Goldman Sachs, and Orange Beach to work on new bridge plans

Financial giant will pay half of engineering costs on plans to cross Wolf Bay

Wednesday, August 29, 2007
By RYAN DEZEMBERStaff Reporter

ORANGE BEACH -- A week after approving a $5.7 million contract with a Florida engineering firm to finalize designs for a bridge over Wolf Bay, the City Council approved a one-year deal with Goldman Sachs to share the costs of the engineering.

The move puts Orange Beach and the New York-based financial firm on a path toward jointly developing the bridge and a north-south roadway that will link the resort city to thousands of undeveloped acres and pristine waterfront on the north end of Orange Beach's backbays.

In March, Figg Engineering Group completed a study of the project that found a bridge across Wolf Bay and a new north-south highway could cost as much as $110 million, depending on how far north the road extends. At the same time, though, the study concluded that the project could, over 20 years, generate income up to four times that cost.

Last week's move will allow Figg to proceed with more expensive planning, including further economic analysis and environmental permits. Monday's council vote, which was unanimous with one abstention, means that both the council and Goldman Sachs will have to sign off on each task within the larger $5.7 million contract.
Councilwoman Tracy Holiday abstained from the vote, as she did on the Figg contract, because she said her family owns property that may fall within or near the right of way of the proposed road.

"We're both utilizing information from the underlying Figg contract to develop how this would look at the end of the day," City Administrator Jeff Moon said. "One of the things it will answer is would it be Goldman owning it, the city owning, or would it be a joint partnership, under an authority or a combination of those?"

Mayor Pete Blalock said city leaders still envision a toll bridge but aren't sure how it will be developed and who will own it. While city officials have talked to other firms about partnering on the project, Blalock and Moon said Goldman Sachs was chosen not only for its willingness to invest in the engineering and study, but its experience building bridges on the Gulf Coast.

Moon said Goldman Sachs helped develop:
The Mid-Bay Bridge, which links Niceville to Destin in the Florida Panhandle.
The Garcon Point Bridge, which crosses the eastern edge of Pensacola Bay.

"They are probably one of the most reputable companies in the world on infrastructure and that type of operation; they will bring us a lot of expertise," the mayor said. "By them joining into this venture with us financially, it proves that they believe it's a worthwhile venture, they believe in the future of this area."

According to the memorandum of understanding that the council approved, either party can end the agreement at any point and if -- at the end of the 12 months -- Orange Beach pursues a deal similar to whatever Goldman Sachs has proffered, the city will have to pay the New York financiers $250,000.

Orange Beach has already spent about $416,000 to study the feasibility of the project in addition to paying $3.45 million for the property at the terminus of Alabama 161 that would be the bridge's launch point.

And on Monday the council set a public hearing to talk with residents about the project in general.

That forum is scheduled for 6 p.m. Sept. 24 at the Orange Beach Community Center.
Blalock said that while municipal leaders will work with Goldman Sachs throughout the next 12 months to assemble a long-term deal to build the bridge, he said city officials wouldn't hesitate to stop pumping money into the project if it turns out no "workable deal" is on the horizon.
ORANGE BEACH BRIDGE MEETING
WHAT: Public hearing on plans to span Wolf Bay
WHEN: 6 p.m. Sept. 24
WHERE: Orange Beach Community Center
INFO: 981-6979