Toll Road Sale Drives Hummer of a Question: Why?
Thursday, September 06, 2007 at 1:17 pm
Part one of a multi-part series on Colorado toll roads.
Local activists are calling it the “Broomdoggle.”
The sale of the financially troubled Northwest Parkway to Brisa Auto-Estradas de Portugal S.A. and Brazilian partner, Companhia de Consessoes Rodoviarias (Brisa/CCR), has residents and public officials alike up in arms. For $503 million and another $100 million in future incentives, the pair of foreign interests got a 99-year lease of the public toll road that stretches through Broomfield County. The massive amount of money put up by Brisa/CCR represents almost 90 times the $6.7 million toll revenues the parkway brought in last year.
The sale also seems to have bought them a truckload of headaches.
The road has consistently fallen far short of its traffic and revenue projections since it opened in 2003, sometimes as much as 50 percent. The Northwest Parkway Public Highway Authority was formed by the city and county of Broomfield, Weld County and Lafayette in 1999 with the hope that their then growing communities would benefit from a direct road connection.
But the public balked at paying the $2 toll to ride the length of the road. Commercial vehicles, which pay higher tolls based on the number of axles, also avoid the tolls by driving nearby free public roads.
And the rest was history. Locals joke that they can let their children ride bikes down the center lane because there is so little traffic.
Now, questions abound about the probity of the deal for the lightly traveled 9-mile link between I-25 and the Boulder Turnpike. Lots of people and entities seem to be counting on windfalls — except the public who will be paying 50 percent more to drive the road when Brisa/CCR’s ups the toll to $3 per car when the deal is completed next month.
- Northwest Parkway and its authority board not only wash their hands of the responsibility of operating a failed toll road, they stand to collect up to $100 million if long-planned extensions of the current road are constructed on Brisa/CCR’s timeline
- Current bondholders will be paid afterall thanks to the $503 million cash infusion by Brisa/CCR
- The parkway authority avoids a potentially humiliating default on $500 million in bond obligations
- Brisa/CCR is using the purchase as its first entry into what it considers a lucrative U.S. market to add to its international portfolio of toll road operations
- Six non-executive Northwest Parkway employees will receive severance packages of 12-month salary and benefits if they are not offered positions with the new private conglomerate.
Toll Roads News.com also notes that the Brisa/CCR deal’s success hinges on the City of Broomfield’s ability to convince neighboring communities to put scarce tax dollars and public land into a long-planned extension of the road through Arvada to Golden. On a 9-1 vote, Broomfield City Council last week agreed to do Brisa/CCR’s bidding with visions of trickledown from the Parkway authority’s cash incentive of up to a cool $100 million should a new southwestern leg of the road be built — $40 million for a 2.3 mile extension past the Boulder Turnpike to SH 128 and another $60 million for the whole shebang down to the northern border of Golden.
The Northwest Parkway already connects to the east of I-25 with its sister toll road E-470, another lightly traveled throughway to the Denver airport and eastern plains that is also not meeting its wildly over-estimated revenue projections. Linking the parkway to C-470 on the western edge of the Denver Metro loop via a tolled portion along SH 93 has met stiff opposition from Golden area residents.
Rob Medina, president of Citizens Involved in the NW Quadrant, likens the strong-arm tactics to desperation:
Broomfield has reached a new low for local government. It’s not bad enough they made a poor decision to financially support an ill-conceived toll road, but now they have become an agent for a foreign company to force an ill-conceived toll road on its neighbors.
The “failure” of the NW Parkway has cost Broomfield taxpayers. Citizens have been saddled with a huge debt, and their government is scrambling to find a way out. I’d be concerned if I was a Broomfield resident. What ever happened to fiscally conservative government? The original data said the NW Parkway would be viable, but it’s a well know fact that toll road officials lied to Wall Street to make a bad deal look good. I’m sure Broomfield officials were well aware of this tactic. If Broomfield officials worked in
the private sector, they would have been fired a long time ago, and if Broomfield voters are smart, they’ll make a change.
Medina’s group points to 20 years of transportation planning data at a cost of tens of millions of dollars of taxpayer dollars that keeps coming back to the same conclusion: the proposed toll road extension would be a boondoggle for Golden and Arvada.
NEXT: This isn’t the first time a Colorado toll road has found itself in the center of controversy. And Steve Hogan, the soon-to-be-departed executive director of the Northwest Parkway, seems to keep finding himself knee deep in it.