How About Used Car Salesman?
Steve Hogan, executive director of the Northwest Parkway Public Highway Authority, is looking for a new job.
Hogan made this announcement after accepting a deal to lease the 11-mile Northwest Parkway toll road – which runs from Broomfield to E-470 – to a foreign business consortium that hopes to cash in on Colorado drivers.
Hogan’s exit is but a pit stop for the beleaguered toll way, whose short history should serve as a cautionary tale for states looking to save tax dollars by entering into risky partnerships with semi-private freeway developers. Built in 2003, the Parkway was funded through $30 million in loans from various North Metro counties, and the sale of $416 million in bonds from investors hoping for a quick return. The only problem was that once cars started hitting the pavement, the traffic projections on which the project was advertised proved to be wildly overstated.
In a 2001 traffic forecast, transportation consultant Vollmer Associates estimated that the Parkway would host more than 30,000 cars a day in 2004, and pull in $12 million dollars in fees. In reality, the toll road’s opening year saw about 7,500 vehicles a day which paid out a puny $6.3 million. Hogan, who moonlights as an at-large Aurora City Councilman, blamed everything from 9-11 to a slack in area residential development for the shortfall. Naysayers countered that the Parkway was a misconceived project from the outset, fashioned more for the highway and real estate industries than the needs of actual drivers.
The authority tried everything from increasing tolls to advertising the Parkway through radio and direct mail in hopes of raising traffic stats and income – but most months the Parkway transported less drivers than many Denver intersections, earning approximately $10 million dollars less than predicted in 2006. Last fall, after an attempt to restructure the $415 million debt fell through and the Parkway’s bonds had officially fallen to “junk” status, Hogan decided the only way to escape default was to put the toll-road up for lease.
The offers came like gridlock. "We literally got responses from around the world,'' Hogan told Business Week in a story about how transportation infrastructure has become the new, hot, international commodity for banks and private investment firms.
So this is how Brisa Auto-Estradas, of Lisbon, and Companhia de Concessoes Rodoviarias, of Sao Paolo, Brazil, became positioned to operate a small stretch of highway in the middle of the United States for the next 50 years. The deal is expected to be finalized this summer, with all of the authority’s employees reportedly getting severance packages – except for Hogan.
Any suggestions on how he’ll be able to replicate his $166,000-a-year salary? –Jared Jacang Maher
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