Tuesday, April 01, 2025

Astrodome to become SpaceX Mission Control & Starship Facility Under Musk Deal!

In a stunning development poised to reshape Houston's aerospace identity and finally resolve the decades-long Astrodome question, sources confirmed early Thursday that Harris County has reached a landmark agreement with SpaceX to transfer the iconic structure to the private space exploration company. Following months of closely guarded negotiations, the deal paves the way for the "Eighth Wonder of the World" to be transformed into a cutting-edge mission control center and Starship development facility, tentatively dubbed "StarDome Houston."

Details outline a multi-faceted agreement where Harris County relinquishes control of the Dome and immediate surrounding acreage in exchange for significant long-term investment commitments and ambitious job creation targets from SpaceX, reportedly numbering over 5,000 high-technology positions within the first five years. 

Harris County Judge Lina Hidalgo, in remarks prepared for a later announcement, is expected to hail the agreement as a "transformative public-private partnership that honors Houston's legacy as Space City while boldly charting its future." The move effectively ends years of debate and uncertainty surrounding the Astrodome's fate, shifting from preservation concerns to integration within one of the world's most dynamic technology ventures.

SpaceX's plans for the Astrodome are nothing short of audacious. The company intends to leverage the Dome's vast, unobstructed interior volume – a key selling point during negotiations – to establish a primary Mission Control hub ("Mission Control Alpha") significantly larger than its current Hawthorne operations. Furthermore, conceptual plans reveal the integration of advanced manufacturing and assembly capabilities specifically geared towards the Starship program. This includes the potential for vertical assembly of Starship vehicles within the Dome structure itself, necessitating some architectural modifications.

Elon Musk, SpaceX CEO, provided a characteristically brief statement via internal memo: "Houston has the energy, both literal and figurative. The Astrodome provides the volume needed for true interplanetary scale. Essential for making humanity multi-planetary. Plus, the acoustics are great! To Mars! 🚀"

The integration of such a high-tech industrial and command facility into the existing NRG Park ecosystem presents obvious logistical challenges. Coordination between SpaceX operations, Houston Texans games, Rodeo Houston, and other events will require an unprecedented scheduling matrix. Discussions reportedly include SpaceX providing "enhanced aerial surveillance and communications bandwidth" during major events as a goodwill gesture. Traffic implications are addressed via proposed dedicated Boring Company employee tunnels connecting the site to key transportation corridors like Loop 610 and Highway 288, aiming for "minimal net increase in surface vehicles."

The transformation of the Astrodome into StarDome Houston marks the end of one era and the dramatic beginning of another. While questions remain about the technical feasibility, environmental reviews, and the precise impact on the surrounding community, the deal undeniably injects a powerful new variable into Houston's economic and cultural landscape. Whether this bold gamble solidifies Houston's position at the forefront of the new space race or creates unforeseen urban complexities remains to be seen, but the Eighth Wonder of the World is, it seems, finally poised for a purpose as ambitious as its initial conception.

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Hope you enjoyed this year's April Fools post ;-D (with a little help from AI)
Here are previous years if you missed 'em and would like a chuckle:

Saturday, March 29, 2025

Metro's 2024 Annual Report: finally heading the right direction

This week we have another excellent analytical guest post from Oscar Slotboom.
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The past 14 months have been very eventful for Metro. In February 2024 the nine-member Metro board welcomed six new members including new Chairwoman Elizabeth Brock, who has operational experience in the private sector. The new leadership appears to be committed to improving Metro's operational and financial performance.
In June Metro suspended work on the University Corridor Bus Rapid Transit (BRT) due to its cost increase to $2.2 billion. This was a very favorable development, both from the financial perspective and for preventing the collateral damage of removing traffic lanes on Richmond and Wheeler. In September Metro paused plans for the Inner Katy BRT to study converting it to HOV lanes. In February Metro unveiled its new MetroNow initiative, which seeks to improve ridership by focusing on safety, cleanliness and reliability.
This is all good news for the management and future of Metro, although the efficacy and cost-effectiveness of MetroNow remains to be seen. Metro's 2024 financial statement shows that Metro continues to make steady progress in improving its financial and ridership performance. (2023 analysis for reference)
Highlights of the 2024 Financial Statement
2024 ridership was 75.9 million boardings, up 10.6% from 2023. Ridership remains 15.7% below the pre-Covid 2019 ridership of 90 million, and 26.2% below the 2006 ridership peak of 102.8 million.
The subsidy per boarding was $12.37, down from $13.93 in 2023 ($14.27 inflation-adjusted). The subsidy is now only $1.73 higher than the 2019 pre-Covid inflation-adjusted value of $10.64.
Total operating expense was $988.4 million, down from $1000.6 million in 2023, which is down 3.6% on an inflation-adjusted basis.
Local infrastructure assistance was $249.9 million in 2024, 24.2% of $1033.6 million sales tax revenue. This brings the assistance close to the traditional target value of 25% of sales tax. Infrastructure assistance was 18.8% of sales tax revenue in 2023.
Fare revenue increased 7.4% from $46.4 million to $49.8 million. But since boardings increased faster, the average fare collected per boarding was $0.656 in 2024 compared to $0.660 in 2023, which is a 2.87% drop on an inflation-adjusted basis. Adjusting past fares for inflation, the average 2024 fare of $0.656 is the lowest value in the past 25 years and almost surely the lowest in Metro's history.
In 2024 Metro's employee count had the biggest increase in the past 25 years, jumping by 635 employees, from 3992 in 2023 to 4267. It's unclear if this employee increase can be attributed to the MetroNow initiative, since the headcount was for fiscal year 2024 which ended in September and MetroNow was announced in February 2025. This increase would sound an alarm if it is due to expansion of headquarters bureaucracy, but is less of a concern if it is to replace contractors or reduce overtime. It's interesting to note that in the past 25 years, Metro achieved its peak ridership in 2006, the same year it had the lowest employee count, 3356. (see chart below)
Outlook
Metro's finances and ridership are going in the desired direction, with its new board focused on better operational performance and ridership continuing to recover from Covid. The suspension of the costly University BRT and Inner Katy BRT will help future financial performance. A realistic and achievable goal is to reduce the boarding subsidy from its current value of $12.37 to a value at or below the pre-Covid inflation-adjusted value of $10.64. Of course $10.64 is still a very high subsidy, 117% above the 2001 inflation-adjusted value of $4.90. With continued financial discipline and increasing ridership, progress can continue to be made to reduce the high taxpayer subsidy.
Charts
The blue line shows the ongoing ridership recovery from the 2020 Covid collapse, and the red line shows the decrease in operating expense in 2024. These two trends resulted in reduced boarding subsidy.
This chart shows progress in reducing the boarding subsidy from its 2021 inflation-adjusted value of $19.51 to $12.37 in 2024. Reducing the subsidy to the pre-Covid value of $10.64 is within reach.
This chart shows monthly Metro ridership since Covid, including the first five months of fiscal year 2025. Bus ridership is within 5% of pre-Covid values. Metro reached a post-Covid high in October 2024, 10% below the pre-Covid one-year average. This chart suggests that fiscal year 2025 ridership will be around 12% below the pre-Covid value, compared to 15.7% below pre-Covid ridership in 2024.
This chart shows principal Metro budget items. Changes in 2024 were incremental compared to 2023, with a noticable uptick in infrastructure assistance.
This chart shows fare revenue. Fare revenue increased in 2024 to $49.4 million, but the average fare per boarding dropped to $0.656, the lowest in the 25 year period of the plot and almost surely the lowest in Metro history on an inflation-adjusted basis.
Due to lower cost per boarding, the average fare as a percent of operating cost per boarding showed a slight uptick, from 4.52% in 2023 to 5.04% in 2024.
Metro's marketing expense was $16.1 million in 2024, down from $18.1 million ($18.6 million inflation-adjusted) in 2023.
Metro's employee count had a huge jump in 2024, increasing by 635 employees. This would normally raise an alarm, since those employees are an annual cost that's probably around $50 to 60 million. But if the new employees reduce costly overtime or contractors, or result in increased ridership, it may not be financially detrimental. Metro achieved its peak ridership in 2006 with its lowest headcount in the 25 year period, 3356 employees.

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Saturday, March 08, 2025

The best posts from the first 20 years and 2.3 million pageviews

Today is the 20th (!) birthday of Houston Strategies with our 1,412th post.  It's hard to believe that two decades have passed since I started this blog, and it's been an incredible journey. It seems like just yesterday we were celebrating 1.5 million pageviews at the 15-year mark.  Obviously things have slowed down a bit in recent years (this is my first post of 2025, lol).  In honor of this milestone, I've decided to update my best posts from the first 15 years - which is now five years out-of-date - by pulling from my annual highlights posts.  As you skim this list, I hope you find some of interest that you missed, forgot, or may have been posted before you discovered Houston Strategies.  Enjoy.

For those of you a little put off by the old-style webpage design, I should take this opportunity to mention again that it is sort of stuck, and that's because I have a legacy blogspot template that can't be upgraded to a newer design without either a lot of work outside my expertise or losing my archive of old posts.  One of the penalties for being an early blogger, lol.  Hope you don't mind the old format.  I'm kinda assuming the content matters more to my readers than a slick modern design ;-)

Reflections and Looking Ahead
Reaching 20 years and 2.3 million pageviews is a significant milestone for Houston Strategies. It's a testament to the power of ideas and the importance of ongoing dialogue about how we shape Houston. As I reflect on the past two decades, I'm filled with gratitude for the readers who have joined me on this journey. Your engagement, feedback, and support have been invaluable.

Houston Strategies will continue to explore the ever-evolving landscape of urban planning in the Opportunity City, seeking innovative solutions to the challenges facing Houston and advocating for policies that create a better and more vibrant city. Here's to the next chapter!

As always, thanks for your readership.
-Tory

Top posts and big ideas from the last five years
15 absolute all-time favorites from the first 15 years
  1. A new brand identity for Houston: Houspitality
  2. MaX Lanes: A Next-Generation Strategy for Affordable Proximity
  3. MetroNext's bold moonshot opportunity
  4. Elements of an Opportunity City
  5. Ten years of Houston Strategies retrospective
  6. Maximizing Opportunity Urbanism with Robin Hood Planning (COU White Paper)
  7. How Opportunity Urbanism can save the global economy (Part 1Part 2)
  8. The Ultimate Houston Strategy
  9. Seizing the Astrodome opportunity to establish Houston's new global identity
  10. My TEDx Houston talk, mostly about Houston (a summary of some of my better ideas from this blog)
  11. A Pragmatic Approach to Houston’s Future (part 1part 2)
  12. A Map to Houston’s World-Class Future (part 1part 2)
  13. Architects vs. Economists (the planning vs. free-market spectrum)
  14. Applying Jane Jacobs' 4 tenets of vibrant neighborhoods to car-based cities (mobility/draw-zones for vibrancy)
  15. Why does Houston have such a great restaurant scene?
I also want to acknowledge Oscar Slotboom's deeply analytical and wonderfully insightful guest posts over the last few years: 
Finally, the best posts from the first 15 years year-by-year are here and the 10-year retrospective is here.

Thank you again!

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Tuesday, December 31, 2024

2024 Highlights

Happy New Year! Time for our annual round-up of the best posts of 2024, with this year featuring as many (or more!) great posts from Oscar as from me. If you missed them earlier this year - or just didn't have time to read them then - hopefully the holidays are a more leisurely time for perusal. 

I'd also like to thank MyBestPlan for their ongoing generous support. They always have the best and cheapest electricity plan for your Texas home. They have saved me a ton of money on electricity, and I suggest you contact them for a free, no-obligation savings estimate. Mention “HS” so they know you’re with us.

These posts have been chosen with a particular focus on significant ideas I'd like to see kept alive for discussion and action, and they're mainly targeted at new readers who want to get caught up with a quick overview of the Houston Strategies landscape. I also like to track what I think of as "reference posts" that sum up a particular topic or argument; and, last but not least, they've also been invaluable for me to track down some of my best thinking for meetings or when requested by others (as is the ever-helpful Google search).

Don't forget we offer an email option for the roughly once/week posts - see the Google Groups subscription signup box at the bottom of the right sidebar. An RSS feed link for newsfeed readers is also available in the right sidebar (I'm a fan of Feedly).

2025 marks 20 years of Houston Strategies! As always, thanks for your readership. And don't forget the highlights from the first few years. For what it's worth, I think the best ideas are found there, often in the first year (I had a lot "stored up" before I started blogging) and most definitely in the best posts from the first 15 years and 1.5 million pageviews.

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Wednesday, December 25, 2024

HCTRA Part 2: spiraling debt and outrageous costs

Another excellent followup investigative guest post by Houston Freeways author Oscar Slotboom. Be warned: this will make you nauseous if you like good government.
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In my previous post, "HCTRA: from model agency to delay, divert and do nearly nothing", I documented how HCTRA has hugely increased diversions of toll revenue and drastically curtailed construction. To summarize
  • HCTRA had $935 million in revenue in 2023, and $410 million in profit.
  • $369.3 million was diverted out of HCTRA in 2023. Diversions have averaged $345 million per year in the years 2020-2023. Harris County diverted $1.292 billion of toll funds out of HCTRA in the last 4 years, which is around $830 million above historical levels.
  • For the period 2020 to 2023, diversions were 46.3% of toll revenue and 45.3% of total revenue. It appears this trend will continue for 2024 and 2025 based on budget documents (page 81), although the percentage may be in the mid-thirties since there were one-time transfers in the 2020-2023 period.
  • HCTRA awarded approximately $1.648 billion in construction contracts in the six years prior to 2019, but only two projects for around $297 million in the six years after 2019. Long-planned projects like the Hardy downtown connector, toll barrier removal and the SH 225/Sam Houston interchange have been delayed for years.
The Loophole
Are these large diversions legal? Apparently yes, using a loophole in Section 284.0031 of the Texas Transportation Code which states "The commissioners court of a county or a local government corporation ... may authorize the use or pledge of surplus revenue to pay or finance the costs of a project for the study, design, construction, maintenance, repair, or operation of roads, streets, highways, or other related facilities." It appears the phrase "other related facilities" is used to justify diversions to anything remotely related to a road, and the term "maintenance" may allow toll revenue to go into maintenance budgets for marginally related facilities. Of course, money that would normally fund precincts, non-HCTRA engineering or general administration can be shifted to other "focused objectives" (starting on page 52), nearly all of which have nothing to do with infrastructure.
HCTRA's financial statement for fiscal year 2024 (ended September 30) will be available in April. The Harris County 2024 budget indicates at least $300.5 million in transfers. For the current fiscal year, the Harris County budget (excerpt below) indicates at least $305 million in transfers, but we won't know the official audited amount until April 2026.
$950 million in new debt in 2024, and another $2.15 billion on the way
With toll revenue being diverted out of the agency, there's no money to pay for planned projects. The result: a huge increase in debt is in progress.
The 2023 HCTRA financial statement shows $1.999 billion in debt principal and $111.9 million in commercial paper principal outstanding for a total of $2.1 billion. In the near future, we can expect debt to rise to around $5.2 billion, a 148% increase.
HCTRA issued $950 million debt in June 2024, the first of what is expected to be multiple debt issues.
This May 2024 credit opinion document from Moody's Ratings has more information about the HCTRA debt issuance program. Some key points are excerpted below.
"HCTRA expects to fund the remaining $3.5 billion of its five-year capital plan with existing capital funds, commercial paper and proceeds from past and future toll road revenue bonds. HCTRA projects that $3.1 billion of the remaining $3.5 billion will be funded by new debt issuance. We anticipate issuance between $800 million and $1 billion of annual debt issuance over the next few years."
HCTRA has expressed an intent to issue $3.1 billion in new debt. $950 million this year is only the start. This means that HCTRA's debt principal will skyrocket to around $5.2 billion within a few years.
If the huge toll revenue diversions were not occurring, HCTRA would have around $215 million per year available to dedicate to the capital program, which would greatly lower the debt needed to complete the investment program.
"Some of the other major projects planned are removal all tolling barriers, the largest project with expected construction costs of $1.6 billion. There is also a related $238 million project for toll system enhancements."
Say what?!?! $1.838 billion for removing toll barriers and toll system enhancements? Yes, it's true, if you look at this HCTRA document (page 5) you'll see "Barrier Free HCTRA" listed at $1.61 billion, which is more than the way-over-budget ship channel bridge ($1.45 billion).
Good grief, this is outrageous! At least half the toll road system is already barrier-free, and only sections built before 2000 have barriers. Since this work will mainly apply to the original three sections of the Sam Houston Tollway (Southwest Freeway to North Freeway) which have paid for themselves many times over, this certainly smells like paying tolls to pay for the collection of tolls.
HCTRA needs to provide a detailed listing of the costs in this program. Is this project a trojan horse to disguise bloated administrative costs? Who knows, but a detailed listing of estimated costs of all elements in the project would shed some light on this appalling cost. (Attention Houston Chronicle!)
"HCTRA in September 2023 updated the toll rate policy to again increase rates at the greater of CPI and 2.0%"
"... we expect that HCTRA will have sufficient revenue growth through transaction growth, resumed annual toll rate increases, and fee revenue to maintain strong credit metrics in line with Aa2 rated peers."
"Factors that could lead to a downgrade: Failure to adhere to new toll escalation policy without reductions in the capital plan"
Moody's expects that toll rate increases will be needed to maintain HCTRA's credit rating, and HCTRA appears to have a policy in place to start increasing tolls.
"HCTRA faces risk from organization structure given the increase in transfers to the county for non-toll road projects. The toll road operates as a division of Harris County. Its operating board is comprised of members of the county commissioners court, all five of whom are elected officials."
"The elected county commissioners court directly oversee the authority, reducing the level of independence of rate setting versus peers."
Yup, we know the transfers are siphoning off a large percentage of revenue. Actually, I'm surprised Moody's isn't more concerned about it, but there is some discussion on page 4.
It appears that HCTRA is governed solely by Commissioners Court, with no independent oversight. Of course, the political minority (Republican Jack Ramsey) has no influence in the matter, and the majority does what it wants, and it could be a case of one or two individuals steering these decisions. In sharp contrast, the North Texas Turnpike Authority has 9 directors, with 8 appointed by four different counties and one by the governor. This prevents one or two people from having too much power.
Overall, Moody's says HCTRA can most likely withstand the massive debt increase, mainly due to the strong financial position inherited when Democrats took control of Commissioners Court in 2019, and with expected toll increases.
We don't get much for $3.5 billion
So what do we get for $3.5 billion in capital spending, including $3.1 billion in new debt? Not nearly as much as I would think or hope. For example, this spreadsheet shows total construction payments of $1.45 billion from 2001 to 2022, including construction of the Westpark Tollway, Tomball Tollway, Sam Houston Northeast, Sam Houston tollway widenings, Fort Bend Parkway and extensive miscellaneous work. Now it costs $3.5 billion for a smaller number of long-planned projects that have been delayed for years and years. Sure, there's been inflation, but the new capital projects program seems like poor bang for the buck.
Using cost numbers here and here and an estimate, I come up with Ship Channel Bridge $726 million for remaining work, Hardy Downtown connector $226 million for remaining work, Hardy-Sam Houston connectors $310 million, Sam Houston-SH 225 connectors phases 1 and 2 estimated $350 million and the Lynchburg ferry $15 million. That adds up to $1.627 billion. This is just about the same as the barrier-free program at $1.61 billion. The total is $3.24 billion.
Commercial Paper Shenanigans?
Looking at HCTRA's 2023 financial report page 33, there is a discussion of the issuance of commercial paper, which is short-term financing as opposed to long-term bonds. Issue K authorized $200 million in May 2022, and issue K-2 authorized $150 million in May 2023.
HCTRA diverted $799 million out of HCTRA in 2020 and 2021. Then HCTRA issued $350 million in commercial paper in 2022 and 2023. It looks like so much money was diverted that HCTRA was short of money, so it had to tap credit markets to pay bills. In other words, the bank account was empty.
For both credit issues, HCTRA paid a 10% interest rate for 270 days, amounting to $25.89 million. Why did HCTRA need to pay 10% interest? Is this sound financial management - running the bank account dry and then taking out $350 million in loans with 10% interest for a period of time? The interest on the commercial paper after the 270 days is not stated, but the payment schedule shown on page 34, using estimated dates and the Excel XIRR function, suggests a rate of 5.88%.
The 2023 financial statement says remaining principal was $111.93 million, but the Harris County 2025 budget (page 90) shows huge adopted amounts for payments in 2024 and 2025 on Series K and K-2, including $320.3 million budgeted for 2025 (see budget excerpt below). Looking at the commercial paper reports, I can't make any sense of the numbers. Perhaps we'll get some clarity in the next HCTRA financial statement.
Wayne Dolcefino investigates HCTRA
HCTRA services contracts are another world which I haven't even attempted to dissect. Services and fees were $213.4 million in 2023.
Investigative reporter Wayne Dolcefino has investigated HCTRA's service contracts and recently posted a video with results of his investigation. Dolcefino reports that certain contracts have been transferred to firms with politically well-connected ownership, and the cost to HCTRA has gone up substantially after the work was transferred.
 

Tolls go on Forever, no matter how much HCTRA customers pay
The Chronicle recently reported that tolls will continue forever, regardless of how much customers have paid on particular sections, even on sections which have paid for themselves many times over, such as the original three sections of the Sam Houston tollway, completed in 1988 to 1990.
The 2023 HCTRA financial statement states, "When all of the debt service has been paid or provided for in a trust fund, the Toll Roads will become a part of the State of Texas Highway System." What will HCTRA do to continue charging tolls forever? Continue to divert toll revenue, and issue more bonds to ensure the agency is perpetually in debt.
HCTRA's Game, post 2019
So now we get a clearer picture of HCTRA's modus operandi since Democrats took control of Harris County Commissioners Court in 2019.
  1. Divert a high percentage of toll revenue out of the agency for use elsewhere, 46% in recent years and probably in the mid thirties percent going forward. (2020-2023 included large one-time transfers.)
  2. This money gets distributed to the commissioners, the county engineering department (not HCTRA engineering) and general administration. Once in the budgets of those departments, it appears to be used at their discretion for anything they can justify as "related uses" to roads.
  3. With toll revenue being siphoned off, planned and committed projects are delayed for years, and the price escalates.
  4. With available money running short due to diversions, issue billions in bonds to pay for the cost of planned projects and also higher-interest short-term commercial paper to pay bills.
  5. According to the Moody's report, toll rate increases are expected in the future, imposing a higher cost burden on businesses and individuals in Harris County and extending tolling farther in the future (2054 for now, but future bonds will extend it).
Sad but true, HCTRA has degenerated into a Chicago-style, debt-driven machine rife with inefficient project delivery, high costs, cronyism and increasing debt. Customers of the toll road system will pay for this, making the Houston area a more expensive place to travel and conduct business.
Can this be fixed?
Since HCTRA operates at the direction of Commissioners Court, and Commissioners Court has created this situation, the only potential remedy is state-level legislation, which has been done before in 2021 with SB 1727.
Some possible legislative remedies could include
  • Eliminating the loophole in the transportation code, and require all toll surplus funds to be used directly on the toll road system or to pay off debt.
  • Limiting the amount of toll revenue which can be diverted out of HCTRA, for example to 15% of toll revenue annually.
  • A state takeover of HCTRA to stop all diversions and implement policies for efficient and timely project delivery, and customer-friendly policies to reduce and eventually eliminate tolls.
Dear Santa: all I want for Christmas 2025 is for TxDOT to take over the Harris County Toll Road System!

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Sunday, November 24, 2024

HCTRA: from model agency to delay, divert and do nearly nothing

This week we have one of Oscar Slotboom's best guest posts to date, although sadly with bad news about the state of HCTRA, which used to be one of the crown jewels of Harris County. If you know anybody in the Texas Legislature (including your rep), please pass it along. Thank you.
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Once upon a time, the Harris County Toll Road Authority was a model agency that regularly delivered projects quickly and efficiently at a low cost. This efficient and financially conservative approach put HCTRA in a very strong financial position.
Democrats took majority control of Harris County commissioners court in 2019. Since then, HCTRA has degenerated into an agency which gets very little done and takes forever to move forward with any project, in spite of collecting huge revenues from the public.
Reduction in new contracts since Democrat control
HCTRA has awarded only two new major construction contracts since 2019, with a nearly five-year hiatus between awards, and only one project which was planned and prepared after 2019. (reference 1, 2)
The list below shows contract awards in the six years before Democrat control and six years after, keeping in mind that the 2019 project on the Tomball Tollway was already poised to proceed.
Contract(s) Awarded Project
August 2024 Sam Houston Tollway at SH 225, 5 connection ramps, $205 million
December 2019 Tomball Tollway (SH 249) at Grand Parkway, 4 connection ramps, $92 million
2017 Sam Houston Tollway widening, I-45(S) to SH 225: $199 million
2017 Sam Houston Tollway Ship channel bridge : $934 million (original contract amount)
2016-2017 Hardy Toll Road downtown connector, Lorraine and Collingsworth: $47 million
2015-2016 Sam Houston Tollway widening, SH 288 to I-45(S): $185 million
2014-2015 Hardy Toll Road widening, FM 1960 to Grand Parkway: $84 million
2013-2016 Tomball Tollway main lanes, Spring Cypress to county line: $200 million
Ship Channel Bridge
The project contract was awarded in April and June 2017. It has been delayed for years and sustained a major cost increase, around $487 million. This 2023 HCTRA document lists the current cost at $1.449 billion, up from the original reported cost of $962 million.
The 2018 failure of a bridge designed by the same engineering firm, Figg Bridge Group, prompted an independent design review. Based on the design review findings, HCTRA made major changes to the design, including replacing structural concrete bridge sections with steel structures.
Figg also designed TxDOT's new Corpus Christi harbor bridge, which is longer and taller than the ship channel bridge. TxDOT paused construction for an independent design review which resulted in findings and recommended adjustments, but a major redesign was not required and the concrete structural design was retained.
Of course this problem occurred before 2019 and was inherited by the post-2019 management. But was the costly major redesign really necessary? HCTRA can justify it based on the independent consultant report, but a major redesign was not needed for the longer and taller Corpus bridge.
Delayed Projects
Toll plaza modernization
HCTRA has plans to replace the outdated toll plazas along the original three sections of the Sam Houston Tollway, from the Southwest Freeway to the North Freeway. This project was listed as costing $494 million in this 2022 document, but the current cost of this project is unclear.
This project is surely a sore point to customers on these three sections of the tollway. This segment consistently generates over $300 million per year in revenue ($336 million in 2023) and has paid for itself many times over since all sections were completed in 1990, but HCTRA wants to spend hundreds of millions to continue to collect tolls. It certainly smells like paying tolls to pay for the collection of tolls.
An eye-opening investigative report on Click2Houston.com in February 2024 was not able to get answers from HCTRA about this project, stating "that the total price tag remains uncertain as HCTRA was unable to provide us with numbers". The report concludes that this relatively simple project would require "a total of nearly 8 years to reconfigure and reopen the publicly funded toll lanes along the Beltway" at the plazas. The video states "The now four-year delay in reengineering of the tolls is attributed to the pace Harris County government operates these days."
Hardy Toll Road Downtown Connector
Preliminary work on this project has been ongoing for a very long time, starting with work to relocate a railroad track in June 2003. Contracts for completed projects at Collingsworth and Lorraine were awarded in 2016 and 2017, and the project appeared ready to proceed to construction in 2018.
When Democrats took control of Commissioners Court in 2019, it became clear that the majority did not want to this project to proceed, in particular Judge Lina Hidalgo, and the project was suspended in May 2020. But there were longstanding agreements between HCTRA, the City of Houston and TxDOT to build the project, and TxDOT funded the $36.5 million replacement of the Elysian Viaduct, which connects to the project.
So HCTRA went into the delay mode. It hired a consultant to conduct a reevaluation process, community meetings and "visioning" in 2022. This visioning process resulted in recommendations to make the entire length an elevated structure or a cut-and-cover tunnel (1 2 3), with a 0.83-mile-long tunnel from north of Lorraine to south of Collingsworth. No cost estimates were provided, but the vision design would drastically increase the cost, probably by hundreds of millions of dollars.
Parks on a deck ("cap" in TxDOT parlance) above a freeway are trendy these days, but this is the most absurd proposal for a cap park I've ever seen. The purpose of cap parks is to connect neighborhoods which were severed by past freeway construction, or create park space where land is not available. Neither condition exists along the downtown connector. The connector is alongside a long established and heavily trafficked multi-track railroad corridor. The deck park will be alongside or near the railroad, not connecting any neighborhoods. It would, however, provide good views of warehouses, scrap yards and freight terminals on the east of the the railroad. Google aerial view shows there is plenty of vacant land in the area, and it's difficult to justify a massive expenditure for a strip of park land around 80 feet wide.
So is this super-expensive redesign a poison pill intended to indefinitely delay construction by increasing the cost? Maybe. Since the majority on Commissioners Court appears to be against improvement and expansion of the toll road system, it could also be a way to burn up money which otherwise could be going to highway and street improvements.
Interchange at the Sam Houston Tollway and SH 225
This project is the low hanging fruit among the planned projects, since it has negligible negative impact and would directly benefit motorists connecting to and from the Sam Houston Tollway and SH 225. This project has been delayed for years, but HCTRA was obligated to proceed because it is part of a 2018 agreement between HCTRA and TxDOT. The $205.4 million contract for five connectors was awarded in August, and this is the first HCTRA contract for a major project planned and prepared after 2019.
Interchange at the Hardy Toll Road and Beltway 8
The project has been delayed for years and the HCTRA site now says "Construction is expected to begin in 2026."
HCTRA's Guiding Principles since 2019: Delay and Divert
HCTRA revenue has fully recovered from the impact of Covid, with revenue at a record $935 million in fiscal year 2023, including $896 million in toll revenue. (However, inflation-adjusted revenue was higher in 2015, 2016, 2018 and 2019, see chart).
Every planned project is being delayed year after year, and of course costs have escalated rapidly during this period, with the highway cost index up 65% since October 2021. Delay may be the intent of the majority on Harris County Commissioners court, since they appear to be against making improvements to the toll road system.
Instead, Harris County Commissioners Court has drastically increased diversions of surplus revenue out of HCTRA, which is called "transfers out" in financial reports. Diversions include a longstanding amount for general mobilty, and additional transfers are mainly or entirely to flood control budgets, but of course budgeting is like a shell game, where money that normally could have gone to flood control can be redirected to other purposes. In the four years from 2020 to 2023, Harris County diverted $1.29 billion out of HCTRA ($1.45 billion in 2024 dollars), which is about $824 million above the long-established transfer rate. HCTRA toll revenue has become a slush fund for Harris County Commisioners Court.
Have Legislators in Austin Noticed?
The Texas Legislature authorized HCTRA with legislation in 1983 (SB 970). HCTRA in 2024 collects massive revenue from the public, diverts toll revenues to general government and gets very little done in terms of construction. Is this what the Texas legislature intended? I don't think so.
Toll roads have become a hot political issue around the state in recent years due to sky-high tolls, excessively punitive penalties and general arrogance of toll road agencies. In May the Dallas Morning News did a comprehensive report of the discontent called Toll Trap (overview, part 1), and an accompanying DMN editorial stated the following in a commentary called "Texas made the wrong decision on toll roads".
The state of Texas has abdicated its responsibility to provide necessary transportation infrastructure in exchange for a vast web of toll roads controlled by a patchwork of powerful, self-interested organizations that often act to the detriment of residents.
That’s our conclusion after reading a yearlong investigation conducted by our newsroom into how Texas built more toll roads than nearly all other states combined over the last two decades, and the alarming consequences for the public.
A subsequent report hinted at the possibility of toll road reform in the 2025 session: "As lawmakers have grappled with how to ease toll expenses on motorists, some say the time is ripe for them to reform Texas’ complex tollway system"
My Preference
The state Legislature gives, and it can also take away. My preference is for the State of Texas to disband HCTRA due to its mismanagement and ineptitude, and take control of toll road system, including assuming its debt. Under state control via TxDOT, diversions of toll revenue to Harris County would stop. Then the system should be managed to be customer-friendly by reducing and eliminating tolls. TxDOT should cancel plans to spend hundreds of millions of dollars to modernize toll collection on older parts of the system which have long paid for themselves. Instead, tolls on the original sections of the Sam Houston Tollway, from the Southwest Freeway to North Freeway, should be entirely eliminated. Surplus toll revenue should go to local projects, including projects currently being planned by HCTRA.
This may be wishful thinking. But it appears that Harris County is attempting to repair its soiled reputation in Austin, possibly to preempt any legislative action. At the November meeting of the Texas Transportation Commission, Harris County Commissioners Tom Ramsey and Leslie Briones spoke to the commission in support of a new era of partnership between TxDOT and HCTRA. HCTRA Executive Director Robert Trevino, whose salary was recently increased to $485,000, was also in attendance. (video, "open comment period" starting at 34:15)
All the the long-planned projects remain on HCTRA's to-do list, and this October 2024 document has schedules for contracts. HCTRA also launched two studies, the Westpark Tollway Capacity Optimization Study and the Harris County Truck Route Study & Freight Corridors Plan. Will HCTRA actually be able to get these jobs done, or just continue its policies of study and delay?
Let's hope something happens to improve HCTRA's performance - either legislative action or mandates from Commissioners Court to get things done. Ideally, we can bring back the pre-2019 HCTRA that got the jobs done quickly and efficiently.

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Friday, November 15, 2024

Redeveloping the old Days Inn downtown, METRO needs to learn from Denver's failures, Texas' boom, and more

A few smaller items this week...

Finally, hat tip to Hugh for sending out this video of Why Florida and Texas are booming (and NY and California are not) by Economist Joseph Politano.

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Wednesday, October 16, 2024

A simple solution to help Houston traffic, our tax-debt-spend problem, HSR bankrupted Japan, Austin builds towards affordability, METRO comedy!

Just a few small items this week:

"I worried from afar that my hometown would meet the same fate as San Francisco, the poster child of the housing shortage and all its associated woes. I feared that Austin would become known as a playground for the rich, a city where displacement and mind-boggling home prices marred the natural beauty that once made it such a draw. In my hand-wringing, though, I'd overlooked one crucial detail: Texas is better at building homes than almost anywhere else in the country.”

There are differences between Austin (and Texas) and San Francisco that, if not changed will continue to make it possible to build in Austin (and Texas) and nearly impossible in San Francisco (and California). Unincorporated county territory in Texas is unzoned. That means that, barring environmental difficulties, developers and builders can build. By contrast, in the San Francisco metro, and virtually all of California, draconian state and local regulations make it very difficult to build on greenfield sites, where land prices would be much lower if the market were permitted to operate."

  • Caught my eye from Y-Combinator Demo day: XTraffic 

What it does: Reduces congestion and accidents with smart traffic lights

Why it’s a fave: Controlling traffic lights with AI sounds like the perfect application of this technology. XTraffic says that it’s already doing it in several cities in Texas. I hope they make it to my town in California, too, because I sure am tired of waiting for the light to turn green when there are no other cars around.

Please get this Houston!! 

Finally, ending on a lighter note, maybe the first ever METRO Houston joke by a professional comedian?... 😅 (hat tip to Jay)

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