Orange Beach Council Approves Bridge Agreement

Thursday, January 19, 2006
By RYAN DEZEMBER
Staff Reporter

ORANGE BEACH -- The City Council this week unanimously approved an agreement with Macquarie that will allow the Australian bank to acquire the local company that owns the Foley Beach Express toll bridge and preserve the public-private partnership on the span.

Essentially, the council had to sign off on the pending deal between Macquarie and the Baldwin County Bridge Co., the firm formed solely to build and manage the toll facility by former gubernatorial candidate Tim James, his brothers, and John McInnis Jr.

As part of the deal, Mayor Steve Russo said, a letter from the city was required "that certifies and represents to Macquarie the terms of the agreement that we had with the Baldwin County Bridge Co. and that that agreement will still be in full force and there are no disputes between us and the Baldwin County Bridge Co. currently."

In 2003 the council agreed to give the bridge company $1.2 million annually for 10 years. In exchange, the city gets a royalty for each car that crosses the span for 30 years and an option to, at the end of that term, either buy the bridge or continue to collect fees for 30 more years.

Also, the bridge and surrounding property owned by James and his partners were annexed into Orange Beach and all full-time residents were given a card, which normally costs $35 a year, that allows them to cross the bridge for $1, or half the typical $2-per-trip-toll.

Orange Beach's position in the deal will not change despite the new ownership, Russo said. City Administrator Jeff Moon told residents during Tuesday's meeting that the provision allowing residents a half-rate pass, which was an important aspect in winning support for the partnership, will also remain in effect.

"This will have no impact on that whatsoever," Moon said.

Besides reciting the terms of the 2003 partnership and acknowledging Macquarie's position in them, Tuesday's agreement includes a clause in which the city disavows any intent or knowledge of plans to bridge the Intracoastal Waterway near the toll span except for a proposed Wolf Bay bridge.

In December, city officials traveled to New York to talk with Macquarie officials about partnering with Orange Beach on that span as well.

Macquarie worked on the 2004 refinancing of the bridge company's $36.3 million debt. That transaction, which came shortly after a Baldwin County circuit judge approved the public-private partnership, totaled $67 million when closing costs, pre-payment penalties and extra funds made available to the company were added to the debt amount, according to a Macquarie news release.

Terms of the pending sale, including the sale price, have not been released, though James said last week that users of the bridge will not notice a change and that he and McInnis will retain their roles in the facility for up to five years.

Also Tuesday, the council voted unanimously to hire Mobile lawyer Robert Campbell III to navigate the city and neighboring Gulf Shores through the legal hurdles in establishing separate school systems.

The cities had wanted to break away from the Baldwin County Public Schools system and form a joint district. But they faced insurmountable political hurdles to do so and instead are attempting to form two separate districts that would contract with each other to share students, administration and facilities.

"Mr. Campbell will be our guide in helping us develop our own school system in the legal and correct way," Councilman Pete Blalock said. "He will help us get to the part where we have our referendum."

Residents would have to approve any tax increase needed for a new school district. A study commissioned by the cities found that Baldwin's beaches could have the most well-funded schools in the state with only a modest property tax hike, and city officials are researching the feasibility of exempting full-time residents from any increase.

The cities had previously hired lawyers with expertise in the formation of school districts from the Birmingham firm Bradley, Arant, Rose and White. That firm, however, has worked for the Baldwin County Public Schools system and needed Superintendent Faron Hollinger to sign off on the lawyers' dealings with Gulf Shores and Orange Beach, which he didn't, Moon said.

Hollinger has said that his preference is to keep the county school system intact.

Like its previous contract with the Birmingham lawyers, Orange Beach's measure allows for up to $10,000 in billing from Campbell -- anything over that amount needs approval from the council. Gulf Shores, which split the bills from the Birmingham attorneys, is expected to approve a similar agreement with Campbell at its next meeting, Moon said.

City officials have said that they'd like to have the district ready in time for the fall start of school in 2007.

In a letter to Russo and Gulf Shores Mayor G.W. "Billy" Duke III, Campbell wrote that doing so would be possible if the process, which includes negotiations with the county system regarding student placement and facility use, begins soon.