I-15 widening project hits speed bump in Las Vegas

CARSON CITY — The future of a massive Interstate 15 widening in Las Vegas is up in the air because of questions from some state lawmakers about the $1.3 billion Project Neon.

Project Neon would widen the freeway from Sahara Avenue to the Spaghetti Bowl. To get the project done more quickly, the Nevada Department of Transportation has proposed a new financing plan, a public-private partner­ship also called a P3.

As part of the project, the state Legislature’s Interim Finance Committee is being asked today to approve a request by the agency to issue $100 million in bonds to buy right of way needed for the widening. The bond proposal will also be reviewed by the state Board of Finance.

It would be the first of several bonding proposals brought to lawmakers to complete the project.

Failure to approve the financing concept would likely slow the project down dramatically, requiring the improvements to be made incrementally over as many as 15 years.

But lawmakers have many questions about the project, from the new financing concept to what kinds of guarantees there are that Nevadans will get some of the construction jobs.

State Senate Majority Leader Mo Denis, D-Las Vegas, a member of the Interim Finance Committee, said he supports Project Neon.

“But there are procedural questions,” he said. “There are questions about whether the IFC can approve that kind of expenditure. It’s a big project. Normally it would have been vetted through the Legislature.”

Gov. Brian Sandoval’s 2013-15 budget did not include any authority to issue new bonds to finance construction needs.

Assembly Speaker Marilyn Kirkpatrick, D-North Las Vegas, who is also a member of the interim committee, said she has a number of questions that need to be answered before she is willing to move forward.

“It’s a new kind of financing and I want to understand it,” she said of the project. “I also want to know what the plan is for Nevada workers. What if we spend $100 million and no Nevadans get jobs.”

Kirkpatrick said she supports the project, but has a duty to ask questions on behalf of Nevada taxpayers. She attended a briefing on the project in September and asked several questions that still have not been answered by Transportation Department officials, she said.

The agency originally planned to bring the bonding proposal to the IFC in February, and Kirkpatrick said she wants to know why there is now a rush to proceed.

If lawmakers need to get questions answered it won’t make a big difference if there is a 30- or 60-day delay, she said.

“There are delays in construction all the time,” Kirkpatrick said.

Senate Minority Leader Michael Roberson, R-Las Vegas, said he too supports the project and is advocating for approval for the bond item at the Interim Finance Committee meeting.

There have been a number of questions raised about the project, but it has been in the planning stages for many years and has been under ongoing review by the state Transportation Board, which includes Sandoval, he said. The financing plan was approved by the board in June.

It is also supported by many business leaders in Las Vegas, Roberson said.

Any delay will slow job creation and cost taxpayers more money, he said. It could also raise concerns by companies vying for the project contract, he said.

Roberson said he has been actively working to alleviate lawmaker concerns so the project can move forward.

“I think it will happen, but there are no promises,” he said.

Project Neon will be the largest road project ever undertaken by the Department of Transportation.

The agency is proposing to use a public-private partnership to get the widening done in only a few years. Otherwise it would take as long as 15 years because the state has limited road dollars.

The 3.7-mile stretch of freeway is the busiest in the state, handing 250,000 vehicles a day.

The agency announced earlier this year the three finalists for the project:

■ Kiewit-Meridiam NEON Partners — Kiewit Development Company &Meridiam Infrastructure Neon, LLC.

■ Las Vegas NEON Ventures — Las Vegas Paving Corporation &Macquarie Capital Group Limited.

■ NEON Mobility Group — ACS Infrastructure Development Inc. &Fengate Capital Management Ltd. &Star America Fund GP LLC.

In the fall of 2014, these teams will be asked to submit detailed information on their plans to provide NDOT with the best value, innovation and efficiencies to deliver Project NEON by the first quarter of 2019.

The agency acknowledges that the use of a P3 is “historical” for Nevada and will allow several phases of Project NEON “to be completed safely, quickly and efficiently with the least amount of interruption to the traveling public.”

“Project NEON is essential to the progression of Las Vegas transportation, economic development and quality of life,” the agency said in a July press release. “As a 20-plus year program of improvements, Project NEON is also expected to create hundreds of planning and engineering jobs and thousands of construction jobs over its lifetime.”

Contact Capital Bureau reporter Sean Whaley at swhaley@review-journal.com or 775-687-3900. Follow him on Twitter @seanw801.