BEREA: Ohio Turnpike Commission Executive Director Rick Hodges is urging critics of the idea of leasing the turnpike to slow down.
The 241-mile toll road isn’t up for lease now and may never be, he said during a recent interview in his office that overlooks the highway.
The Ohio Controlling Board last week approved a $2.85 million contract for KPMG Corporate Finance LLC to study the turnpike and the 101 rest stops on the state’s free interstates. The goal, pushed by Gov. John Kasich, is to see whether there’s a way to turn those assets into needed cash.
“Everybody needs to be open-minded,” Hodges said about the process.
Turnpike officials are cooperating with the state and will help KPMG with its “opportunity analysis,” he said.
The analysis will look at options ranging from leasing the highway to leveraging the commission’s bonding authority to turning it over to the Ohio Department of Transportation to doing nothing. The study is expected to take at least six months.
“At the very least, it’s going to be a great tool for us going forward,” said Hodges, who was appointed to the position in November. “We’ve been here for 60 years. The road is 60 years old. Our business model is essentially 60 years old and I think we owe it to the traveling public to go through this kind of review.”
He said he favors no option.
The turnpike wouldn’t be the first highway leased in the United States. Indiana leased the 157-mile Indiana Toll Road for $3.8 billion in 2006 to the Spanish-Australian group Cintra-Macquarie for 75 years. The state used much of the money for highway projects.
A year earlier, the same group leased the 7.8-mile Chicago Skyway from the city of Chicago for 99 years in exchange for $1.83 billion.
A plan to lease the Pennsylvania Turnpike fell through in recent years because of opposition.
The Ohio Turnpike, which operates independently of state government, had $254 million in revenue last year. Most of it — $231 million — came from tolls. Last year, 49 million vehicles used the highway.
The possibility of leasing the turnpike — which crosses northern Ohio — has faced severe criticism from many Democratic leaders in Northeast Ohio, including Summit County Executive Russ Pry. Cuyahoga County Executive Director Ed FitzGerald has announced plans to conduct his own study, saying he believes the state-funded analysis will be biased.
Pry said he will examine the KPMG and FitzGerald studies. But he said that his opinion has been influenced by a nonpartisan report by the Akron Metropolitan Area Transportation Study that concluded the “costs greatly outweigh any benefits” in leasing the turnpike.
“AMATS had no ax to grind at all,” Pry said.
Rumors about tolls
Critics have predicted that tolls would rise, maintenance would go south and traffic would be diverted onto local roads.
But Hodges, a former Republican state lawmaker who represented Northwest Ohio from 1993 to 1999, said the only way to make money on the turnpike is to have motorists traveling on the highway. Why would an operator make changes that drive people off the roadway, he asked.
“We still struggle with the parallel routes and the reason is because we have parallel routes. Most toll roads don’t,” Hodges said.
“The only way anybody can make money on the turnpike is to have people drive on it. So I don’t think it’s good to scare folks that tolls are going to go up or that traffic is going to be diverted right now because there are some built-in limitations.”
He also disputed theories that the turnpike raised its rates in January to make it more attractive to investors. Those rate increases were planned back in 2009. Ohio Turnpike rates remain among the lowest in the country, he said.
$16.50 to cross state
For the average car, it costs $16.50 to travel the length of the turnpike. For comparison, it costs $30.80 to travel the length of the Pennsylvania Turnpike (not including a $4.75 gateway fee entering the state eastbound); $22.75 to travel the New York Thruway; and $7.50 for the Indiana Toll Road.
“Those of us along the corridor have a unique interest in the turnpike,” Hodges said. “I’ve lived almost my entire life within five miles of the turnpike. … That said, we drive on all the roads, not just the turnpike. And the state is facing real infrastructure needs that affects us all.
“The stakes are pretty high here. In the short term, it’s about jobs and construction spending, construction jobs. And in the long term, it’s about reinvesting in the state’s infrastructure.
“So I think we all need to be part of this debate and we all need to approach it with an open mind and we all need to participate.”
Rick Armon can be reached at 330-996-3569 or email@example.com.