CROWN POINT | An Australian consortium claims it has won the bidding war for control of the bankrupt Indiana Toll Road.
That would spell doom for the proposed Lake County and LaPorte County public-private partnership with Wall Street to acquire the highway in a deal that promised $5 million a year in fees to county government and millions more in surplus revenues over the next 66 years.
IFM Investors issued a press statement early Wednesday stating, "IFM Investors, on behalf of IFM Global Infrastructure Fund, has entered into a definitive purchase and sale agreement to acquire ITR Concession Company LLC ...
"IFM Investors has agreed to pay $5.725 billion for (the Indiana Toll Road concession). The closing of the transaction is subject to obtaining necessary third-party and government authorizations and approvals, including the approval of the Indiana Finance Authority."
The Indiana Finance Authority, which oversees the highway lease, said in a news release it has reviewed the bid and is satisfied IFM can meet the responsibilities of leasing the 157-mile-long highway, according to the Associated Press.
Julio Garcia, Head of Infrastructure/North America at IFM Investors, stated in a press release: “We believe this is a unique opportunity to invest in a high-quality United States transportation infrastructure asset. We are committed to maintaining the asset to a high standard that provides maximum availability and usability for customers."
IFM is described in the press release as a global fund manager for 30 Australian nonprofit pension funds.
The announcement caught local officials by surprise Wednesday morning. Lake County Commissioner Mike Repay, D-Hammond, said he was surprised to hear of the deal, since county consultants earlier had said there would be no decision until later this month.
Shaw Friedman, attorney for LaPorte County government and lead consultant for the LaPorte/Lake bid, issued this statement, "We are aware of the press reports this morning concerning IFM Investors’ bid apparently being accepted by the Special Creditors Committee over the County Consortium’s tentative bid.
"I've conferred with our professional team, and they remind me that even if the ... press report is accurate, that the IFM transaction has not yet been approved by the Indiana Finance Authority nor has it closed yet.
"I've conferred with both LaPorte County Council President Mark Yagelski and LaPorte County Commission President Dave Decker this morning. We intend to seek the last of the county-level approvals (Wednesday) evening at a special meeting of the LaPorte County Council so ... if the proposed transaction does not close, our bid would be available as a suitable back-up bid."
Friedman said Wednesday acquisition of the lease won't become official until closing, and prior to that the Indiana Finance Authority could reject the deal, which would reopen the process to the remaining bidders.
As a result, the LaPorte County Council voted 6-1 Wednesday night to OK submitting a final bid from the two counties, just in case the closing doesn't go through.
LaPorte County Commissioner Decker said he was disappointed not only that another bid was accepted, but also the two counties were under the impression there was more time to submit their final bid.
“I would rather have seen local control over the Toll Road," Decker said. "It seems like it didn't work going outside the county before, but that's the way it goes. We took our shot at it and we did our best.”
A source close to the bidding process said the IFM bid was much higher than what the two counties would have offered for the highway.
Lake County Councilman Eldon Strong, R-Crown Point, who voted against the local bid this week, expressed relief. "This new development is better for Lake County. We have so many other issues that we need to deal with before we take on any other burdens," he said.
The state, which owns the 157-mile highway, leased it in 2006 to ITR, an international coalition of businesses that became overwhelmed by disappointing revenues and accumulating debt.