Exxon Headquarters Near Houston To Get New Road Despite State Budget Shortfalls
Texas faces a transportation funding gap of $315 billion over the next 20 years, according to the state's transportation commission. Ten of its top 20 congested roads are in or around Houston.
Yet while the mitigation plans for congestion around several of those existing roads remain unfunded, the state is moving ahead with the construction of more than 180 miles of beltway called the Grand Parkway, segments of which will run right past the new North American headquarters of ExxonMobil. The total price tag for the project, which will require the use of eminent domain, is estimated at $5.2 billion.
Since the 1960s, planners in Houston have dreamed of building the Parkway, a massive third beltway in the suburbs and exurbs beyond the Sam Houston Tollway, which itself rings the 610 Loop near the city's core. Coming up with the money for the road, however, has never been easy. For decades the grand plan has languished; so far only two out of its 11 segments have been built.
But in January the Texas Transportation Commission, appointed by Governor Rick Perry, decided to assume authority for several segments of the project.
One commissioner said the project was particularly important for the Texas Department of Transportation, commonly called TxDOT, because ExxonMobil was considering moving its North American headquarters to a brand new, 385-acre corporate campus north of the city near where the road will some day go. Suburban Harris County, which surrounds Houston and where the campus is located, had struggled to find a way to pay for its parts of the Parkway.
In January, ExxonMobil's final decision about that campus had yet to be publicly revealed. Civic boosters seemed to suggest that without progress on the Grand Parkway, the company might leave the region.
"Exxon representatives have stated very clearly to me that TxDOT moving forward on the Grand Parkway is essential, and that if that did not happen, they would not select this site," transportation commissioner and Houston real estate developer Ned Holmes said. He added that it was "kind of a deal-breaker" for the company.
The commission's vote in support of the project was unanimous, and if all goes as planned, the segments of the road adjoining ExxonMobil will go online just as the company's new campus, which sits about 10 miles up the road from its old campus, is completed in 2015.
David Crossley, the president of Houston Tomorrow, which studies urban issues in the region, said that "six months ago the Parkway project was essentially dead. But when Exxon began to close in on their decision, everything started going really fast. It's breathtaking how they got this going again."
Critics say that the Transportation Commission's decision to move the project along raises questions as to whether the state's road policy is too influenced by the concerns of developers, private toll-road operators and politically connected companies like ExxonMobil.
A spokesman for the oil and gas company, noting that "ExxonMobil speaks for itself," declined to comment on Holmes' remarks. "We don't comment on meetings with government officials," he said.
Raquelle Lewis, a public information officer for TxDOT's Houston District, said that while "it certainly does not hurt to have a corporation like Exxon that is in support of us moving forward," the Grand Parkway "is an initiative that's been on the priority list for the Greater Houston region for a very long time."
Lewis said ExxonMobil had been in contact with the Grand Parkway Association, a state-authorized non-profit that facilitates the development of the beltway.
"I have no doubt that those communications were a part of the discussions and the decision-making that happened within state government," she said. "They're a huge corporate entity with a huge impact on anywhere they decide to headquarter."
TxDOT says that building the northern segments of the Grand Parkway now is necessary to prepare the city for the congestion that will inevitably come later as the region continues to grow, whether or not ExxonMobil moves to the area.
Transportation advocates, however, suggest that the road is more important to developers than to the city's often-frustrated motorists. Some believe real estate developers may have been more influential than ExxonMobil in securing the project's approval.
Finishing the Parkway would generate boundless real estate opportunities on the outskirts of the sprawling, smoggy city, which famously has few zoning laws and many developers. A developer is already clearing ground on one project, an 1,800-acre mixed-use village that claims it will be built on "sustainable development principles," immediately adjacent to where ExxonMobil's campus will go.
If the state has free money to spend on a project, Robin Holzer of the Citizen's Transportation Coalition argued, it should spend it "to benefit existing taxpayers, instead of blowing it on a speculative toll road out in the boonies for the benefit of one of the world's most profitable oil and gas companies."
Critics of the project are further upset that parts of the Grand Parkway, including those near the future headquarters of ExxonMobil, may very well be built as toll roads under the auspices of public-private partnerships.
Next Tuesday the state will break ground for Segment E of the Grand Parkway, a publicly funded stretch of road to the west of the city that will cost $350 million. The state may sell ownership stakes in Segment E to help finance parts of the road that are slated to be turned over to public-private partnerships.
Such public-private partnerships were hugely controversial earlier in Governor Rick Perry's tenure, when he proposed a system of "supercorridors" to be called the Trans-Texas Corridor. After a massive grassroots outcry, Perry abandoned that idea.
Despite that misstep, however, Texas is turning back to public-private toll roads. In June, Perry signed a transportation bill authorizing TxDOT to build the Grand Parkway and a bevy of other projects as public-private partnerships. The state has yet to make a decision on whether to do that for the northern segments of the Grand Parkway.
Terri Hall, a conservative critic of Perry's road-building policies who serves as the executive director of Texans Uniting for Reform and Freedom, said, "What is so insidious about this is that we are now putting in the hands of private companies the power to tax."
She worries ordinary Texans would not be able to access the road if it is run by a private company.
"Maybe they pay their employees well enough that they can take the toll road to work," Hall said of ExxonMobil, but "we're basically creating a two-tiered highway system: one for the haves, one for the have-nots."
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First Posted: 09/08/11 02:26 PM ET Updated: 11/08/11 05:12 AM ET