Why the outlook for Tampa Bay's $6 billion highway expansion is hazy

The Florida Department of Transportation argues that the Tampa Bay Express project will ease congestion. This view looking north shows the Interstate 275-Interstate 4 interchange in Tampa.
The Florida Department of Transportation argues that the Tampa Bay Express project will ease congestion. This view looking north shows the Interstate 275-Interstate 4 interchange in Tampa.
Published June 19, 2016

State officials justify a $6 billion interstate project by making a bold claim: It will ease gridlock throughout the Tampa Bay area.

According to the Florida Department of Transportation, Tampa Bay Express will "reduce traffic time and traffic congestion for everyone."

That claim has been repeated in brochures, videos and testimonials that are part of a taxpayer-funded public relations campaign touting the project.

Just one thing is missing.


Even though construction is slated to begin next year, state officials do not have a comprehensive forecast of whether the project will draw enough traffic to make it viable, though they have made preliminary projections.

A final forecast is necessary because TBX isn't just any road project. It's a toll project and therefore must show it can make money. Every time Florida plans a new one, state officials ask a consultant to forecast how much traffic it will handle and how much money it will produce in tolls.

"We're in the middle of that right now," said Debbie Hunt, director of transportation development for the DOT's Tampa district.

That such research isn't complete surprised Les Miller, the Hillsborough County commissioner who is chairman of the Hillsborough Metropolitan Planning Organization that will vote on the project on Wednesday.

"Why are we going through this process?" Miller asked. "This really, really perturbs me. I am not a happy camper."

Given Florida's track record, however, the forecast is almost certain to show that TBX will make money and ease congestion.

It will also most likely be wrong.

• • •

TBX will add 90 miles of toll lanes to otherwise free highways — Interstates 4, 275 and 75 — in Pinellas and Hillsborough counties.

The lanes are supposed to provide a faster ride for drivers willing to pay a toll. The price would fluctuate as traffic got heavier or lighter. The more traffic, the higher the toll. A similar project in Miami charges up to $10 a trip, but DOT documents indicate TBX may charge a lot more.

Gov. Rick Scott and state lawmakers oppose increases to the gas tax that financed the interstate system in the 20th century. Tolls are the substitute.

Yet the toll industry that Scott hopes will pave the Florida of tomorrow has a shaky foundation.

That's because the companies that provide traffic and revenue projections have repeatedly produced forecasts that proved to be wildly optimistic.

One of them, URS, has provided traffic and revenue projections for Florida toll roads for 60 years. Over and over, URS, a California-based global giant in transportation engineering and planning with $11 billion in 2013 revenue, kept getting hired by the state. And over and over, URS got it wrong.

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How wrong? URS said that the Polk Parkway would make $100 million by 2020. Seven years later they cut that prediction to $15 million. It said the Suncoast Parkway would rake in more than $100 million in 2006. The road made less than $20 million that year.

URS retained DOT as a client until 2014, when the company was acquired by a rival, Aecom, for $6 billion. Since 2000, the DOT has paid URS/Aecom a total of $143.2 million. About $28.6 million of that was on toll studies, according to the DOT.

Like URS, Aecom is a global giant in transportation consulting based in California, with revenues of nearly $18 billion and 95,000 employees in 150 countries. Like URS, it has been a poor forecaster.

Aecom has spent years battling legal claims in Australia of more than $6 billion. Hundreds of investors say that's how much Aecom owes them for relying on its predictions for projects where three-fourths of the traffic never showed up.

According to one of the suits, Aecom predicted that one toll tunnel near Brisbane would draw 101,129 drivers in 2012. The actual number of drivers: 21,873.

Aecom's Australia division paid $201 million to settle one of the lawsuits, and announced it will no longer do traffic and revenue projections in that country.

Erin Johns, Aecom's spokeswoman, declined to comment on either the Australia case or how the company goes about making its predictions. As for Florida, she referred all questions to the DOT.

Aecom is one of the consultants working on TBX.

Another company that often provided off-base projections for toll roads was called Wilbur Smith Associates.

Four years ago, an analysis by a retired federal economist of 26 toll road projects that employed Wilbur Smith Associates found that the company's forecasts were too high by an average of 127 percent.

In 2011, Wilbur Smith Associates merged with another company and became CDMSmith. The DOT hired CDMSmith to do its TBX traffic and revenue projections. CDMSmith officials did not respond to repeated requests for comment.

• • •

As flawed as URS, Aecom and Wilbur Smith forecasts have been, they haven't been wildly irregular — at least by industry standards.

In Texas, Indiana, California, Virginia and Alabama, toll road consultants have repeatedly made predictions that a road or bridge would make more money than it did. Sometimes a lot more. For one Alabama toll road, the prediction was off by 80 percent.

The result of these misfires: ruined investors, embarrassing bankruptcies, allegations of fraud.

In almost every case, the flubbed forecasts made the same mistake: Too much traffic. Too much revenue.

Robert Bain calls this phenomenon "optimism bias".

A former transportation financing expert for Standard and Poor's, Bain said sunny forecasts keep the client happy.

He's reviewed more than 100 toll projects worldwide and knows 21 ways consultants fiddle with forecasts to produce "good numbers."

"The standard of some traffic and revenue studies, supporting infrastructure investments worth billions of dollars, is truly appalling," Bain said. "Forecasts are commonly used to 'sell' deals to potential investors, insurers or rating agencies — so they are exposed to manipulation."

A preliminary projection of TBX traffic and revenue was done by URS in 2013. It made these estimates not knowing the number of express lanes that might be built, the length of the project, the entry and exit points, the capacity of the general use and express lanes and any competing routes.

Yet somehow its makers calculated that the TBX toll lanes would rake in $66 million in 2020 and $170 million by 2050 — an increase of more than 150 percent in 30 years.

• • •

Development once drove Florida to create more toll roads.

In the late 1980s, the state ran out of money to keep up with the demand for new highways. State legislators wouldn't vote to raise gas taxes. In a bind, then-Gov. Bob Martinez's administration turned to toll roads as a way to catch up.

Now toll roads drive development.

When Florida legislators and Scott abolished the state's growth management agency in 2011, the DOT became the state's de facto determiner of where growth would occur. Where new roads go, development becomes possible.

In the same year, Scott's then-DOT secretary, Ananth Prasad, told road builders that Florida would rely entirely on tolls to pay for everything from widening interstate highways, like I-275 and I-4, to building new expressways like the Suncoast Parkway.

Scott's DOT has pursued just that strategy, even in the Jacksonville area, where voters decreed in 1989 that they didn't want any more toll roads. Including the TBX project, the DOT says it is now adding 193 miles of new toll facilities to Florida's highways.

As it makes this crucial investment, DOT officials said they aren't fazed by inaccurate forecasting.

Initial projections, which tend to be the ones that are the least accurate, get the project green-lighted. To the DOT, those projections are used "to judge general feasibility, need and interest," Florida Turnpike Enterprise division spokeswoman Christa Deason explained.

More accurate and precise projections are used later for investment purposes, which to DOT officials means that those are the ones that should count.

"Our guys are very good at forecasting, because they have to be," Deason said. "We have a history of success."

Yet even then, the forecast numbers have been off. DOT policy says final forecasts use the same assumptions on things like population growth as the earlier, less accurate projections.

The DOT has been able to absorb the losses from these unneeded roads because tolls collected from the main segment of the Florida Turnpike from Miami to Orlando, and other long-standing toll facilities such as the Sunshine Skyway bridge, covered the shortfalls.

Motorists using the Skyway and the turnpike in Central and South Florida have been subsidizing the failures of the state's other toll projects.

• • •

Toll roads are strongly favored by the Reason Foundation, a conservative think tank that Scott has cited as his source for information and political positions. Its co-founder and transportation coordinator, Robert Poole Jr., lives in Broward County and served on Scott's transition team.

Poole created the concept of toll lanes in the 1980s and has pushed them ever since. He says toll lanes could pay for remaking the entire 46,000-mile interstate highway system over the next two decades. Express lanes on I-95 in Miami and Broward that opened in 2008 were his idea.

But even Poole concedes that the inaccurate toll road forecasts are a problem. He likes one of Bain's suggestions for improving the system — a suggestion the DOT has yet to follow.

"You have to get an independent expert to review them and determine what's real and what's smoke and mirrors," Poole said.

The toll industry knows that it's got a problem with forecast manipulation, said Javier Rodriguez, executive director of the Miami-Dade Expressway Authority and the immediate past president of the International Bridge, Tunnel and Turnpike Association.

If the government staff pushes for good numbers to justify a bad project, the project will still be bad — but it won't look like it, not at first, not until all the expected development never happens.

"The old adage about 'build it and they will come' is not true," Rodriguez said.

• • •

The Florida DOT's bad toll projects may not go bankrupt. They do come with other costs.

Borrowing against future toll receipts to pay for building a highway drives up the cost, compared to the traditional method of using gas tax money, said Phineas Baxendall, former transportation director of the U.S. Public Interest Research Group.

Then there's the higher operating cost. A toll road costs more to run than a regular highway. Toll booths, gates and collection technology all cost money.

A 2013 study by the Congressional Research Service found other drawbacks. Putting tolls on a highway adds to the cost of transporting goods and services, driving up prices. It also has a larger impact on poor and lower middle class drivers who are less able to afford a toll.

The MPO is slated to decide Wednesday whether to include the toll lanes of TBX in its yearly transportation improvement plan. If the agency says yes, the DOT will start construction next year. Miller, the chairman, says he'll vote no.

One of the 16 MPO members knows the toll road business better than the rest: Joseph Waggoner, executive director of the Tampa-Hillsborough Expressway Authority.

Waggoner said he's fine with the MPO moving ahead without a final forecast. Preliminary projections are good enough, he said.

Yet he was unable to explain exactly how the preliminary forecast was done.

But he said any problem with bad numbers is not really the MPO's headache — it's the DOT's.

"They're the ones," he explained, "who have to make it work."

Times staff writers Caitlin Johnston and Anthony Cormier and researcher Caryn Baird contributed to this report. Contact Craig Pittman at craig@tampabay. Follow @craigtimes.