State moves to scuttle deal on 288 toll lanes
State highway officials Thursday took the first of many steps toward terminating an agreement with a private company for the Texas 288 Toll Lanes.
The five-member Texas Transportation Commission authorized the Texas Department of Transportation to end the 50-year deal less just eight years into it and plan to form a nonprofit corporation to oversee the tollway.
“This is not the end of this process,” said Transportation Commission chairman J. Bruce Bugg, reading from a prepared statement.
Bugg noted the approval “does not make any changes” to the existing operations of the toll lanes, and officials are likely to spend months working out the details of a termination.
He said the state would take back the lanes and pay back the private company only “if it is determined to be in the best interest of the public.”
Commissioners had no discussion prior to the unanimous approval.
TxDOT inked a 50-year deal in March 2016 with Blueridge Transportation Group that allowed the company to build a tollway within Harris County from Interstate 69 to Brazoria County in the median of Texas 288.
In a statement, the company said it was “grateful to the chairman of the transportation commission and TxDOT for their continued partnership and look forward to working with them over the coming months to best serve the people of Texas. We are a highly credible, long-term operator of toll roads with a proven track record of delivering for the local community.”
The Texas 288 deal was the last of 12 comprehensive development agreements signed by Texas officials and the only one of the public-private deals in the Houston area.
As such, it contained a buyout clause that several previous forms of the deals in the state do not, said state Sen. Robert Nichols, R-Jacksonville.
“There are four or five of these projects that have no protection,” he said.
Nichols was a transportation commissioner 25 years ago, when many of the deals were in the planning stages and the state faced a road funding crisis.
Once state officials leaned more into tolling and even expanded it to private deals, some of the specifics challenged the benefit of early projects. Nichols, who entered the Texas Senate in 2007 and for more than 12 years has led the chamber’s transportation committee, was among those revising the policies to avoid later pitfalls.
With Texas now spending on highways in record amounts because of state and federal investment, Nichols said ending the Texas 288 deal makes sense.
If finalized in the next few months, the state will pay more than $1.7 billion to Blueridge for the lanes, over $600 million more than the lanes cost to build and maintain initially. In return, however, TxDOT will have decades more to collect tolls from drivers and recoup that cost with predictable revenue.
What is unclear is whether state control could lead to drivers getting a better deal. Since shortly after the lanes opened in November 2020, commuters have watched the price of the tollway within Harris County creep from around $6 to more than $15 during peak commuting times. Drivers who use the tollway portion in Brazoria County — where it is maintained by the county and not a part of the TxDOT deal — can pay $18.30 at the most expensive times of day.
TxDOT officials stressed that the termination of the agreement was not related to any breech or deficiency on the part of Blueridge but simply a chance to potentially make economic sense for the state.
Proponents of tolling projects disagree. Steven Gassenberger, a policy analyst with the libertarian-leaning Reason Foundation, urged transportation officials to reconsider. He said Texas has been successful in allowing private toll road use to keep overall transportation costs down and steer costs directly to users of the roads as opposed to taxpayers in general.
That success has come with the support of financiers and businesses interested in lengthy deals for road development.
To those investors, stepping back by terminating the Texas 288 deal, Gassenberger said, “would send a message we believe that your money is not welcome in Texas.”