According to press reports, a Central Texas toll road famous for its 85-mph speed limit has hit a financial speed bump. It continues to struggle financially, with revenue of only 30 per cent of original projections. The road is a 40-mile stretch from Seguin to just southeast of Austin. It was designed to relieve traffic from the heavily traveled Interstate 35.
A payment on the $1.18-billion loan used to finance the roadway was due June 30, but the owners of the road don’t have the money due to revenue from tolls being 70 percent below projections. The owners are trying to renegotiate financing with 10 banks. Even if refinancing is successful, Moody’s has downgraded the company’s credit rating to junk status because the road was carrying only half the traffic predicted when it opened.
The tollway was built over the objections of many farmers in the area whose land was legally taken for a highway by eminent domain. For the Trinity River Vision boondoggle, dozens of property owners were forced off their land not to build a highway but for economic development. A large area centered by White Settlement Road, which once flourished in taxpaying businesses, now lies nude and barren waiting for multimillionaire land developers to move in like carpetbaggers. Waving the banner of “flood control” – the promoters acquired this property of “the little people” by eminent domain – or the Sword of Damocles threat thereof.
But it’s NOT primarily for flood control. The lion’s share, $425 million, is for economic development. The Corps of Engineers has estimated that only $10 million is required for flood control. The Eminent Domain Economic Development Juggernaut of 21st Century Texas, unlike the tanks of China, takes neither pity nor note of the poor little property owner standing in defiance.
When I consider a governmental agency using eminent domain to seize private property for economic development under the guise of flood control, I hear the 1763 speech in the House of Commons of William Pitt, Earl of Chatham, ringing down the centuries:
“The poorest man may in his cottage bid defiance to all the forces of the Crown. It may be frail – its roof may shake – the wind may blow through it – the storm may enter – the rain may enter – but the King of England cannot enter – all his force dares not cross the threshold of the ruined tenement!”
The Water Board is about to start building three bridges over a channel yet to be dug. The uncertainty of congressional authorization for the federal half of this $900 million dollar project with the consequent need for more local money is shouting, Turn back! Turn back! Don’t build the bridges! The Trinity River Vision has already soaked up millions of taxpayer dollars. I wonder if Moody’s would give it even junk status.
I asked a prominent banker what he thought an IPO would bring. Looking up from his Wall Street Journal, he gave a thumbs down reply. If the boondoggle, like the Seguin toll road, should come a cropper, the Fort Worth taxpayer may very well be singing with Merle Haggard:
What a fool I was to think I could get by With only these few million tears I’ve cried. I should have known the worst was yet to come And that crying time for me had just begun
Don Woodard is a Fort Worth businessman and author of Black Diamonds! Black Gold!: The Saga of Texas Pacific Coal and Oil Company.