VIRGINIA Dulles Gway battles on

VIRGINIA

Dulles Gway battles on

The troubled investor-built Dulles Greenway in Loudoun Co Virginia is now more than covering its operating costs but is still not able to make any debt service payments, according to Rich Froehlich, its chief financial officer. He says the partnership that owns the G’way is “working positively” with its creditors on a refinancing scheme.

Documents signed recently with the group of insurance companies that provided the loans for construction extend the “standstill” on debt service and foreclosure until Sept 30. Toll Roads Investors Partnership II (TRIP II) which consists of Shenandoah Greenway Corp (the Bryant/Crane family investment) and Autostrade International has been unable to meet any of the debt service payments since the road opened in August 1995.

Last year the G’way owners had a standstill agreement with the major lenders that extended to early this year, so it now has another nine months to reach arrangements for a new debt and capital structure — or face possible foreclosure proceedings.

Meanwhile Froehlich says weekday traffic is now regularly over 30k veh/day. Most encouraging it does not seem to have suffered from opening of the extra lanes on the parallel free VA-7 (now 6-lanes) or the new three level interchange (IC) and direct connectors to US-15 near the western end of the G’way.

Big developments

Medium to longterm the Gway’s financial prospects look good. Loudoun Co is by far the fastest growing area in the Wash-Baltimore region (pop 7m), and the Gway is the major motorway standard spine, with direct connections to the big airport, the Beltway and Washington DC.

A commercial office park right off the Gway opens later this year, and will see another interchange opened.

WorldCom, the telephone company, which owns 534 acres next to the Gway has filed plans for 4.7m sq ft of office space (not much less than the Pentagon) together with provision for hotels, restautants, sports and health clubs. Half the office space would be used for a subsidiary UUNet, a major internet cabling and switching outfit. An eventual 30k employees are envisaged by WorldCom, with their own interchange off the Gway and a 6-lane connector to it.

Baan, a Dutch software firm is building a 2.5m sq ft facility nearby. Washington-Dulles airport, the region’s agglomeration of telecommunications firms, a relatively pro-business state govt, and the rolling VA countryside are major attractions for business.

But for next 3 years or so the Gway will probably continue well below the original forecasts and below its business plan. (Rich Froehlich, Dulles G’way 703 707 8870)