Is Gloomy Rickenbacker Bond Report an Opportunity?

In this file photo of the William Powell Bridge, a part of the Rickenbacker Causeway, a small plant is seen growing out of a support beam, July 15, 2019. The Causeway is sole roadway in and out of barrier islands of Key Biscayne and Virginia Key to Miami. Officials in Key Biscayne are concerned about the environmental resiliency of the Causeway. (Key News/Tony Winton)

A somewhat gloomy report on the financial future of the Rickenbacker Causeway may have opened eyes about the threat of sea level rise  — but in Key Biscayne, leaders say the assessment of the William Powell and Bear Cut bridges could breathe life into a proposal that would see the Village operate the 3-and-one-half mile long roadway.

The Causeway is the only land route in and out of Key Biscayne and Virginia Key.

To be clear, the report by the Fitch Ratings agency for the Rickenbacker remains at “BBB+” with a stable outlook. 

But as part of a global response to investor concerns about sea level rise, Fitch upped the causeway’s environmental score a notch from “3” to “4” on a five-point rating scale. According to the scale, the difference is that a “3” indicates a “minimally relevant” risk, while a “4” means “relevant…not a key rating driver.” 

A rating of 5 means the risk actually drives a rating change. 

 “It’s not something we are concerned with at this moment, but it’s something we always monitor,” said Fitch Senior Director Chad Lewis. 

“This could be an opportunity,” said Village Manager Andrea Agha, noting the Village’s interest in a plan to redevelop the Causeway. Earlier this year, Mayor Mike Davey asked the Village Council to seek proposals on how the Village could set up a plan to run the Causeway,  but the idea was deferred by other Council members who wanted to hear more from the investment community before acting. 

Davey, however, says he continues pursuing the idea of a private-public partnership, known as a “P3.” His idea is to find common ground with all the different governments that have interests in the Causeway. 

“A smart design that gets us a sustainable, resilient Causeway that gets everyone where they want to go,” he said of his goal. 

“We need to be looking into the future,” he said. “We are having excellent conversations.” 

The Fitch report noted that revenue is down 4% for the first eight months of the fiscal year, a decline it attributed to the loss of the Miami Open, with a partial offset from the Ultra Music Festival. 

About 90% of the revenue is from visitors; toll revenue from those on annual plans such as residents and employees has provided less revenue growth. 

Even with all that, however, Fitch analysts said the Rickenbacker generates about a $6 million annual surplus after obligations are met. Key Biscayne will get $365,000 this year, Agha said. 

Fitch said it took a conservative approach to future revenues, starting with a half-percent increase for cash toll revenues but gradually declining because of extreme weather events. It said the causeway had a “volatile traffic history dependent on leisure traffic.” 

“This adds to the importance of what is currently there,” Davey said. “I don’t think there are any obstacles we can’t overcome.”