A collection of communities on metro Denver’s eastern flank has been offered more than $4 billion for road improvements as part of a bid by a foreign company to take over operation of E-470 for the next half-century.

“It’s a very tempting proposition — we’re all strapped and we all need money for roads,” said Aurora Councilwoman Françoise Bergan, a member of the E-470 Public Highway Authority board of directors “But you have to do it the right way.”

So far, the offer from ROADIS, a multinational toll road operator owned by a Canadian pension fund, to take charge of the highway that runs through Thornton, Brighton, Commerce City, Aurora and Parker — as well as the three counties — has run into resistance from public officials who feel the 47-mile highway is doing just fine as it is.

In August, the E-470 board voted against accepting unsolicited proposals to operate the tollway that makes up the eastern half of metro Denver’s beltway, after first being approached by ROADIS in the spring.

“E-470 is run very well and it’s financially sound,” said outgoing Thornton Mayor Heidi Williams, who’s been a member of the E-470 board for the past six years. “Which is why people want to buy it.”

Or more precisely, they want to manage it — through a joint operating agreement worth a total of $9 billion that would put ROADIS in charge of the tollway and give it the right to collect the tolls on E-470 for the next 50 years — a pot of cash that could easily top $30 billion.

E-470, which was completed in 2003, is a product of Colorado’s public highway authority law, passed more than 30 years ago. The road receives no taxpayer monies for construction or maintenance — it survives on toll revenue.

Last year, E-470 pulled in $233 million off of 87 million vehicles.

ROADIS is proposing to retire all of E-470’s debt, which amounts to nearly $2 billion when future interest payments are included, and speed up planned capital improvement projects in the corridor. The company is also offering to launch a rewards program that would lower tolls for frequent highway users.

Despite the August vote on unsolicited offers, ROADIS is still leaning on E-470 stakeholders to give the offer another hearing. Company officials met with the Aurora City Council in October.

Douglas County Commissioner Roger Partridge, who represents the county on the E-470 board, said he has concerns about private-sector involvement “with underlying profit structure and increasing tolls for the future.”

“The ROADIS offer is like a reverse mortgage,” Partridge said. “E-470 communities get a one-time upfront payment but lose the long-term economic benefit and control of the roadway. … The money generated by E-470 should stay right here in Colorado, to the benefit of local communities, not to serve the profit objectives of a private foreign (entity).”

“Devil is in the details”

ROADIS disputes such a characterization of its proposed involvement with E-470. Michael Cheroutes, who heads up the ROADIS effort locally as president of ROADIS – USA, wouldn’t go on the record for this story but did send a fact sheet to The Denver Post explaining the company’s pitch.

ROADIS isn’t trying to buy the highway nor is it trying to nudge out the eight local governments that currently oversee E-470, the company says.

“E-470 is not being sold, the authority is not losing control, and the agreement is not a so-called P3 (public-private partnership),” the fact sheet states. “The current management team and staff would all remain and still be in charge of operating and maintaining the road.”

The company would freeze tolls in the first year, and then only increase them to account for inflation after that.

“ROADIS believes it can use its experience and technological expertise to enhance the operation of E-470, to provide a long-term strategic investment, and to bring immediate and substantial economic benefit to the region,” the company says.

But such an arrangement doesn’t come without risk. In 2014, the foreign-owned private operator of the 157-mile Indiana Toll Road declared bankruptcy on more than $6 billion in debt. Less than two years later, the private operator of a Texas toll road filed for bankruptcy protection after traffic revenues didn’t live up to projections.

Colorado itself has hammered out controversial private operator arrangements for roads in recent years. Crowds packed public meetings in 2014 when a foreign-owned consortium signed a contract with the Colorado Department of Transportation to operate and maintain U.S. 36 between Denver and Boulder.

That same year, Portugal’s Brisa Auto-Estradas SA had to explore debt restructuring options for the Northwest Parkway in Broomfield and Lafayette, which it operates under a 99-year contract.

“The devil is in the details in these deals,” said Jonathan Peters, a business school professor of finance and data with the College of Staten Island in New York. “The firm showing up is not showing up to help the public — they’re in it to make money.”

A 2016 study of Texas highway concession agreements from the Texas A&M Transportation Institute said while the risks are real in handing over control of a public asset like a highway to a private entity, there are sound reasons for such arrangements.

“Primarily, the advantages are thought to include access to additional funding options, cost and time savings compared to traditional project implementation, and more efficient lifecycle costs,” it reads.

But Tim Stewart, E-470’s executive director, said his tollway is being managed well under Colorado’s public highway authority statute. In September, Fitch Ratings upgraded E-470’s senior revenue bonds from BBB+ to an A rating, citing “E-470’s continued strong traffic and revenue performance” for the ratings boost.

“I don’t think there are substantial efficiencies over what we are already doing,” Stewart said.

E-470 has reported steady increases in both traffic counts and toll revenues over the past decade, as growth on metro Denver’s eastern flank continues unabated. In 2010, the authority collected $94 million in tolls on 51 million vehicles — next year, toll revenues are expected to eclipse the $250 million mark for the first time.

Tough prospects for agreement

That has led some to complain that the tollway is too expensive.

It costs a motorist in a two-axle vehicle $14.25 to drive the full 47 miles of E-470 from Interstate 25 in Lone Tree to I-25 in Thornton with an ExpressToll account — and $22.55 without one. Truckers riding on five axles without an ExpressToll sticker pay $90.20 to travel the full length of the highway.

It’s not clear ROADIS could provide much relief to motorists without risking missing its financial targets. In its fact sheet, the company states that “tolls will be frozen, except for cost of living adjustments.”

But whether a ROADIS/E-470 tie-up ever happens is very much in question.

ROADIS’ Cheroutes, who used to work at the Colorado Department of Transportation as the founding director of the agency’s High Performance Transportation Enterprise, has been meeting with city councils and county commissioners in the corridor this fall to once again pitch his plan.

Depending on next week’s election results, there will likely be some shuffling on the tollway authority’s board. But Williams, Thornton’s mayor, said it would take a unanimous decision of the board to approve a concession agreement with anyone.

She doesn’t see that happening any time soon.