Developer available Got a $5m to $30m toll project?

DEVELOPER AVAILABLE

Got a $5m to $30m toll project?

“This guy hasn’t put a foot wrong yet. He seems to be able to pick good projects, get them approved and built quite quickly and economically. People like what he does. I’m impressed.” So speaks Steven Harrison, transp planner at the metro planning commission in Montgomery, Alabama about Jim Allen, CEO of United Toll Systems LLC of Wetumpka AL, who has launched two highly acclaimed private toll projects in the state. A smaller toll bridge opened 3 years ago in Montgomery (state capital, area pop 320k)seems to be a success.

In a few weeks, if the weather gives them a break, UTS will open the Alabama River Parkway — a new toll commuter route between the city of Montgomery and bedroom suburbs of Elmore Co to the north. Presently the 60k people up there are forced to take a C-shaped journey onto an overcrowded interstate I-65, or go way out east and back west. The new pike will give them a direct route into town from the north and northwest. Then before the summer UTS should be opening another pike, the Black Warrior Parkway, in Tuscalloosa AL.

42 yrs old, with a business degree, Allen has a bunch of private companies mainly in land development. Until now he’s kept a low profile guy to remain focussed on his two construction jobs with some $50m at stake.

Now he says he’s looking for new projects and welcomes inquiries. He’s not competing with the “big guys.” He thinks he has quietly established a solid track record and has a formula for toll projects in the $5m to $30m price bracket. His company will do the lot — work the concept, handle government relations and legal issues, buy the land, overcome environmental and neighbor objections, raise capital, get the permits, design, build, and then operate. Or he’ll go into partnerships. He’ll run toll systems for people. He’s flexible but says he likes to do as much as possible because, he says, “business can do it faster and better and help out local communities, and we can make money together.”

He isn’t overly confident though: “It’s not an easy business. You spend millions and you try to make it back in quarters.”

Allen started in tolling because he could see development potential in a tract of attractive land across the Tallapoosa River northeast of Montgomery. But it had no access. He first did what every developer usually does. Asked governments to build it. Not for years, they said. That led him to think “Why don’t I build it?” So he built a modest 2-lane toll bridge and matching roads for $3m. He saves people 15 minutes with this rather grandiosely styled Emerald Mountain Expressway. The land has sold well, and he’s now building a golf course there. The toll bridge is heading toward profitability, he says.

The much more ambitious toll bridge nearing completion over the Alabama River 12km west is a 2x2-lanes project that has cost Allen and a local bank $12m. Local governments and the state have collaborated with $8m of connecting roads for a total expenditure of $20m. This for a project which the state previously had costed at $55m — which it didn’t have.

Federal rules would have required a much higher longer bridge to avoid the 100-year flood plain. Allen told a local newspaper he expects his bridge to flood and to be closed for up to a week every 5 to 10 years. He says: “You get to use it the rest of the time.”

UTS has another 2x2-lanes bridge and connector roads 3/4 complete in Tuscaloosa (pop 160k) in the west of the state. Due to open late spring it will be the city’s third bridge over the Black Warrior River into twin-city Northport. The Parkway will be a new access route in the west of the area and UTS is spending $17m. Three local governments are spending $2m and the feds and state are supposed to build a $10m interchange on I-59 to provide the Parkway with a direct connection to the interstate system. Major rationale for the UTS tollway/bridge is to open up new commerical and industrial land, improve airport accessibility and to act as a bypass allowing traffic to avoid congested local streets.

In all three cases UTS is charging a 75c toll for cars and trucks per axle, but Allen says in future he wants to try congestion pricing via discounted tolls outside rush hours. He has coin machines, electronic toll collection, and toll collectors on a limited schedule. The company has a core staff of 20, he says, including experts in law, finance, engineering, electronics and construction. They have developed their own toll management software.

UTS’ three projects are not concessions from a government. UTS bought or got 99-yr leases on the land and built with its money on its land. Governments spent their money on the road connections on their right-of-way. His company is therefore free to set its own tolls without government regulation. Allen says governments’ power of eminent domain could allow them to take him over if they chose to, but says just like any other business, competition limits what he can charge.

“If we ask too high a toll, our customers will go away.”

Atlanta action: UTS is looking at other similar projects in 5 states. North of Atlanta GA between Cobb and Fulton counties, UTS has proposed a $20m 4-lane toll bridge over the Chattahoochee river near Morgan Falls. This would replace a crowded and dangerous 2-lane bottleneck Johnson Ferry Road bridge. Mitch Skandalakis chair of the Fulton Co commission has visited the UTS projects in AL and is an enthusiast for the Chattahoochee R toll project. Wayne Shackleford state DOT commissioner favors it also. The two counties are doing a $250k study.

In Baldwin Co southeast of Mobile AL on the Gulf of Mexico keys two new bridges are proposed over the Intracoastal waterway which UTS is examining. They would improve regular access for beach and resort communities at Orange Beach and Gulf Shores, as well as facilitating hurricane evacuations. In New Orleans he has been involved in discussions on a major new bridge and in Baton Rouge on a bypass toll highway. In Lexington KY there is discussion of a possible toll project.

A senior official in the Kentucky DOT told us he’d made some inquiries about UTS and was recommending municipalities with unfunded projects that they see what UTS could do for them. (Contact Jim Allen, UTS 334 567 2001 jim@unitedtoll.com)