As group eyes money for the state, commuters could pay more to park
By KEVIN LANDRIGAN
New Hampshire Union Leader
April 28. 2018 10:40PM
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A traveler enters the state-run bus terminal off Exit 5 in Londonderry last week. A plan to privatize the state bus terminals and parking lots is on the drawing board.
eight-person commission is inventing the wheel when it comes to forming public-private partnerships along the state's transportation network.
The success in 2015 of turning the Hooksett rest areas into full-service restaurants, gas station pumps and large state liquor stores moved the Legislature to create a group to explore whether these so-called "P3" projects could take hold here in New Hampshire.
Unlike Hooksett, where the state owned the project and gave the developers a long-term lease, P3 projects typically include some private ownership right off a highway.
Over the past nine months, the group has reviewed more than six proposals ranging in scope from privatizing the entire turnpike system to getting a business to sponsor a scenic byway in the Lakes Region.
"We are learning through this project," said Transportation Commissioner Victoria Sheehan, the chairman and nonvoting member.
While its goals are lofty, the commission decided recently to start small in the hopes of creating a template to help make more complex and costly projects a reality.
The commission recently gave clearance to start on three fronts that pose escalating challenges - private bus terminals, privately owned or leased welcome centers and an ambitious commuter rail station and parking garage design for Manchester's Millyard.
Former House Public Works and Highways Committee Chairman Edwin Smith of Hinsdale is one of two House appointees on the panel.
"I feel like it makes sense to walk before we can run," he said. "Since this is such a different animal for the state of New Hampshire, let's get the process down pat with something in the short term that's doable and would show some real returns."
The commission will soon inform the Legislature the first effort will examine turning over state bus terminals and park-and-ride lots to private leasing or outright ownership. Commuters would have to start paying to park.
The state will seek proposals from any private owner of properties right off state highways, but one candidate, Concord Coach Lines, has already expressed interest in a private lease of the bus terminal off Interstate 93 at Exit 5 in North Londonderry and the park-and-ride lot off Exit 2 in Salem.
Concord Coach picks up commuters at those locations and others, bringing them back and forth to Boston each day.
The consortium has retained an engineering firm to sketch an outline that envisions a multi-level parking garage with nearly 1,000 spaces right off a redesigned Exit 6 on the F.E. Everett Turnpike.
"Dean Kamen has had this vision for some time about giving workers and tourists easier access to the Millyard via a commuter rail link and/or bus service," said Ken Rhodes, an engineer working on the plan.
If commuter rail expands from Massachusetts, this proposal could include a spur onto tracks running the length of the Millyard with a station right near this parking garage. Shuttle buses could bring these workers and tourists directly to the area, Rhodes said.
The commission voted to let developers - at their own risk - pursue the plan even as the state continues to design what a reconfigured Exit 6 would look like.
As far as privatizing turnpikes, the commission thinks that's a bridge too far.
The idea, proposed by a national turnpike developer, failed to show any financial benefits for the state, according to Sheehan, the DOT commissioner.
Further, federal law prevents the state from privatizing any highway built with federal money, which rules out virtually all of I-93 and I-95.
President Donald Trump's federal infrastructure bill pending in Congress could change that as he seeks to give private industry broader powers to build commercially off the interstate system.
But Sheehan said having a state P3 entity lease a stretch of turnpike to a private business would require state legislative approval and presents a host of complications, including the fate of state workers who maintain the roads and setting fees for tolls, which is currently controlled by the governor and Executive Council.
"We felt it was not appropriate to take anything of that size and scale on as our first effort," Sheehan added.
Gov. Chris Sununu named to the commission businessman Kristyn Van Ostern, wife of his 2016 Democratic rival Colin Van Ostern of Concord, and Southwest Region Planning Commission Executive Director Tim Murphy. Others on the panel are University of New Hampshire Vice President for Finance and Administration Chris Clement, Londonderry Town Manager Kevin Smith and ex-state Rep. Betsey Patten of Bow.
Jalbert Leasing Inc. has also offered to take over ownership of bus terminals in Dover and Portsmouth. James Jalbert said in his proposal that free parking has "resulted in the abuse" of those lots.
"Rates will be similar to and will not exceed transit-oriented parking in Maine, New Hampshire and northern Massachusetts," Jalbert said.
Patrick Herlihy, the state Department of Transportation's director of aeronautics, rail and transit, said this requires approval from the Federal Transit Administration and Federal Highway Administration because both supplied money for them.
The commission hopes to have a request for proposals out by this summer.
As for rest areas, the one specific plan to come to the commission was from Alex Ray, the owner of the Common Man chain of restaurants and leader of the development group that leases the Hooksett complexes.
Ray owns a 5.5-acre site right off Exit 23 on Interstate 93 in Ashland and proposes a smaller scale project than Hooksett's, this one along Route 104 to include a state welcome center, restaurant and an existing gas station, to be called New Hampton Commons.
During the last recession, tight state budgets led to the closure of several state-owned rest area properties, including ones on I-93 northbound in Canterbury and southbound in Sanbornton.
A 2017 study on future rest areas endorsed exploring private ownership. The DOT is targeting two locations for new rest areas - one on I-93 between Concord and Littleton, and the second along the Spaulding Turnpike on the Seacoast.
Then there's the Manchester Millyard concept known as the Millyard People Mover, the brainchild of inventor Dean Kamen along with other private millyard partners known as the DEKA/Hitchcock Consortium.
Private turnpikes were common in post-Revolutionary War America
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Laura Cerra pays for parking after finding a spot on Commercial Street in Manchester’s Millyard on Friday. A commission is exploring a parking garage and commuter rail station proposal from inventor Dean Kamen for the neighborhood.
President Trump’s call to rebuild the nation’s infrastructure by “tapping into private sector investment” isn’t a new idea.
After the American Revolution, the former colonies followed the British model and started in 1792 to issue to private companies hundreds of charters to build roads with the authority to charge tolls.
The term turnpikes was born from the “pikes” or spiked barriers placed in the middle of private roads to get travelers to stop and pay the fee.
These charters expanded and flourished in the Northeast, but ultimately stalled because private companies only wanted to build short stretches of roads to serve their own limited base of customers.
Private roads went out of fashion in the late 19th century, as reformers sought to put everything from utilities to roads under centralized control and regulation. Toll roads became the property of public authorities, failed to meet revenue targets and needed taxpayer bailouts.
The federal interstate system became the largest public works project in American history in large part because the United States looked to invest inward in the mid-1950s after World War II.
One of the most heralded, public-private road projects in the nation turned controversial in Indiana while Vice President Mike Pence was its governor.
In 2006, Indiana sold a 75-year lease on a 157-mile toll road in the north of the state for $3.8 billion.
The profit allowed the state to build 413 miles of new highway and resurface another 4,000.
But the firm that bought the toll rights overpaid and went bankrupt in 2014 under Pence’s watch.
Other investors stepped in during 2015 to take over that lease, and the Manhattan Institute, a free-market think tank, maintains that the state profited from the private firm’s overpayment.
Analysts say the U.S. is well behind other countries in these so-called P3 partnerships. The United Kingdom reports nearly $6 billion a year of them, while the much larger U.S. in 2015 had only five P3 deals close, worth $2.4 billion.
While 20 states, including New Hampshire, are exploring P3 projects, most states have never closed a deal.
“A lot of the investors have been burned in processes that went nowhere and cost a lot of money through broken deal expenses,” said Thomas Lefebvre, managing director of I Squared Capital.
Analysts say these ventures have become so risky that the leaders of some state, local and county governments have embraced a “break fee” that would have taxpayers reimburse a private developer if the P3 project fell apart due to political opposition or changing economic conditions.
Former state Rep. Edwin Smith, a Hinsdale Republican, said this effort should never abandon state control over its highway system.
“At the end of the day, New Hampshire turnpikes aren’t broken and don’t need fixing,” Smith said. “If we can encourage private development along our major roads and provide greater services to our citizens and tourists, that’s all to the good. But there’s no need to abandon what works in New Hampshire. We’ve still got highways that in many cases are the envy of states around us.”
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