Dulles Greenway: Deal or No Deal?
Nossaman Partner Simon Santiago was quoted in the Washington Business Journal article "Dulles Greenway: Deal or no deal?' about a local official's proposal for Virginia to buy the 14.3-mile Dulles Greenway from the road's private owner, Toll Road Investment Partnership II LP ("TRIP II"). The article stated that 20 years after the state signed an agreement with the private entity to build and operate the Dulles Greenway, the highway is saddled with debt and increases in tolls are frustrating commuters.
Despite the restructuring of debt and increases in tolls, the article reports that revenue is up only slightly for TRIP II's owner, Macquarie Atlas Roads and Macquarie Infrastructure Group. The article states that TRIP II was purchased by Macquarie in 2005 for $617.5 million, including a $535 million payout to The Shenandoah Group, the family-held company led by Maggie Bryant who pioneered the highway.
The article reports that Virginia would have taken over control of the highway in 2036 when the deal with TRIP II was originally set to expire, but TRIP II was struggling to recoup its costs so the State Corporation Commission extended the period by 20 years to 2056 and agreed to a plan to raise tolls.
"They're definitely in there because they want to run a successful business," Mr. Santiago is quoted as saying about Macquarie. "That's what it boils down to. Like any investor, they want to invest in an asset that would provide a realistic opportunity to recover a reasonable rate of return."
Mr. Santiago continued, "It's just like selling any other service. You're not going to price yourself out of the market."