according to industry newsletter InfraAmericas. One team is IFM Global Infrastructure Fund. A second team includes the Canada Pension Plan Investment Board and infrastructure managers Cintra and its parent company Madrid-based Ferrovial. The final team is Barcelona-based Abertis, a toll road manager, and Borealis Infrastructure of Toronto.
If successful in their bid, both Lake and LaPorte counties stand to receive $5 million each fiscal year for founding NITRA. The payment to the counties comes after operation and maintenance costs but before debt repayment. If the two counties are successful in their bid, they could each receive their first payment by summer, Friedman said. Those payments would continue annually throughout the term of the lease.
NITRA would be overseen by a board of directors consisting of each county council and commission president. Each of those members would have one appointment. The governor would have one appointment and the yet to be selected Toll Road operator would be the final member.
Friedman said his hope is that the nonprofit's bid to obtain the toll road is successful. If it is, the first founder's payment of $5 million for each county would be made at that time with the closing of the bond sale.
"There is a lot at stake," Friedman said.
Commissioner Gerry Scheub, D-Crown Point, said there was a lot of negativity after a Spanish-Australian company originally leased the Indiana Toll Road from the state. If the two counties' proposal is successful, the Toll Road would be locally owned again.
"This is not like the riverboats. This is local," Scheub said. "It's staying in-state where it belongs."