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Lockhart

Maybe there’s a problem with building roads where there are no drivers

The high speed toll road keeps having problems relating to not having enough paying customers.

Speed Limit 85

SH 130 has not been the immediate success story its backers had hoped. Last week, lower-than-expected traffic revenue prompted credit ratings firm Moody’s Investors Service to severely downgrade the SH 130 Concession Company’s debt and warned that a default may not be far off. The project’s stumbles are likely to draw increased scrutiny of how Texas plans to fund future infrastructure projects, though local and state officials are working to distinguish SH 130 from other toll projects in the works.

Moody’s downgraded $1.1 billion of debt tied to the project by five notches, from B1 to Caa3, considered junk status. It’s the second time the firm has downgraded the project’s debt, following an earlier downgrade in April.

“Bottom line is we believe they have enough money for their December payment, but they do not have enough money for their June 2014 payment,” Moody spokesman David Jacobson said.

The threat of a default could prompt the SH 130 Concession Company, a partnership between Spain-based Cintra and San Antonio-based Zachry American Infrastructure, to refinance its debt next year or inject additional money into the project. TxDOT could view an ongoing cash-flow problem as reason to terminate its toll contract with the company decades ahead of schedule, according to Moody’s.

[…]

The consortium spent $1.3 billion to build the southern portion of SH 130, known as Segments 5 and 6. Combined with the publicly funded northern portion (Segments 1-4), SH 130 connects Georgetown to Seguin, providing a 90-mile bypass around San Antonio and Austin. TxDOT officials have expressed hope that the road would someday serve as a popular alternative to congested Interstate 35 for those driving through Central Texas. Backers, noting the 50-year contract with TxDOT, also predict that future development in Lockhart and other small towns along the toll road’s route would lead to increased traffic in the future.

But the road’s location — about 30 miles east of the most congested portions of Central Texas — was viewed as a challenge from the start. Most other toll projects around the state are similar to the MoPac Express in Austin, which is adding toll lanes to the median of a congested highway. At last week’s ceremony to celebrate the start of construction, Capital Area Metropolitan Planning Organization chairman Will Conley said the project’s location distinguishes it from SH 130.

“I think this project is fundamentally different,” Conley said. “[SH] 130, of course, is a greenfield project and, I think, more of a longer-term-type project. Whereas, the day this opens, this is going to impact an immediate need on MoPac.”

See here for more on the April downgrade. A big part of the problem here is that there’s very few people where SH 130 is. That’s by design, of course, since it was intended to be a low-traffic option, but it means almost no one hops on it because it’s convenient. You have to plan to take it. It’s difficult enough to get people to change habits when the alternative you propose is easy to use and right in front of them. Just getting to SH 130 means going miles out of your way. It’s not quite as far out a detour as I first thought – here’s a map; I’d forgotten how much I-35 veers to the east, which makes it fairly close to I-10 for the first thirty or so miles out of San Antonio – but even in San Antonio, it’s passing through lightly populated territory. The towns it passes through between San Antonio and Austin are much smaller than their I-35 counterparts, too – Seguin has about 25,000 people and Lockhart has about 11,000, while New Braunfels has 57,000 and San Marcos has 50,000. I guess the bet that the SH 130 investors were making is that the population will grow around the highway, and I’m sure eventually it will, but eastern San Antonio – I’m talking along I-10 outside Loop 410 – doesn’t look that much different to me today than it did 25 years ago when I left SA for Houston. There’s a bit more development out there, but it’s mostly industrial, not commercial or residential. You want that, go west and north. Maybe 25 years from now it’ll be more built up. I don’t think the SH 130 Concession Company can wait that long.

Maybe there are fewer people who want to drive 85 than we thought

Oops.

The privately operated section of the Texas 130 tollway south of Mustang Ridge is attracting about half the predicted traffic, according to Moody’s Investor Service, prompting it to investigate downgrading credit ratings for more than $1.1 billion in debt attached to the toll road.

[…]

TxDOT’s contract with the concession company lays out complex procedures to determine how much TxDOT would pay the concession company to take over the road in the event of a default or for any other reason. The Moody’s report doesn’t mention the possibility of default.

Chris Lippincott, a spokesman for the concession company, said it is meeting “contractual obligations to operate and maintain a world-class highway. We remain confident that the recently opened SH 130 … will benefit our investors and the people of Texas.”

The transportation commission — which has operational control of Texas 130’s northern 49 miles but not the Cintra-Zachry section — [approved on Thursday] cutting truck tolls by two-thirds for the next year on the tollway as well as on connecting toll road Texas 45 Southeast. Multi-axle trucks, beginning Monday, would pay the same tolls as passenger vehicles and pickups.

The concession company has agreed to charge all vehicles the car rate as well during that period. That means that a truck, rather than paying as much as $61 to travel the entire 90 miles of Texas 130, would pay just over $17. In both cases, those are the pay-by-mail rates. A truck equipped with an electronic toll tag would pay 25 percent less.

TxDOT, in announcing the toll reduction for big trucks, said it was done to ease congestion on parallel Interstate 35. But the change, which TxDOT estimates will reduce toll revenue on Texas 130 and Texas 45 Southeast by $11 million over the next year, also could introduce some truckers to the high-speed tollway. The speed limit is 80 mph on the TxDOT section and 85 mph on the Cintra-Zachry section.

So maybe this isn’t the pathway to prosperity that the city of Lockhart dreamed it would be, though it is good news for the hogs. Maybe it’s just that the idea of driving 85 MPH isn’t quite as appealing as we thought, at least not at these prices. Who knows? Let’s just hope TxDOT doesn’t get stuck holding the bag. The Trib notes a side issue relating to the speed limit on the service roads for SH 130, and EoW has more.

It was nice knowing you, Lockhart

There’s so much that’s wrong with this.

Image courtesy bbqfilm.com

Community leaders believe the four lanes of Texas 130 will spur growth — despite what is expected to be a charge of about 15 cents a mile to drive on it. The tollway, which will link Lockhart to Austin to the north and will provide a much faster route to San Antonio to the south, has drawn the attention of a handful of developers, but no dirt has turned yet.

“We can only imagine what fruits it will bear for Caldwell County,” County Judge Tom Bonn told the crowd at the summit. “We are ready for industry. We are ready for development. We are ready for jobs.”

But as shown by the short history of the existing 49 miles of Texas 130, which loops east of Round Rock and Austin and opened in sections between 2006 and 2008, the presence of a tollway does not guarantee instant development. Drive that road today and, aside from concentrations of housing and retail in Hutto and Pflugerville and the nearly finished Formula One racetrack, most of the road is flanked by empty land.

And those two communities, given their proximity to Round Rock and the thousands of Dell Inc. jobs, were already booming before Texas 130 and nearby tollways Texas 45 North and Loop 1 opened. Caldwell County, at least at this point, has no such employment base. Not yet, anyway.

Caldwell County Commissioner John Cyrier, who runs an Austin commercial construction company, said bringing that first big employer to the county is the key. An 85 mph tollway could help with that, officials say.

“We’re trying to attract a business,” Cyrier said. “Then the rooftops will come, and the retail. We’re hoping for at least 10,000 rooftops.”

Those rooftops, of course, would come with people, and traffic, and all sorts of change. Lockhart, at least compared with the astonishing growth of other towns ringing Austin, has been a tranquil island of stability. Its population grew just 9 percent between 2000 and 2010, to about 12,700. And the biggest reason to visit Lockhart remains its brisket, ribs and sausage.

“I think people are very optimistic about it,” Cyrier said of the expected growth. “They’re wanting the quality of life, and the jobs to come. They’re tired of their grandkids going away.

“I’ve been very surprised with it. I thought maybe people would be upset with it, fighting it.”

Jeff Gibeaux, a civil engineer and downtown Lockhart developer who has lived in the city for 20 years, said the more dominant reaction among locals is skepticism that significant change is on the way. After all, Lockhart is about the same distance from downtown Austin as Hutto, Georgetown, Leander and Bastrop, yet unlike those towns has never taken off as a bedroom community.

Which is precisely why, Gibeaux argues, that with Texas 130 in place, his town and Caldwell County probably are about to boom.

“As I tell people, it’s the last piece of pie in the dish,” Gibeaux said. “You can’t go anywhere else” with development.

It’s sprawl in its embryonic form. I understand why Lockhart wants to grow – many small, rural towns have been steadily losing population to the cities and suburbs – but boy is it hard for me to see how being a 40-mile commute on a toll road will bring the masses in. Maybe that’s just me, though. Of course, you can go elsewhere with development, just not this kind of development. That’s more of a subject for places like Austin and San Antonio to address, however. I’m dubious about all this, but check back in 20 years and we’ll see who’s right.

On a side note, the way this toll road came to have an 85 MPH speed limit was dodgy.

Before construction on the toll road stretch began, U.S. Highway 183 in the county was a four-lane road. The road had a posted speed limit of 65 mph and a reputation for accidents. Now U.S. 183 will serve as the frontage roads to the new toll road with two one-way lanes on each side. Though it’s widely considered safer than the older road, TxDOT has set the speed limit for the new U.S. 183 through Caldwell County at 55 mph.

The news of the lower speed limit designation for U.S. 183 has been “the talk of the town,” said Caldwell County Judge Tom Bonn. For three years, local residents had patiently put up with lower speed limits because of construction and had assumed that the 65 mph limit would return once the project was completed, Bonn said. He believes that the speed limit was set at 55 mph to encourage drivers to use the toll road.

Furthering suspicion is a report by the Austin American-Statesman noting that the speed limit was chosen based on a trial run conducted last year by an engineer hired by the SH 130 Concession Company. TxDOT declined to comment on why a TxDOT engineer did not perform the test.

Chris Lippincott, a SH 130 Concession Company spokesman, said a lower speed limit is prudent considering the economic development that the toll road will draw to the frontage roads.

“Whataburger and Home Depot do not want their customers pulling out of their driveways onto a 65 mph racetrack,” Lippincott said. “When you look at frontage roads with high speeds, you tend to find limited growth and too many wrecks.”

Local elected officials are skeptical. Both the Caldwell County Commissioners and the Lockhart City Council have passed resolutions calling on TxDOT to return the U.S. 183 speed limit to 65 mph and offer a discounted toll rate for Caldwell County residents that have to commute to jobs in Travis County. Members of the Legislature are also hearing complaints about it.

“I think public opinion is going to change it,” Bonn said. “It’s a bad decision.”

The profit motive sure does skew these public infrastructure projects, doesn’t it?