ANCHORAGE — Alaska officials say they will keep working with federal authorities who turned down a state request for a more than $375 million loan for the Knik Arm bridge project.
The U.S. Department of Transportation said it was suspending its review of the proposal, citing issues with traffic and revenue projections. State officials said Monday that they were confident the funding would eventually be approved, the Alaska Dispatch News reported.
“Getting this loan isn’t just a simple pass-fail, it’s a negotiation,” said Judy Dougherty, director of the Knik Arm crossing project. “So we were not surprised by that letter.”
The federal government has rejected the project several times since state officials first sent a letter of interest in 2007, with the most recent coming last month. The bridge would connect Anchorage to land near Point MacKenzie in the Matanuska-Susitna Borough.
“As currently structured, your plan of finance would not have sufficient coverage to withstand stress testing and meet DOT’s requirements,” Shoshana Lew, chief financial officer of the federal transportation department, said in a letter dated Feb. 9. “Therefore, DOT is suspending review of your current (letter of intent) and plan of finance.”
Opponents of the bridge held a news conference in Anchorage on Monday to release Lew’s letter and further challenge the state’s estimates for growth in the region.
“This latest rejection proves once and for all that Alaska doesn’t have a viable financial plan for the bridge,” project critic Jamie Kenworthy said.
He said the state should cut the funding for the project in the proposed operating budget and reallocate the nearly $160 million already approved for it.
A spokeswoman for Gov. Bill Walker referred questions to the state Department of Transportation.
DOT spokesman Jeremy Woodrow said the state would make an announcement if the loan was ultimately rejected but said Lew’s letter didn’t cancel the project.
“We are confident the loan will be secured,” Woodrow said.