The campaign to turn America's highways back a century to when they were privately run - only with new electronic tollbooths that will silently tap your wallet as you drive - is shifting into high gear.
"New York and Connecticut are rolling along with bills and hearings," Frank Rapoport, Berwyn-based partner at McKenna Long & Aldridge L.L.P. and a busy proponent of "public-private partnership" ("P3") - the sales of state assets to private interests - told me. "In Pennsylvania, look for a House bill to hit the Capitol floor on June 6 and move on to passage."
Previous Pennsylvania proposals, including bills sponsored by the current head of the House Transportation Committee, Rep. Richard Geist (R., Altoona), have failed at least three times in recent years. Lobbyists and contractors have been more hopeful since Geist's committee endorsed the latest version in March, by a 21-3 vote, after vetting by Gov. Corbett's highway officials and labor and business groups.
But since then it's been hung up by disputes over prevailing wages on road jobs, House legislative analyst Greg Grasa told me. Federal rules require union-scale wages on taxpayer-funded roads. Republicans want that out of the state law so they can cut workers' pay if federal law changes. Democrats want a state guarantee on wages. Still, Grasa says supporters are "very optimistic" this time.
What about New Jersey, where ex-Gov. Jon Corzine's inquiries into selling the Turnpike and the Atlantic City Expressway came to grief?
"[Gov. Christie's] folks want a bit of education on P3 first," Rapoport told me. Investors, builders, and lobbyists will gather at an event billed as "Meet the Players" at the Trenton Marriott on June 7 to plot their campaign.
Rapoport and his colleagues are handing out lists of key government contacts and motivated contractors, along with lists of the roads most likely to get sold. In the Philadelphia area, their favorite future private toll roads include: Route 422 from King of Prussia west toward Pottstown; I-95 along the Delaware River; and I-476, the Blue Route through Delaware and Montgomery Counties.
The proposed bill wouldn't directly ensure the lease or sale of the roadways. It would leave that to a committee controlled by the governor and the General Assembly.
PSU alumni for sale
Energy Plus, a West Philadelphia-based electricity retailer, says it has cut a deal with the 360,000-member Penn State Alumni Association that gives the company names and addresses for Penn State graduates in Pennsylvania, New Jersey, New York, and other states. Why? So the firm can try to sell them residential electric service that gives a cut of their monthly bills to the association's treasury.
A similar deal with the credit-card lender MBNA Corp. (now Bank of America Corp.) raised $30 million for the alumni group in 1994-2010, as grads ran up charges on their Nittany Lion credit cards and the alumni pocketed a slice for booster programs, according to records made public last year.
Energy Plus boss Kevin Kleinschmidt, a former credit-card marketing executive, declined to say how much the booster group would get for selling members' contact information. Alumni officials stressed the program was voluntary and declined to comment on how much the association would receive.
The program offers sweeteners such as a $25 sign-up bonus and a 3 percent discount on Energy Plus' usual rates, which vary with market prices.
Shire Plc's $750 million deal to buy California-based Advanced BioHealing, maker of Dermagraft "regenerative skin substitute," means a $140 million-plus payout for Safeguard Scientifics, of Wayne, one of Advanced's biggest investors.
That's a fat bonus for Safeguard, which paid just $10.8 million for its Advanced shares since 2007, according to analyst William Sutherland at Boenning & Scattergood in West Conshohocken. U.K.-based Shire (its U.S. headquarters is also in Wayne) is also paying about one-quarter more than owners had expected to collect in Advanced's planned initial public stock offering, Sutherland told clients in a report.
Safeguard has raised nearly $400 million from asset sales in the last few months, which puts pressure on the company to keep deals flowing, Sutherland concludes.