The Washington PostDemocracy Dies in Darkness

Maryland board approves first contract to design toll lanes for Beltway, I-270

The ‘predevelopment agreement’ gives Transurban and Macquarie the right of first refusal to build and operate the lanes over 50 years

Maryland plans to add toll lanes to I-270 and part of the Capital Beltway, seen here near the American Legion Bridge in July. (Katherine Frey/The Washington Post)

The first contract for companies to design billions of dollars worth of toll lanes for Interstate 270 and part of the Capital Beltway won approval Wednesday from a Maryland board, marking the start of the state’s largest project aimed at relieving traffic congestion.

The Board of Public Works — composed of the governor, comptroller and treasurer — voted 2 to 1 to approve a “predevelopment agreement” with Australian firms Transurban and Macquarie to plan the lanes at their own expense.

Maryland Gov. Larry Hogan (R) and Comptroller Peter Franchot (D), who is running for governor, supported the contract, saying expanded highways would alleviate worsening traffic congestion and its economic effects. State Treasurer Nancy K. Kopp (D) opposed it, saying state officials didn’t know enough about the project’s financial risks and environmental impacts.

Hogan commits money to bus lanes as part of Maryland toll lanes plan for I-270, Beltway

The toll lanes would connect with those in Northern Virginia, forming what supporters say would be a network of express lanes that would allow motorists to buy their way out of congestion. They say it also would provide buses and carpools with a fast, reliable ride at no cost.

Under the contract, the companies will spend up to $54 million to design the lanes over about a year. However, its award is most significant because it grants the firms the right of first refusal for another more lucrative 50-year contract to finalize the design, build the lanes, finance their construction and operate them in exchange for keeping most of the toll revenue.

Hogan on Wednesday called his signature project “historic and transformative,” saying it would result in a new and wider American Legion Bridge, thousands of jobs and long-term economic benefits for the state.

“It will finally begin to solve the soul-crushing, worst-in-the-nation traffic that people have failed to address for 50 years,” Hogan said.

Franchot, the swing vote on the board, said he supported toll lane opponents’ calls for more mass transit but said the state also needs to expand highways with help from the private sector.

“We don’t have unlimited financial resources like the federal government, so I think we have to identify what is available in front of us,” he said. “Kicking the can down a highly congested road is not an option.”

Kopp said she agreed on the need to relieve backups but was concerned that wider highways would worsen climate change. Because the state had denied her office $100,000 to hire outside legal and financial experts to review the contract, she said, she didn’t think the board had enough information to approve it.

She said the state needed to understand the financial details, especially after it had to pay $250 million to salvage the public-private partnership on the stalled Purple Line construction. That project almost imploded over a contract dispute that ended up in court.

The companies will design four toll lanes — two in each direction — for the Beltway between the Virginia side of the American Legion Bridge and the I-270 spur, and then up I-270 to I-70 in Frederick.

The first 12-mile segment — on the Beltway and up I-270 to I-370 — will include replacing the nearly 60-year-old American Legion Bridge with a wider structure. The part of I-270 north of I-370 is scheduled to be built later.

The project is valued at $6 billion, with the first segment valued at $3 billion, Maryland transportation officials said.

Maryland transportation Secretary Gregory Slater said he expects to have a proposed 50-year contract covering the lanes’ construction and operations submitted to the board for approval next summer, at the earliest.

Nearly 500 people tuned in to the meeting’s live stream — an unusually high turnout for the public works board. The contract’s approval Wednesday marked a milestone for the highway expansion project after a rocky couple of months.

The Washington region’s Transportation Planning Board revived the proposal in July after rejecting it a month earlier at the behest of some Montgomery County leaders. That approval came after the Maryland Department of Transportation threatened to scrap $1.2 billion worth of state transportation projects and pledged at least $60 million for new mass transit in the I-270 corridor.

Maryland lawmakers question why state needs private financing for toll lanes plan

Montgomery County Executive Marc Elrich (D) said he was disappointed the board approved the contract before knowing more financial details. Partnering with the private sector would result in higher tolls, he said, because of the private team’s need to turn a profit and repay debt that would be more expensive than traditional government financing.

“I don’t understand how you approve things without at least understanding the financials,” he said after the vote.

Hogan did not say Wednesday why the state wouldn’t provide funding for an independent financial and legal analysis. On Tuesday, his spokesman, Mike Ricci, called requests for further review “clearly a delay tactic” that “won’t work.”

The vote was considered politically tricky for Franchot, because opposition to the toll lanes proposal has been rooted in the Democratic strongholds of Montgomery and Prince George’s counties. It also has drawn criticism from environmental, transit and smart growth advocates — all key constituencies in a Democratic gubernatorial primary.

Supporters of the highway expansions say the lanes would allow motorists to pay a toll when they need a fast or reliable trip and help the Maryland suburbs keep up with Northern Virginia in job growth.

Maryland could face millions in cost risks if toll lanes project stalls

Opponents say wider highways would destroy parkland, harm adjacent neighborhoods and give short shrift to mass transit. Ending the first segment of toll lanes on I-270 at I-370 in Rockville, they say, would worsen the northbound afternoon bottleneck where the highway begins to narrow to two lanes.

Biologists say a wider American Legion Bridge would destroy critical research site

Mirroring Northern Virginia’s toll lanes, toll prices would adjust automatically to keep traffic moving at 45 mph or faster. The regular lanes would be rebuilt and remain free, except for a carpool lane on lower I-270 that would be converted to a toll lane. Under the state’s recently approved proposed toll rate ranges, motorists would pay an average $3 to $5 for a typical seven-mile trip, but more than $18 for a 12-mile trip in rush hour.

Maryland selects Transurban, Macquarie to develop toll lanes for Beltway, I-270

The awarding of the predevelopment agreement has drawn criticism because the state would have to reimburse the companies up to $50 million of their costs if the project gets canceled or doesn’t obtain federal environmental approval. The state shouldn’t assume that risk before that environmental review is finished, opponents have said.

Slater said Wednesday it was “extremely unlikely” that the state would have to pay those costs. If it did, he said, it would be buying the companies’ designs, which it could use to replace the American Legion Bridge “because that work needs to be done, regardless.”

Regional board's reversal revives Maryland toll lanes plan

Hogan and MDOT officials have said the state doesn’t have the funding or debt capacity to finance the toll lanes or replace the American Legion Bridge without sacrificing other state projects. Having companies build the lanes via private financing, Hogan has said, would result in badly needed highway capacity “at no net cost” to taxpayers.