When British Columbia announced its $14 billion plans for new transit
early this week, it upped the stakes for competition among West Coast cities in the transit Olympics. It also injected itself in what will be a hot debate in Washington state, starting in this session.
That's the question of using private investments to build the next generation of transit and highways. It's called P3, for private-public partnerships. You take private money (often pension funds) to cover all or part of the costs of a new project, and then pay off the private partner with tolls or fares or real estate swaps.
Washington House Speaker Frank Chopp, a Seattle Democrat, is stoutly opposed to the notion. At a legislative preview organized by the Seattle CityClub last week, Chopp went out of his way to try to stamp out the idea, which he said was taking root in Seattle. (Discovery Institute, a conservative think tank, is one of the main advocates for the idea, especially as a way to build a deep-bore tunnel under downtown Seattle, to carry Alaskan Way Viaduct traffic.). "It drives up interest charges," explained Chopp, who fought the idea for the Tacoma Narrows Bridge. The rates may not be higher, but interest charges are normally spread over more years than public debt.
Another objection is that a P3 toll road, once built, tries to prevent any competitive other free roads from happening, lest they siphon off paying customers, and that the P3 partnership has an economic interest in spreading tolls to other highways. Unmentioned are many Democrats' fear that P3s jeopardize union jobs.
The formidable obstacle of Chopp notwithstanding, pressure is building for P3s, if only because almost all other methods of paying for failing bridges and bottlenecked highways run into taxpayer resistance, the roads-transit schism, or Tim Eyman. Gov. Gregoire's call for early imposition of tolls on the Evergreen Point Floating Bridge is the entering wedge of the debate. Once the state can prove it can impose tolls, the private companies will be much more interested in investing here.
Curiously, even in more leftist Canada, P3s are very popular, particularly with the Liberal Party. The Vancouver projects will probably imitate the Hong Kong model
, argues Miro Cernetig of the Vancouver Sun.
That means laying out a new transit route, such as the proposed rail line along Broadway to UBC, and designating station areas for high-density hubs. The spike in real-estate value is then tapped to pay for the new transit, often by selling off those hubs to the private sector, who absorb much of the cost of building and running the new transit lines.
Sounds like just the kind of mega-deal that Mayor Greg Nickels loves? Environmentalists would likely support such an approach, since it serves densification goals. The main problem would be labor, but the unions might be assuaged if union pension funds become the "private" in the P3.