Adobe Stock / sea and sun

The Reason Foundation a non-profit libertarian think tank, has released a study titled Asset Recycling To Rebuild America's Infrastructure, which finds asset recycling via long-term leases of America’s largest existing toll roads, bridges, airports, seaports, water and wastewater facilities, and university parking systems could generate $720 billion to $885 billion. The potential funds would help support already constrained public resources in addressing aging and deteriorating infrastructure.

"The basic idea calls for long-term leasing of existing facilities to well-qualified private partners and 'recycling' the lease proceeds into new, but currently unfunded infrastructure projects. The company pays most or all of the annual lease payments upfront, and the government uses that money on its unfunded infrastructure needs. Arguably, no other tool holds as much promise in addressing America’s infrastructure deficit," says Robert Poole, Director of Transportation Policy at Reason Foundation and author of the new report.

Leasing the 61 largest U.S. airports to private partners could generate between $250 billion and $360 billion for state and local governments in gross upfront lease payments. Under the leases, the private companies would spend an estimated $100 billion on capital improvements over the first five years, bringing the total private-sector investment in airports to between $350 billion and $460 billion. As examples, the study cites Baltimore/Washington International Thurgood Marshall Airport (BWI), which it finds could generate between $1.6 billion and $2.3 billion in net lease proceeds (after paying off existing bonds), and Louisville International Airport (SDF), which could be leased for over $600 million in net lease proceeds.

The 42 largest existing toll roads and bridges could generate $175 billion to $230 billion in gross upfront lease payments for state and local owners and would prompt another $10 billion in improvements during the first five years, according to the study. The George Washington Bridge connecting New York and New Jersey could yield between $10 billion and $17 billion in net lease payments, after debt repayment. Leasing the Illinois Tollway system could generate between $11 and $20 billion and the Bay Area Toll Authority's seven California-owned bridges could produce between $2 billion and $8 billion in net upfront lease payments.

The nation's ports could be leased for up to $50 billion and would produce an estimated $9 billion in capital improvements over the first five years. The study concludes leasing the Port of Houston could yield net proceeds of between $1 billion and $1.7 billion and the Port of Tampa Bay could generate $272 million, after debt payoff.

The report also estimates that $110 billion could be generated by leasing aging water and wastewater systems around the country. An additional estimated $60 billion worth of much-needed improvements would be undertaken by the private partners, bringing the total private sector investment value to around $170 billion. The Las Vegas Valley Water District lease could yield up to $729 million in net lease payments and the Mobile (AL) Area Water and Sewer could net up to $328 million.

In addition, the study estimates $60 billion in net economic value could be generated from state university parking recycling initiatives. For example, long-term parking leases could produce up to $276 million at the University of Georgia, $222 million at Georgia Tech, $192 million at the University of Mississippi, $180 million at Mississippi State University, and $108 million at Southern Mississippi. This money could be reinvested in higher education or infrastructure projects.