Questions and Answers
THE I-495 & I-270 P3 PROGRAM
A public-private partnership (P3) is a contractual agreement between a government agency (public sector) and businesses (private sector) to deliver a project or a service traditionally provided by the public sector. P3 arrangements are often used to fund costly infrastructure projects.
When Governor Hogan first announced his plan, he said it would cost $9 billion and the P3 contractor would pay for all of it. The plan continues to change and is now estimated to cost at least $11 billion. Taxpayers may end up paying hundreds of millions of dollars to subsidize the contractor.
MDOT selected Accelerate Maryland Partners, a consortium controlled by Transurban, the Australian firm that developed the network of toll lanes in Northern Virginia, as the Phase 1 Developer. The Phase Developer is responsible for pre-development work, will design the toll lanes, and serve as the primary contact for affected jurisdictions, communities, and residents.
Phase 1 includes the American Legion Bridge and I-270. Phase Developers will be selected for other phases of the P3 project, including I-495, but there is no schedule yet for future phases. Accelerate Maryland Partners has the exclusive right to build Phase 1 and operate it for the next 50 years. Specifics are to be negotiated after the Phase Developer designs the project.
Not really. There is a pending bill (HB0705) to stop the project but it is seen as having little chance of passage. There is also a pending bill (HB0067/SB0843) that would prevent the BPW from approving the Agreement unless specified processes are included; however, it would not stop the project. The Budget Committees of the General Assembly will be given a copy of the Phase Agreement for review and comment purposes only before the Agreement goes to the BPW for approval.
The BPW may reject the contract but MDOT could come back to them later with a revised contract if the BPW objections were limited in scope. Ultimately, though, the project cannot go forward unless the BPW approves it.
Currently, there are at least two legal avenues under consideration. The Sierra Club’s Maryland chapter has indicated plans to sue if the State doesn’t address concerns about the environmental analysis. The Maryland-National Capital Park and Planning Commission (M-NCPPC) also may pursue litigation. M-NCPPC has authority over parkland in Montgomery and Prince Georges County and has raised environmental concerns about the impact of adding lanes that run through public parks they own.
MDOT initially included 15 alternatives for consideration in a preliminary range of options. It then selected 7 screened alternatives, which included one “no build” option for further study. Ultimately, Alternative 9 was selected as the Preferred Alternative.
Alternative 9 would add one lane in each direction on I-270. A second toll lane would result from converting a currently free lane (restricted to high occupancy vehicles (HOV) for three hours on weekdays) to a toll lane. Thus, there would be one less free lane than now. The mock up shows two toll lanes placed in the middle of the highways in each direction. This may change in the final design. None of the proposed toll lanes are reversible.
MDOT will be collaborating with the Phase Developer on the final design, which MDOT must approve. If they disapprove it, the State and its taxpayers have to pay the Phase Developer’s expenses up to $50 million.
Traffic will undoubtedly increase on the feeder roads during highway construction when highway lanes are closed for road work. Once the new toll lanes are added, traffic may also spill over onto the feeder roads if the general purpose lanes (i.e., free) are congested and the tolls are high. Communities bordering I-270 can reasonably expect an uptick in local traffic but we don’t know exactly where, when, or how much.
The toll lanes would be separated from the free lanes by barriers. This would require construction of new ramps for access to the toll lanes and added shoulders on each side of the barriers. However, until there is a final design from the Phase Developer, it is not possible to know what new on-off ramps/lanes will be added and where or how much land will be needed to connect toll-lane users with local roads.
A government or its agent can take private land for public use under eminent domain. The 2020 Draft Environmental Impact Statement for the project did not mention the need to take homes along I-270. But since the Phase Developer has not yet designed the toll road, no one knows yet whether properties will be taken along I-270.
The MDOT Office of Real Estate has a brochure, Your Land and Your Highways – Your Rights and Benefits Guide, which includes information about the rights of a private property owner. It also includes MDOT’s procedures to purchase land and buildings for public projects; however, the brochure hasn’t been updated since 2013.
According to MDOT, a variety of elements contribute to the need for additional property. These include roadway construction, grading, clearing, landscaping, stormwater management, and noise barrier replacement/construction.
A managed lane is a highway lane that is operated according to a management scheme, such as lane use restrictions or variable tolling, to optimize traffic flow. The tolls would be “dynamically priced” (i.e., variable) to ensure that the managed lanes are providing a consistent congestion-free trip for those willing to pay to travel in the toll lanes. The existing general purpose lanes will remain free to all users.
The tolls will fluctuate throughout the day to ensure that drivers in the managed lanes can go 45 mph. Traffic levels are likely to be higher at rush hour on weekdays and thus rates would be higher during those times. The toll lanes will have multiple segments and each segment will have individual rates.
According to MDOT’s preliminary estimate (see pages 343-345), toll rates would range from 20¢/mile to $3.76/mile for passenger vehicles with an EZ pass. The average at rush hour would be $1/mile during the morning commute heading south and $1.50/mile during the afternoon commute heading north. The average cost for a one-way 7 mile trip between the ALB and I-370 on weekdays is projected to be $4-$5 but higher at rush hour. A study by an independent organization calculated that drivers will pay $50 to go from Frederick to Rockville in the morning rush hour.
The maximum toll rates increase 2.1% plus inflation every year for 50 years, starting in 2021. So, for example, if the toll lanes open in 2028, the maximum rate when the road opens would be $4.35 per mile (in 2021 dollars). The average tolls are projected to be higher by a similar percentage.
Public hearings on toll rates are required by State law; two public hearings are anticipated but have not yet been announced.
No. Experience indicates that tolls alone can’t pay for the high cost of building and operating express toll lanes. Toll roads across the U.S. are falling short of revenue projection.
On January 8, 2020, the BPW voted to amend the P3 Program so that Phase 1 will be delivered first. The plan is to begin with replacing the American Legion Bridge (ALB) and then add managed lanes to I-270. It is not known if the I-270 work will take place soon after work begins on the ALB or not until work on the ALB is completed.
MDOT proposes to bring the Agreement before the MDTA for approval in March 2021 and to the BPW for approval in May. The Agreement will be submitted to the Maryland General Assembly for review in April; however, the legislators do not have approval/ disapproval authority. The toll-setting process is anticipated to be completed in October 2021. The final design for Phase 1 is slated for release by May 2022. After the BPW approves the construction contract, construction can begin, perhaps around Fall 2022. These dates may change because of both internal and external factors.