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Friday, October 17, 2014

Ind. Gov't. - "LaPorte County hires attorney to study Toll Road contract"

Stan Maddux reports today in the South Bend Tribune in an interesting story that begins:

LaPorte County has taken steps aimed at encouraging the state to attempt to take back operations of the Indiana Toll Road or, if it remains under a lease, to provide revenue sharing to counties along the entire stretch of the highway.

The county commissioners on Wednesday hired a law firm specializing in bankruptcy proceedings to investigate if the language in the 75-year lease can be executed for allowing the state to regain daily operations of the Toll Road, which was leased in 2006 to a private operator now in bankruptcy court.

If the operations do not revert back to the state, the attorney will push for revenue sharing for LaPorte and all other counties adjacent to the highway from whatever company assumes the lease or a restructured lease in the future.

LaPorte County attorney Shaw Friedman said the preference of the commissioners is for the state to reassume operations of a highway he called a ''cash cow.'' Friedman said the state would have to ''buy back'' control of the Toll Road for about $2.4 billion to help retire whatever debt the private operator, ITR Concession Co., is responsible for after its bankruptcy proceedings. Its current debt is listed at $6 billion.

Friedman said the state can float a bond issue to finance the ''buyback.''

And, even with such a debt, figures obtained from the Toll Road show annual profits of about $80 million annually from the highway that could be applied toward the debt payments and local infrastructure, Friedman said.

Goldstein & McClintock, of Chicago, will intervene in the bankruptcy proceedings on the county's behalf.

Here is the most interesting part to the ILB, with emphasis added:
Friedman said Mitch Daniels, when he was governor, and others claimed the Toll Road under the 2006 lease would revert back to the state if the vendor declared bankruptcy. Whether that can happen is in dispute with some officials, including those with the Toll Road oversight board, who claim bankruptcy alone is not grounds for ITR Concession to have to relinquish control back to the state.

The Tribune reported Oct. 12 that a Daniels spokesperson directed a reporter to an opinion piece by urban affairs analyst Aaron Renn, who wrote on Urbanophile.com that "Daniels did once say that the state would take responsibility for the road back if the vendor declared bankruptcy. He clearly misspoke on that."

The story doesn't provide a direct link to the Urbanophile post, but here it is, from Sept. 21, 2014. It is headed "Indiana Toll Road Lease Vindicated As Win For Hoosiers As Private Operator Goes Bankrupt."

Posted by Marcia Oddi on October 17, 2014 09:29 AM
Posted to Indiana Government