The Northwest Parkway Public Highway Authority’s 99-year lease agreement will try to intentionally congest local roads in the future to enrich the foreign corporations running the toll road, the City of Golden said today.

“It’s bad enough that the Northwest Parkway Public Highway Authority and its member governments sharply increased the tolls for today’s drivers, but to intentionally impose a century of congestion on future generations in exchange for this short-term bailout is shockingly shortsighted,” said Golden Mayor Pro Tem Jacob Smith.

Article 14 of the lease to privatize Northwest Parkway operations (available for download at http://www.nwpky.org/Concession/FinalCLA.pdf) requires payments to the foreign corporation if certain roads or facilities are built in the area that would compete with the toll road.  The lease provides that “the construction of a Competing Transportation Facility” constitutes an action that gives the foreign corporation the right to terminate the lease and seek significant damages from the Highway Authority (See Lease, Section 14.1).  “Competing Transportation Facilities” include the continuation of 160th Avenue west of Sheridan Parkway to connect to 120th Street, the construction of a mass transit facility near the Parkway (other than Fastracks projects), and certain other road projects located within five miles of the Parkway that would affect the Parkway’s revenues (See Lease Section 1.1, “Competing Transportation Facility”).  Because such damages would likely return the Authority to a financially perilous position, it will create a large impediment to future transportation projects in the area.

“This noncompete agreement intentionally ties the hands of local and regional governments and the state to address transportation needs in this area, which can only serve to further congest area roads over the 99-year term of the lease. The beneficiaries of this agreement are the Portuguese and Brazilian companies that will collect the tolls. Even then, it’s unlikely they’ll be able to generate sufficient traffic on the road,” Smith said.

Smith explained: “If demand existed or was expected to materialize for the Northwest Parkway or potential extensions of the toll road, there wouldn’t be a need for such a noncompete agreement.  However, all the traffic studies to date show there is very little demand for a major tolled highway between Broomfield and Golden, and tolling could only pay for a small fraction of what would be needed to build such a road.  The only thing that could make the noncompete agreement worse would be if taxpayers were forced to subsidize extensions of the toll road and then be forced to pay to use them.”

Noncompete clauses around toll roads have caused controversy in the past. Commerce City and seven other communities agreed in the 1990s that no roads would compete with the E-470 toll road, according to a 2005 article in The Denver Post.  Commerce City lowered the speed limit and installed traffic lights on Tower Road near E-470.

According to a 2004 report from the U.S. Government Accounting Office, “The language in the noncompete clause for the SR 91 Express Lanes in Orange County, California, effectively prevented the state from improving the nontolled freeway lanes of SR 91 until 2030—the term of the franchise agreement— and was the subject of litigation and considerable public outcry.”  As a result, the Orange County Transportation Authority bought the road back from the private operator, according to the GAO report (available online at http://www.gao.gov/new.items/d04419.pdf).

“The City of Golden supports transportation solutions for the region that would cost less than the toll road extension while providing more congestion relief.  These solutions would avoid tolls and related noncompete clauses altogether,” Smith said.