The financially troubled Northwest Parkway looks like it may stave off bankruptcy by leasing the toll road to foreign investors for what may be as long as 50 years.
The deal is preferable to a default that could hurt the ability of other public road authorities to market their bonds. But the parkway’s problems should prompt the state to rethink its infatuation with pay-to-drive roads as a solution to Colorado’s mounting transportation woes.
The Northwest Parkway runs for 11 miles from U.S. 36 to Interstate 25, linking Broomfield, Lafayette and part of Weld County to E-470. But unlike E-470, which augments toll collections by a $10 annual surcharge on automobiles registered in the E-470 district, the Northwest Parkway has relied on tolls alone to pay off its $416 million in bond debt. Unfortunately, cash has been coming in far short of projections – $5.6 million last year versus the hoped-for $10.4 million. The shortfall prompted directors of the parkway to select a team of companies from Portugal and Brazil to operate the road under a long-term leasing arrangement. While details remain to be worked out, the deal seems to meet the tests we outlined in a previous editorial, namely that the original bondholders get the money they were promised and that taxpayers don’t have to bail out the project.
But by the same token, the parkway’s pitiful revenue stream should chill enthusiasm for more regional tollways, including the notion of completing a beltway around the Denver area by building a 20-mile toll road through Arvada, Westminster and Golden to connect the Northwest Parkway to C-470. Golden has fought that project fiercely, and without at least some supplementary source of revenue, smart investors would probably shun such a new toll road. Upgrading existing roads – including Indiana Street, Colorado 72 and 93, and U.S. 6 – may be the best way to improve mobility in the northwest metro area.
