Will the proposed Jefferson Parkway toll road take Colorado commuters for a ride?
Jefferson County has a bold vision for how to brand itself as a leader in the new green economy. Officials talk about smart development, open space, multi-modal transportation, renewable energy and progressive technology that will lessen our country's dependence on fossil fuels. So what's Jeffco's solution?
Not just any highway, either. The proposed $813 million Jefferson Parkway will be a high-speed tollway stretching some fourteen miles through the last undeveloped quadrant in the metro region. Boosters — Broomfield and Arvada primary among them — see the road as a catalyst for massive building growth in the area, potentially dumping billions into the local economy through high-end commercial and office development.
The Jefferson Parkway would also realize a long-sought dream: the completion of Denver's beltway. The first section of the highway that circles the city was laid down in southern Jefferson County more than twenty years ago, and the road has since crept piece by piece around the outskirts of Denver, leaving just one last section empty. But while the rest of the beltway plowed over open farmland and prairie, this section, between Highway 36 and I-70, holds three major geographic obstacles: the 6,000-acre Rocky Flats National Wildlife Refuge, North and South Table Mountains and, most important, the city of Golden.
"Golden's contention from the beginning is that this has always been about development, not about transportation," says Jacob Smith, who was elected mayor in 2007; a major plank in his platform was fighting the beltway's incursion into Golden. The 19,000-resident town sits in a valley, and the most practical route for the road would be on top of Highway 6, just three-quarters of a mile from the historic downtown and a dozen or so yards from housing developments that would be cut off from the rest of Golden. A few years ago, Golden officials funded a study that suggested beltway enthusiasts could instead put their road in a tunnel under a portion of the town — at a cost of $200 million.
Proponents of the Jefferson Parkway balked at that, but they didn't give up on the idea of building the beltway. Their current plans have the road curling south from Broomfield, swooping over to Highway 93 and stopping right at the Golden city limits. It's like a traffic-loaded shotgun aimed right down Golden's throat — and a foreign company could very well have its finger on the trigger.
The message: There's the hard way, and then there's the beltway.
The battle of the beltway started in the early 1970s, when regional officials and environmentalists first faced off on plans to build a federally funded freeway ring around Denver called Interstate 470. Richard Lamm, who was elected governor in 1974, slammed the brakes on the project, arguing that it was an invitation for sprawl.
"I believed very passionately back in 1976 that I-470 was an institution out of the past, that we were already in an oil crisis, that it was inevitable that we would have continuing oil crises, and that for environmental purposes, the city of the future should be built around mass transit," says Lamm, who famously vowed to drive a "silver stake" through the heart of the proposed project.
Ultimately, only one portion of the hundred-mile beltway — Colorado Highway 470, which connected Interstate 70 to Interstate 25 — would survive as a wholly public link; it opened in 1985. But by then, beltway supporters were already working to create a new tool so they could build highways without having to resort to state or federal funding. And in 1987, the Colorado Legislature passed a law allowing local governments to form public highway authorities, pseudo-public entities that could condemn land, issue bonds and build roads — either by toll or by creating special taxing districts.
The next year, Extension-470 was born. Cities and counties in the southeast suburbs were able to convince voters to pass a $10-per-year vehicle registration fee that, along with tolls, would fund the twelve-year expansion of the E-470 tollway from its birthplace at the edge of C-470 near the soon-to-be town of Lone Tree, past what would become Denver International Airport, and on to the distant north end of I-25 in Broomfield.
The same strategy didn't work for a northwest link, though. The Western-470 Authority, comprising nine northwest cities and counties, wanted to complete the beltway around metro Denver — but in 1989, voters in Jefferson, Boulder and Adams counties shot down a vehicle registration tax proposal by a 4 to 1 margin.
Arvada City Councilwoman Lorraine Anderson was on the task force that helped create E-470 and was a key promoter of W-470. "In the west side of town, the citizens weren't as generous with tax support as the east side of Denver," she laments. "Back then, we were hoping we could complete it the same time as E-470."
With the rejection of that first W-470 funding plan, the opposition became even more organized. Smart-growth advocates cited the Highlands Ranch-style sprawl that the beltway had engendered to the south. Golden, which had always been lukewarm on the project, now shifted its stance to outright resistance — in marked contrast to Arvada's solid support for the beltway.
By the mid-'90s, Jeffco was at a stalemate. "You can call it W-470, the Northwest Parkway or Fluffy the Cat," then-Wheat Ridge city councilman Vance Edwards told then-Jefferson County Commissioner Michelle Lawrence in 1997 ("Blacktop Jungle," June 19, 1997). "But it just doesn't seem to die. Just when you think it's finally dead, it pops up again."
"Well," replied Lawrence curtly. "Fluffy has nine lives."
Fluffy got new life in 1999, when Broomfield (which became a county in 2001), Lafayette and Weld County spun off and created their own highway authority to build a section of the beltway from I-25 to Highway 36. The Northwest Parkway opened in 2003, funded through the sale of $416 million in bonds to investors hoping for a quick return. But once cars started hitting the pavement, it quickly became apparent that traffic projections for the toll road were wildly optimistic.
In a 2001 traffic forecast, transportation consultant Vollmer Associates had estimated that the Northwest Parkway would host more than 30,000 cars a day in 2004 and pull in $12 million in fees. In reality, the toll road's opening year saw about 7,500 vehicles a day, resulting in a puny $6.3 million take that year. Then-Northwest Parkway director Steve Hogan blamed the shortfall on everything from 9/11 to a slowdown in residential development. But naysayers argued 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 Northwest Parkway Highway Authority tried everything from increasing tolls to advertising the road through radio and direct mail in hopes of raising traffic stats and income — but in 2006, the parkway still earned $10 million less than had been projected. After an attempt to restructure the 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.
Portuguese tolled-motorway operator Brisa Auto-Estradas teamed up with Brazil's Companhia de Concessoes Rodoviarias to bail out the Northwest Parkway authority. Their $503 million investment paid off the debt and earned them the right to operate a small stretch of highway in the middle of the United States — and collect tolls on that road for the next 99 years.
But they hope the stretch won't stay small for long. To maximize their profit potential, Brisa and the Brazilian company built into the deal $100 million in incentives for the Northwest Parkway authority to push the completion of the beltway to Highway 93. A $40 million sweetener will go to Broomfield if the beltway extension is completed by 2020. If it is, Brisa will pay another $60 million toward the cost of building the beltway right up to Golden.
Back in 2001, Jefferson County and local municipalities commissioned engineering firm CH2M Hill to examine the best ways to improve transportation in the "Northwest Quadrant" of the metro area. The resulting report determined that improving arterial roads, particularly Highway 93 and Indiana Street, was the best way to handle traffic in the area — not building a freeway. But the next year, then-CDOT chief Tom Norton gave Fluffy yet another life when he authorized an Environmental Impact Statement to determine the best way to complete the beltway around Denver.
Golden officials viewed this process as biased from the outset. "By the way that they framed the question, they came out with a preordained answer," says land-use attorney John Putnam, who represents the town. "If the question is how do you move people as quickly from point A to point B, it's kind of a no-brainer to say you build a major freeway-type facility. What they ignored was an analysis of where people are really trying to go, where is the congestion and what's the best way to deal with the congestion."
Various Jeffco entities started funding highway feasibility studies, counter studies and counter-counter studies that ate up tens of millions of dollars and involved dozens of consultants and attorneys.
The state's EIS study continued until early 208, sucking up $15 million before new CDOT director Russ George, who'd been appointed by Governor Bill Ritter, determined that there was no money in the state transportation budget to complete the EIS and find consensus, let alone fund the beltway. In July, the study was canceled and the work done thus far released in a truncated "planning document."
But already in May, Broomfield had banded together with Jefferson County and Arvada to form the Jefferson Parkway Public Highway Authority, with the goal of pushing the beltway to just outside Golden. Each jurisdiction contributed $100,000 and one member to the three-member JPPHA board: Jefferson County Commissioner Kevin McCasky, who's serving as the chairman; Arvada mayor Bob Frie; and Broomfield mayor Patrick Quinn.
The JPPHA's website invokes Ritter's Blue Ribbon transportation panel in noting how Colorado's transportation system faces a "quiet crisis." Since its gasoline-tax revenue has eroded to less than a third of what it was a decade ago, "the state faces an estimated $53 billion shortfall between now and 2035 just to maintain the existing state road system in its present condition," says the website. In this environment, new projects like the Jefferson Parkway would be roadkill were it not for the types of "public-private partnerships" and other "creative" financing options that Ritter slipped into his State of the State speech earlier this month.
"It was exceedingly clear that there was no money for any improvements in that area until after 2035," says Jefferson County Commissioner Kathy Hartman. "That's 28 years from now. There just isn't any money. The only reasonably viable funding source is a private partner that would be willing to do this under a toll road situation."
The JPPHA hired two firms, PB Americas and Stantec, to manage the Jefferson Parkway project; they were consultants on both E-470 and the Northwest Parkway. But while those highways were built with public bonds, the plan for this venture is to find a "private partner" willing to fund the entire infrastructure investment in exchange for a long-term lease to operate the Jefferson Parkway and collect tolls along the way.
While Bill Ray, deputy city manager of Arvada and JPPHA's interim director, says the authority hasn't gotten any formal queries from companies looking to build the toll road, there's definitely interest. "I certainly have a lot of people who hand me their business cards and say, 'When you guys get ready to do something, if you can give me a call, I'd appreciate it,'" he says.
The JPPHA has heard from several mega-investment consortiums in Europe, South America and Australia, and hopes to enter into formal discussions with interested parties this month; boardmembers are currently working to secure the preliminary approvals from local, state and federal transportation authorities that will allow them to seek proposals from investors. At that point, the JPPHA will get into detailed contract negotiations with would-be operators. Right now, the leading contender looks to be Brisa Auto-Estradas.
Broomfield has already earned heavy criticism for its $40 million incentive package from Brisa to push for the beltway's completion. "There is scrutiny on this board that is going to continue until the very end," Quinn told his fellow boardmembers at a December meeting. "We have Golden, that is going to watch everything we do."
McCasky is careful to point out that the JPPHA's mission is simply to link the Northwest Parkway with Highway 93 — not to build a road through Golden. Completing the arterial is critical for transportation in the region, he says, as well as "critical to the economic competitiveness of the county." He cites a 2007 study by the Jefferson Economic Council, which found that completing the beltway would double economic development in the county over the next twenty years — raking in an additional $17 billion — and help make the county an epicenter for the renewable-energy industry.
"We have the National Renewable Energy Lab, the School of Mines — Conoco Philips moving in Broomfield. We have a wonderful triangle of high-tech alternative-energy opportunity," he explains. "There is a need to connect these major employment centers with a transportation arterial."
Both NREL and the Colorado School of Mines are located in Golden, of course. "It is deeply ironic," notes Smith, "and ironic in a disheartening way; it's not funny at all."
Smith has only lived in Golden for five years. He grew up in the Aurora suburbs and watched the construction of the E-470 portion of the beltway; he saw how it spurred development on the east side of the metro area. That sprawling growth was one of his motivations for founding the Center for Native Ecosystems, a Denver-based ecological advocacy group. If Jeffco truly wishes to redefine itself as part of the new green economy, Smith says, it shouldn't push for an outdated transportation model that encourages sprawl and auto-based development.
The Jefferson Economic Council study considered the impact of three areas along the proposed parkway route, and all the projections regarding jobs and housing were based on numbers "provided by the Jefferson Economic Council, developers, property owners and other stakeholders," according to the study. But the only developer and property owner listed in the reference section of the study is Church Ranch Development Company. CRDC owners Charles McKay and Gregg Bradbury, who gave $1,800 to McCasky's recent reelection campaign, own 365 acres in Broomfield adjacent to Rocky Mountain Airport that they hope to develop into housing and a corporate center, as well as 426 acres in west Arvada that will be the first to be developed into the 2,000-acre Candelas.
Beltways don't just bring housing, but the types of large-scale commercial and office development that can make or break a municipality. "The way that our laws work, they pit local governments and cities and counties against each other for sales-tax revenue," says Stephanie Thomas, an open-space advocate with the Colorado Environmental Coalition. "So everybody wants to have the next big development in their area because they have the sales-tax revenue."
The losers in the sales-tax game are the cities that can't land large retailers within their boundaries and have to watch their residents travel to other cities to spend money. When the Northwest Parkway came to fruition, various municipalities scrambled to build five mega-retail projects along the north I-25 corridor ("Malled!" October 20, 2005).
The JEC-funded study also determined that if the highway isn't built, the county would realize roughly half as much in tax revenues from future building over the next twenty years — $180 million with Jefferson Parkway versus $91 million without — because development would focus more on housing than commercial or office. The county is "a property-tax-supported entity," says Jeffco's Hartman. "And on a tax basis, that means that we get a lot less money, because commercial property pays three and a half times the property taxes."
Smith points to such comments as proof that the beltway isn't about traffic, but development. "So it begs the question: Is this appropriate for the state to build a new highway that isn't really about transportation?" he asks. "Yeah, it's maybe good for some people to make a lot of money, maybe even good for the county's coffers, but is that really the right role for the public at large?"
Smith's biggest concern with the Jefferson Parkway isn't traffic or development, however, but the plan to build it through a complicated leasing arrangement with a foreign corporation.
"Going to private market sounds so easy, so painless. It feels a lot like a low-interest loan or a credit card where you don't acknowledge the true cost," Smith says. "But free stuff isn't usually free. What happens with these privatization schemes when something goes wrong and the government and taxpayers have to pick up the pieces and bail out a highway that no one needed in the first place?"
According to Phineas Baxandall, a senior analyst with U.S. Public Interest Research Group who has written extensively about private toll roads, the proposed Jefferson Parkway financing plan is following the same route as the Northwest Parkway deal with Brisa, which was unprecedented in this country. "This is completely turning comprehensive planning on its head," he says. "Instead of the federal government doing block grants for local entities to ensure that the public interest is served, it's a private entity trying to overrule the town of Golden for something that has no connection to a larger regional, much less national, plan, but just doing it because it increases the profits on a particular road."
While toll roads built by public authorities are nothing new in this country, major pieces of infrastructure being leased to private corporations is a recent phenomenon. In 2005, both the City of Chicago and the State of Indiana leased public toll roads to foreign corporations in multi-billion-dollar deals. Brisa saw the Northwest Parkway as a good way to break into the lucrative U.S. market, and it's seeking more acquisitions in California and Texas, as well as in Colorado. But while such deals can look good to local governments in the short term, Baxandall argues that the public loses out in the long term. "What I don't think people quite understand is the built-in costs disadvantage that a private entity has because of its higher cost of borrowing," he says.
And while Richard Lamm now looks back on his pledge to drive a "silver stake" through the heart of the proposed beltway as needlessly confrontational, he cautions policy-makers that relying on more highways — particularly tollways funded by overseas corporations — is indicative of a country still looking in the rear-view mirror. "There's something metaphorical about America not having enough money to build its own transportation system and relying on foreign investors," says Lamm. "I think that the idea that we don't have the national will to build our own transportation and meet infrastructure needs is a metaphor, frankly, of a nation in decline."
But even if Colorado had the will to build its own roads, it might not be able to under the terms of the deals with foreign investors.
Last April, Brisa executive director Pedro Costa sent a letter to Broomfield, warning that a planned extension of West 160th Avenue could be in violation of the Northwest Parkway lease agreement, which prohibits building "Competing Transportation Facilities" that might diminish toll returns. As designed, the extension would essentially create a frontage road for the Northwest Parkway, allowing residents to drive between Lafayette and Broomfield without having to use the toll road or drive an extra two miles to use a state highway.
"We view this realignment and any discussion of any extension of West 160th Avenue as a probable Adverse Action," Costa wrote.
In 2005, the E-470 Authority invoked its own non-compete clause to force Commerce City officials to lower the speed limit and install more traffic lights on Tower Road near Denver International Airport as a de facto method of diverting cars to the toll road.
Smith points to such actions as proof that private tollways can discourage local governments from constructing or improving "competing facilities" (i.e., free roads). Such a non-compete is a "congestion guarantee," he says. "It's essentially a guarantee to the private investors that they're going to keep their own roads congested enough that people are willing to pay tolls on a private road."
He also cites studies indicating that future traffic demands will necessitate improvements along local arterials and Highway 93 heading to Boulder — improvements that could be quashed if the JPPHA signs a no-compete clause with a private tollway investor.
"They're trying to frighten people," counters Arvada's Anderson, who accuses Smith and other Jefferson Parkway opponents of making overblown claims about the no-compete clauses and resorting to "scare tactics." Arvada's main motivation for supporting the toll road has always been "to take regional traffic and keep it out of our neighborhoods," she says.
Jeffco commissioner and JPPHA chair McCasky insists that improving local, free arterial roads will actually be beneficial to a future toll road because they will increase access. But will private investors see it the same way?
"These are the sort of protections that an investor would want to see," says land-use attorney Putnam. "If they're buying this road, they don't want to see competition that would prevent potential cars from paying tolls on their road. They want to see that there's enough congestion, enough difficulty getting around on the free roads so that people always have to go on the toll roads."
"What we know is that private investors almost always insist on these things," Smith says. "And you've got Kevin McCasky and Kathy Hartman as lead champions on building this thing. Yeah, they're saying they don't believe in congestion guarantees, but at the same time they're saying let's go to the market and see what happens. They know that the market insists on congestion guarantees, so either they're setting themselves up for failure or they're holding open the option of congestion guarantees. Either way, it's crazy.
"The JPPHA wouldn't be able to impose a congestion guarantee on Golden," he continues. "But if I lived in Arvada, I would be very concerned."
On January 1, E-470 raised tolls by fifty cents, as did the Northwest Parkway. This was the second time that Brisa has raised tolls since taking over the Northwest Parkway a little more than a year ago; it now costs a driver $3 per trip to use the road.
At its meeting January 15, the JPPHA board will start developing the terms of whatever deal they'll offer a private partner in the Jefferson Parkway. With the Northwest Parkway, all the politicians who made the deal and the citizens who voted for them will be long gone, while their children and their children's children continue to pay tolls to a foreign corporation until Brisa's lease expires in 2106.
It could be just as long — if not longer — before all the concrete dust settles over the Jefferson Parkway.
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