Phoenix toll roads rise from the ashes

Phoenix toll roads rise from the political ashes

People have lost count how many times toll roads have been called for, proposed, rejected and called for again in Phoenix Arizona. In this rapidly developing “Valley of the Sun” as they call a 50ml (80km) square area around Phoenix, there are now about 2.6 million people, almost as many cars, no expressway network, and so a traffic mess.

In the early 1980s plans were drawn up for a government-built 10-expressway 370km (231 ml) grid in the valley. In a referendum called Proposition 300 in 1985 voters endorsed the plan and voted in a 0.5c sales tax that was supposed to finance it. The tax measure yielded much less than predicted and there was anger about the neglect of the eastern part of the valley compared to the west.

A local reporter said that the highway fund was “virtually looted” to favor supporters. It had “squandered millions in cost over-runs, exorbitantly priced right-of-way and (paying) outlandish damage claims” (Art Thomason ‘Arizona Republic’. ) As usual the politicians had overpromised to get political support for their sales tax increase. Then they made the mistake of proposing another 0.5c sales tax increase plus a truly fantastic scheme for a rail system, both of which were defeated by voters in 1994.

The Phoenix Valley has only 317 lane-miles of expressway per million population — by our calculation the lowest of any urban area in the U.S. It has 679 lane-miles of expressway yet 46 million vehicle miles are travelled daily a traffic volume comparable to that of Minneaplois-StPaul which has 1,498 lane-mls expressway, Baltimore 1,382, San Diego 1,700, Boston 1,278, St Louis 1,635 (“Highway Statistics 1994,” FHwA HM-72). To have a comparable standard of highway mobility to those cities the Valley clearly needs to at least double its expressway lane-mileage. Given the understandable distrust of government and its record of misusing tax monies the necessary highway network won’t be government-built as ‘freeways.’

The localTribune newspaper summed up the toll case: “Toll roads have two big pluses: no tax money comes out of our pockets to build them, and they are paid for proportionately by those who use them.”

Investor-built toll roads have been on and off in Phoenix. The most amazing proposal was in 1992 from a consortium led by the HDR engineering group — a $3.75 billion system involving 403km (252 miles) of tollways, about 1400 lane-miles. A complicated law for permitting toll roads had been passed in 1991, and another in 1994 that solicited tollway proposals but 5 years and many millions of dollars in developers costs later not one has laid pavement. After these fiascos two are back in the state selection and approval process:

South Mountain Expressway

(1) The South Mountain toll road proposal has now passed a statutory waiting period without a competitive bid, so it should shortly get state permission to move to the next stage when local support has to be sought. The developer has proposed several slightly different alignments with total costs in the range $338m to $369m. The road is L-shaped in plan forming the southwest quadrant of a planned rectangular shaped peripheral road called Loop 202. 36km long, 4-lanes divided with provision in the middle to go later to 6, the proposed South Mountain Exwy involves a long bridge elevating it across the Gila River floodplain. The developers have proposed alternative alignments for the east-west half of the project: (1) a northern alignment that the state DoT laid down that skirts a developed area (2) a further south alignment within the territory of the Gila River Indian community in an undeveloped area which might be used by the Indians to develop shopping centers, casinos and industrial land. The highway involves about 12 interchanges, 10 of them simple diamonds, and multilevel interchanges with I-10 at each end, which the developer hopes will be built by the state. Construction would begin in 1998 for completion in 2002. In the first full year 55,000 vehicles/day would be expected, generating $24m in tolls growing to 82,000 and about $64m in 2012. The toll would start at $2.50 for cars with e tolling at highway speed as well as manual payment.

The South Mountain proposal is structured to a pattern developed by Interwest and used at its two other toll road projects — Highway 212 in Minnesota (see TR#3, May 96 p5 and TR#8 Oct 96 p4) and the Southern Connector in Greenville S. Carolina (future report). This involves establishing a local community based non-profit company called a Community Highway Association which will own and operate the toll road and issue the debt to finance it. The CHA is run by a board comprising pro highway local notables, movers and shakers who will give the project a local identity and support. Being a non-profit the CHA can issue tax exempt bonds under the IRS 66/20 ruling, mostly used to finance libraries and other civic buildings. Interwest see themselves as developers or project facilitators who bring expertise and organizational skills to get the project over the many regulatory hurdles, environmental assessments, traffic studies and they arrange the finance and construction. They get a fee for their efforts when and if the project is built. They bring in as development partners accountants, engineers, builders and underwriters who donate their time as equity in the venture. The principals of Interwest are Dick Carr a Phoenix businessman and Bob Farris, a former administrator of the FHWA and resident of Washington DC. Farris told us the community highway association form helps gain political support for a project and saves it 2 to 3 percentage points in interest, enabling his group to make projects work which commercial tax-paying finance could not support. Interwest provides local governments the right to buy out the toll road operation at any time if it cares to raise the money to pay off the debt and assume responsibility for running it as a ‘free’ road. That helps assure anti-toll people that the community won’t be locked into tolls. Interwest usually tries to obtain a mix of government and toll-secured capital.

MetroRoad: East Valley expressway and express-lanes

(2) HDR Engineering proposes construction of the San Tan Expressway as a toll road and construction of ‘express’ lanes on five existing or planned state built freeways. The ‘express’ lanes will be free for buses, HOV3 (3 persons or more per vehicle) and will be accessible to other vehicles that pay a monthly express lane access fee that will be verified with a electronic transponder.

The HDR proposal called MetroRoad is couched in tentative and conciliatory terms. Precisely what gets built “will depend on input from local communities and state agencies,” it says, though it is willing to finance 180 lane-miles. The tolling is to be “temporary,” HDR says, and will only last until the bonds have been paid off or are retired by the state, which can occur at any time.

Sample of the HDR publicity: “It (the San Tan) will look and function just like a freeway...no toll plazas or barriers, no coins or tickets, no stop-&-go traffic. The user fee will be a small monthly charge.”

General express lane access will be charged at around $50/month, in the form of an electronic pass which will provide unlimited usage rights on all express lanes built by MetroRoad plus its San Tan expressway. Those only wanting to drive the San Tan will buy a separate $10 to $15 San Tan electronic pass.

HDR is following the Interwest pattern, proposing to establish Metropolitan Roadway Corporation (MetroCorp) as an Arizona nonprofit run by six prominent local citizens that will issue tax exempt bonds and build and operate the roads. HRD and its partners will get their return in fees for development services. (Contacts at Arizona DoT Privatization Office Bill Hayden 602 255 7524, Interwest Richard Carr 602 955 1187, HDR Bruce McKendry 602 248 6600)

The Phoenix Valley is a standing refutation of the idea that surburban sprawl is caused by expressways. They didn’t build intra-urban expressways here, but they got sprawl and horrendous traffic problems all the same. The area had a couple of interstates passing through it (I-10 west southeast, I-17 north-south) and built a couple of local stubs and until the 1980s that was about it. A mile on mile grid of signalized arterials 6 or 8 lanes wide was long thought sufficient for intra-Valley travel. But the inherent inefficiency of surface arterials and signalized intersections for carrying through traffic eventually demonstrated itself — Texas Transportation Institute data suggest that an expressway lane becomes overloaded at around 20,000 vehicles/day whereas similar overloading occurs on a surface arterial at only 8,000 vehs/ln/d, so as a general rule of thumb a 4-lane expressway carries comparable traffic flows to a 10-lane surface arterial. The local newspapers carried stories of Los Angeles style commutes way out here in the desert and creep-&-crawl traffic alongside the giant cactuses. And so in Phoenix those surface arterials looked increasingly inadequate as the population passed 2 million. Also having some of the wild West spirit, Valley drivers became quite notorious for ‘running the reds’ at those arterial intersections which produced some spectacular and gory crashes.