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Plan Taps Business to Fix Traffic by Edward Walsh The Oregonian, January 17, 2005

Transportation officials list five Portland-area projects
they want to explore for financing with toll or private-sector involvement

The Oregon Department of Transportation has picked five projects in the Portland area it wants to study in a new program to encourage private businesses to help pay for state road and rail improvements.

Eventually, the program could lead to creation of the state's first toll road or other transportation projects that are financed by user fees rather than state taxes.

The proposed projects include: A four-lane, limited-access road from Interstate 205 to Southeast 172nd Avenue. A later extension of that highway, or another road, to the Damascus area. Widening of the southern section of I-205 from four to six lanes. An 11-mile bypass road through the Newberg-Dundee area. Increased rail capacity at crucial locations where congestion occurs.

Agency officials are scheduled to ask the Oregon Transportation Commission on Thursday to authorize "predevelopment services" on the projects as part of the Oregon Innovative Partnerships Program created by the 2003 Legislature.

"This is a first shot for Oregon. We've never done this before," said James Whitty, manager of the transportation agency's Office of Innovative Partnerships and Alternative Funding.

The Legislature authorized the partnerships program because the state lacks the money to pay for such transportation projects. "The citizens have spoken," Whitty said. "They don't want to give us additional tax dollars. If you don't have gas tax dollars, you try the next thing, which is user fees."

Whitty said other states have similar programs, leading to the construction of toll roads or toll lanes on highways by developers that collect the tolls. But he said a toll road is only one of several ways that a public transportation project could be financed by developers.

If authorized by the Transportation Commission, the first step in the process will be to ask various private entities to submit detailed proposals for building the projects targeted in the partnerships program, Whitty said.

Transportation officials are calling the proposed limited access highway from I-205 to Southeast 172nd and beyond the Sunrise Project. In an analysis, the agency's staff said a new road is needed to relieve congestion on Oregon 212/224, including 7,000 truck trips a day. That congestion is expected to worsen because of projected strong growth in Damascus, which was recently incorporated as a city and placed within the Portland area's urban growth boundary.

Whitty said financing such a road might involve creating a special taxing district or securing contributions from real estate developers that would benefit from its construction.

Congestion is also worsening along the southern portion of I-205, where traffic has increased by 22 percent in 10 years, according to the agency's analysis. "It's clogged during unpredictable times and awful during rush hour," Whitty said. "Widening is needed, but we don't have the dollars for that."

The state faces a similar situation along Oregon 99W. According to the report, "over the past decade, traffic on Oregon 99W has increased by about 40 percent and congestion has reached unacceptable levels through Newberg, Dundee and the surrounding areas."

To solve the problem, the agency's staff has developed a three-phase plan to build an 11-mile bypass starting at the east end of Newberg and ending near Dayton and the junction with Oregon 18. The department estimates the project would cost $310 million, but that money is not available.

Some of the Oregon 99W traffic involves trips to the Chinook Winds and Spirit Mountain casinos, and Whitty suggested that could lead to a private financing arrangement. He said it might involve a "shadow toll" under which the casino owners would agree to pay for any increase in business that was attributable to the new road.

"It's merely a financing mechanism," Whitty said. "In this case, the casinos would be the beneficiaries, but it can be done for any kind of business. It shows how creative you can get."

In addition to the three highway projects, the agency is seeking permission to solicit proposals from private interests for two other endeavors. One involves state highway maintenance facilities. Department officials said many were built in once-remote locations but are now "in the middle of prime, developable properties."

Their report said the best use of these properties might be to swap them with developers in return for other property or services.

The fifth proposed project would attempt to relieve railroad congestion, for example, by increasing rail capacity at key chokepoints. The agency's analysis said potential beneficiaries -- and therefore potential financing partners -- include the major railroads, the Port of Portland and local and regional shippers.