Texas
Texas Is Taking Back the State Highway 288 Tollway—at a Steep Price
The Texas Department of Transportation (TxDOT) is set to take back ownership of the State Highway 288 tollway, one of the state’s most expensive privately built toll roads, which connects Houston to its southern suburbs. This action will terminate a 52-year agreement, originally set to end in 2068, for the Blueridge Transportation Group (BTG) to build and operate the tollway—a 10-mile stretch running from an intersection just south of downtown Houston to the Brazoria/Harris County line—that was built in the median of the publicly owned State Highway 288.
The buyback comes with a hefty price tag.
BTG, a consortium of international private infrastructure development firms, paid up-front for about a third of the billion-dollar tollway construction project, with the remaining two-thirds coming primarily through federal and state-backed debt. TxDOT is exercising a right to retake the tollway enshrined in the original agreement, but doing so requires paying BTG some $1.7 billion—on top of what the firms already raked in through tolls, construction contracts and selling shares in the project. The money from TxDOT will more than cover the $650 million debt that BTG still owes.
But Texas taxpayers and drivers will be left holding the bag, paying off the tollway for many years to come. In May, TxDOT formed the Texas Transportation Finance Corporation in order to take out a loan of $1.7 billion from TxDOT to acquire the tollway—with the plan of paying back the debt with future toll revenues.
The 288 toll road has long been controversial—in no small part because of its high cost both in terms of fees and human lives. Since the tollway opened in November 2020, toll rates have increased by sixty percent, going from $11 for the full 20-mile round trip during peak hours to $29 dollars now.
“We’re trying to get in a position where we can control that and have more reasonable rates.”
Last November, the Texas Observer revealed how the state allowed BTG to profit from the 288 tollway at the expense of both drivers forced to pay exorbitant rates and construction workers who were injured, or died building the tollway. Twenty-one-year-old Juan Simental fell 85 feet to his death in June 2019 after his employers failed to provide the appropriate safety lanyard. Dozens of other workers experienced severe injuries, reporting that there was no one monitoring safety conditions, no flagger or spotter, and no safety training.
TxDOT rejected BTG’s offer to renegotiate the contract. In an August press release, Lieutenant Governor Dan Patrick said, “We will provide meaningful relief for Texas drivers along this corridor. Securing a more than $4 billion asset for just $1.7 billion will not only benefit Texas drivers, it will also enable TxDOT to continue investing in and advancing crucial roadway projects across the state.” Patrick did not respond to requests for an interview for this story.
Texas Transportation Commission Chairman Bruce Bugg Jr. called the buyback “a big win for taxpayers,” stating in the press release that the buyback would allow the agency to cut rates by half “as soon as possible” and add more free lanes. SH 288, also known as the South Freeway, is a major hurricane evacuation route, and some exits serve the Museum District and the Texas Medical Center.
TxDOT inked its original agreement in 2016 with BTG, which consisted at the time of six equity members including ACS Group (based in Spain), Shikun & Binui (Israel), and InfraRed Capital Partners (Britain). Last year, ACS Group acquired BTG in its entirety.
In response to the Observer’s request for comment, BTG spokesperson Alan Goss said, “We are deeply disappointed by TxDOT’s decision to expedite the purchase of the SH-288 toll road without fully considering the significant concessions we offered for motorists.”
The companies have already profited handsomely from the tollway mainly through deals with their construction subsidiaries and through toll revenues. In annual reports, ACS Group reported the tollway earned $74 million in 2022 and $97 million in 2023, though BTG has refused to disclose its entire take. Based on invoices obtained by the Observer, during construction from 2016 to 2020, BTG paid $815 million to subsidiaries of the same firms—Dragados USA and Pulice Construction, owned by ACS Group, and Shikun & Binui America, the three of which formed a joint venture called Almeda Genoa Constructors.
Despite reports of construction-related deaths and injuries related to Almeda Genoa Constructors, the venture continued to receive new TxDOT contracts, now totaling at least $4.9 billion for at least 24 projects since 2016, according to state records.
Even with all those profits, the equity firms making up BTG have so far repaid little of their debts, some of which were financed by public agencies and taxpayers, according to credit reports and experts interviewed by the Observer. For the $1.1 billion-construction phase, TxDOT contributed $17.1 million to the 288 tollway project, the U.S. Department of Transportation loaned $357 million to the companies under the Transportation Infrastructure Finance and Innovation Act (TIFIA), and the Texas Private Activity Bond Surface Transportation Corporation, a finance arm of TxDOT, issued a $273 million tax-exempt private activity bond to BTG.
Sandro Scenga, a spokesperson for the national credit rating agency Fitch Ratings, told the Observer that BTG still owes all $273 million in bonds and $378 million on the TIFIA loan, which is anticipated to be paid off after the company receives compensation from TxDOT for the early termination of the agreement.
Between August 2022 and March 2023, ACS Group bought out the five other BTG equity partners, generating hundreds of millions in profits for those companies. Then, last December, ACS Group sold a 57 percent stake in BTG for $1.5 billion to Abertis, a company that is half owned by ACS Group. The move generated $200 million in capital gains, according to ACS Group’s 2023 annual report.
In an interview, Rosemary Batt, professor at the Cornell University School of Industrial and Labor Relations and author of Private Equity at Work: When Wall Street Manages Main Street, explained that ACS Group operated the tollway like most private equity firms operate any company: invest a scant amount, accumulate debts, and siphon as much profit as possible before getting out without assuming liability for the company’s long-term debt.
“The debt is leveraged on the company, and then they try to recoup the money in about a five-year period,” Batt said, adding that private equity companies generally invest little to get a higher rate of return when they sell. “If I buy something for 100 million and then sell it later for 200, then my return on my own equity is two to one, right? But if I only put in 50 and then I sell it for 200, my reported return on equity is four to one.”
Unlike public corporations which generally operate companies with about 70 percent equity and 30 percent debt, the ratios are typically reversed for private equity companies, Batt writes in her book.
Batt said that ACS Group most likely bought and sold 288 tollway shares so it could return more earnings to shareholders within the typical five-year funding cycle. “It may be because they waited until year seven, a company might be more valuable and they would get higher returns, which would go to the investors. But if they need to sell something in year five, they sell it often to another private equity firm. So there’s a lot of horse trading that happens.”
Seemingly, months before the Texas Transportation Commission decided to initiate the process to terminate the tollway lease, ACS Group was already on its way out. At the end of 2023, ACS Group announced to its shareholders it would be selling off another 22 percent of its shares.
The Spanish firm has constructed and operated more than 130 public-private infrastructure projects worldwide since 1967. It took in a net profit of $867 million last year, and its largest market now is in North America.
ACS Group did not respond to a request for comment for this story by publication time and has previously referred requests about the 288 tollway to BTG.
These days, private-public partnership tollways have fallen out of favor with Texans. The SH 288 tollway was the last from former Texas Governor Rick Perry’s initiative to build private tollways statewide. Others included the LBJ-635 Express Corridor, the North Tarrant Express, and State Highway 130 in Central Texas.
GOP state Senator Robert Nichols told the Observer that TxDOT turned to leasing out public highways for private tollways when the state did not have enough revenues to build new roads. Now, the situation is different, he says. “Now that we’ve got money to build highways … we’re kind of getting away from that. We’re trying to get in a position where we can control that and have more reasonable rates.”
In 2013, Nichols carried a bill to limit the state toll road buyback price to a set amount based on the number of contract years elapsed instead of market rate. That bill became law; otherwise, TxDOT would be paying much more than $1.7 billion to buy back the 288 tollway today.
TxDOT did not respond to the Observer’s question about whether the Texas Transportation Finance Corporation, newly formed to engage in the “acquisition, construction, maintenance, or operation of a toll facility,” will be buying back any other privately owned tollways around the state.
What’s New?
Texas is being battered by huge hailstones the size of quarters, powerful winds of up to 65mph and thunderstorms on Christmas Eve.
Why It Matters
The winter storms come as many Americans traveled home just in time for the holidays.
The American Automobile Association (AAA) predicted a record-breaking year for holiday travel, with more than 119 million expected to hit the roads and the skies.
Last weekend was expected to be the busiest travel period, but Texans who left their travel to Christmas Eve may have been faced with hailstorms, flooded roadways and even potential tornadoes.
The storms are predicted to continue until Christmas Day, meaning Texans are likely in for a wet, not a white Christmas, this year.
What To Know
The National Weather Service (NWS) has placed much of Texas under severe thunderstorm warnings after a winter storm brought heavy rain and strong winds to the state today.
A flash flood warning was issued in the Fort Worth, Texas, area on Tuesday while a tornado warning was also issued for the southeast region of the state as forecasters warned of multiple tornadoes, winds of up to 65mph and hail of up to two inches diameter.
Many Texans have been sharing footage and images of large hailstones that landed in their backyards. So far, there have been no reports of serious damage from the hailstorm.
A ground stop was issued at Bush Intercontinental Airport on Tuesday afternoon amid the severe weather.
The NWS has also warned that the environment “will support a threat for supercells with isolated large hail. A marginal wind-damage threat may also develop along the more intense parts of the line.”
Supercells refer to rotating thunderstorms that can last for hours, travel hundreds of miles and often produce tornadoes.
What People Are Saying
National Weather Service said in a statement earlier today, “A line of strong to severe thunderstorms, capable of large hail and marginally severe gusts, is expected to develop late this afternoon into this evening across east-central Texas.”
One Cypress, Texas resident, who shared a video of huge hailstones bouncing off the ground in her backyard, wrote on X, “It is bonkers at my home right now in Cypress, TX. Suburb of Houston. Major hail and rain.”
Meredith Seaver, another Cypress, Texas, resident shared a picture of huge hailstones, and asked, “It’s a Christmas miracle?”
Forecaster Max Velocity said on X, “NASTY LINE OF STORMS will move into SE Texas tonight, including Houston! Damaging winds, hail, and a tornado will be possible. Santa will have to navigate around these storms!”
What Happens Next?
The storm’s heavy rain and strong winds are expected to continue until 5 a.m. CST.
The National Weather Service has placed regions of Texas under severe thunderstorm warnings until 8 p.m. CST, with severe thunderstorm watches issued for parts of Texas until 12 a.m. CST.
Light rain is expected on Christmas Day and through Thursday while another storm system is predicted to move into the region on Friday, bringing continued rain through Saturday.
I arrived at the San Antonio International Airport and stepped outside to meet my ride. The dry, hot air gave me an instant flashback to my days intermittently working in the West Texas oilfield. I’ve seen quite a bit of the Lone Star State and couldn’t wait to get to Fredericksburg. I’d heard so much about this cute historical German town in the Texas Hill Country.
After an hour’s drive, the shuttle driver and my host said, “We’re on Wine Road 290.” The county has over 75 wineries, vineyards, and wine-tasting rooms. I thought, “What a perfect getaway for Texans and travelers flying into the area.”
A unique stay in a whimsical hideaway
Blue Sage No. 12
I wasn’t surprised to see the rolling hills as we drove toward the property I was staying at outside town. But I was astonished at how green this part of Texas was, especially since I was visiting at the end of the summer. I learned that Fredericksburg is home to the largest working wildflower farm, Wildseed Farms, and seeing the fields of flowers is a popular activity during the spring. People come from all over to admire the bluebonnets, Indian paintbrushes, and red poppies.
We pulled up to Blue Sage, where I was staying, and I was instantly excited to check in to my accommodations — No. 12. The dark blue treehouse-inspired cottages looked like they belonged in a fairy tale. As I toured the inside of mine, I was awed by the warm and inviting boho decor. The loft room, with a giant soak tub overlooking the woods, was grounding, and I knew I had found a comfy weekday retreat.
After resting and freshening up from the long travel day, I met with friends to enjoy cocktails at Chase’s Place Cocktails + Kitchen in Fredericksburg’s historic district. We sipped and savored a handcrafted cocktail and a few small bites in their relaxing lounge area before heading to Hill & Vine for dinner. Known for their Southern staples, trying Texas wine and their black-eyed pea hummus was delicious.
Hike at Enchanted Rock State Natural Area
Enchanted Rock on a blue sky day / Ashlee hiking the Summit Trail
In 2023, over 300,000 people visited Enchanted Rock State Natural Area. It’s a popular place for hiking, camping, and bird-watching – many migratory birds fly through.
The iconic rock feature is one billion years old, and you can hike to the top of the pink granite dome along the Summit Trail. The climb is steep, but the views of Hill Country are worth the trek.
Planning tip: Be sure to make reservations to visit the park. October through May are the busiest times of the year to explore, and parking is limited.
After hiking, we drove back into town for lunch at Hill Country Herb Garden. Their menu is curated with wellness in mind and rotates seasonally. I had a beautiful kale and quinoa salad with steak, just what my body needed after the morning’s hike. After lunch, we toured the herb gardens, gift shop, and spa — they make custom scents. There are even 14 quaint little cottages on the property you can book for lodging.
Learn about Fredericksburg’s German heritage
Outside of the Vereins Kirche Museum / Lunch at the Hill Country Herb Garden
Germans immigrated to the area in the mid-1800s after being enticed by promises of a new life. It wasn’t just Germans; Danish and Swiss settlers also made their way to Fredericksburg. You can learn more about the town’s history at the Vereins Kirche Museum and the Pioneer Museum.
You can do a self-guided tour of a historic homestead at the Pioneer Museum and see inside the buildings, including a traditional Sunday house. A Sunday house is where families that lived out of town and worked on farms and ranches would stay on the weekends so they could attend church.
After an exciting day of hiking and tours, we ended the evening with an Italian-inspired dinner at Alla Campagna. The savory Heritage Chicken Risotto and a Texas white wine were the perfect way to end the day. I couldn’t resist topping the day off with a few bites of homemade chocolate, vanilla, and pistachio gelato.
A morning of local retail therapy
Row of cowboy boots at Allens Boots / Breakfast at the Keidel Pharmacy
The following day, we drove into town and had breakfast at Keidel Pharmacy inside the new Albert Hotel (the largest hotel on the main street, opening in January 2025). I was pleased to start the day with a piece of gluten-free cinnamon coffee cake and an almond milk London Fog latte.
Afterward, I spent a few hours window shopping and checking out all the cute local stores, such as Carol Hicks Bolton, Blackchalk Home + Laundry, Allens Boots, and Flying Cow Tallow.
For lunch, we grabbed a glass of rosé and a quick salad at Standard Public House before heading to the vineyards for wine tasting.
Discover Fredericksburg’s wine scene
Meierstone Vineyards / Airis’Ele Vineyards
While traveling, there is something glamorous and fun about visiting local wineries, hearing stories from the owners, and tasting wine. Our first stop was Meierstone Vineyards. Krystal Patel’s family has been making 100% Texas wine for seven generations, starting in the 1840s. I loved the white wine flight, and their 2023 Trebbiano was my favorite.
Next, we visited Airis’Ele Vineyards. Their team has over 40 years of experience in the wine business. I found their wine-tasting room welcoming, with big windows for Summer Tanager bird-watching. Their sweet Bienvenue was refreshing, especially on a hot day.
Don’t miss this family-run farmstand
Das Peach Haus Farmstand
Last, we headed to Das Peach Haus farmstand, which has been in business for over 50 years. The Fischer & Wieser family business sells local wines made from 100% Texas grapes, fruit jams, jellies, sauces, and other delectable artisanal goods.
Deanna Fischer, the Chief Experience Officer, shared that the company’s goal is to “Create flavorful experiences that make people happy.”
You can sample many of the farmstand’s specialty foods to select your favorites before purchasing. I appreciated that each jar provides examples of how to pair it with your next happy hour hors d’œuvre or cozy dinner at home. You can also take one of their cooking classes or have a hand-crafted cocktail at Dietz Distillery, which is next door.
It’s nice to see places like this still preserving family, food, and faith in the community.
Texas vs. Clemson: Quinn Ewers, Hayden Conner react to CFP win
Texas defeated Clemson, 38-24, in the first round of the 2024 College Football Playoff.
Texas football is preparing to face the champion of its old conference in the College Football Playoff, with Big 12 champion Arizona State awaiting in the Peach Bowl.
Texas was tested in the first round, defeating Clemson 34-24 behind a rejuvenated running attack led by Jaydon Blue and Quintrevion Wisner. However, the Sun Devils, winners of six straight games, also have a fierce rushing attack led by running back Cam Skattebo, who has run for 1,568 yards rushing and 22 total touchdowns.
BUY TICKETS FOR TEXAS VS. ARIZONA STATE HERE
The Peach Bowl is held at the Mercedes-Benz Stadium in Atlanta the same site of Texas’ loss to Georgia in the Southeastern Conference championship game. The winner will advance to the Cotton Bowl, where Ohio State or Big Ten champion Oregon will await. Ohio State advanced to the quarterfinals after beating Tennessee at home, 42-17.
Here’s everything to know about the upcoming game:
Where is Texas vs Arizona State?
Texas will travel to Mercedes-Benz Stadium in Atlanta to face Arizona State. It is also the location of the national championship game.
CFP Bowl locations
Peach Bowl
Location: Mercedes-Benz Stadium in Atlanta.
Matchup: No. 5 Texas vs. No. 4 Arizona State
Fiesta Bowl
Location: State Farm Stadium in Glendale, Arizona.
Matchup: No. 3 Boise State vs. No. 6 Penn State
Sugar Bowl
Location: Caesars Superdome in New Orleans.
Matchup: No. 2 Georgia vs. No. 7 Notre Dame
Rose Bowl
Location: Rose Bowl in Pasadena, California.
Matchup: No. 8 Ohio State vs. No. 1 Oregon
Texas vs. Arizona State tickets
Tickets for Texas’ game against Arizona State are available here.
CFP schedule
Playoff quarterfinals
All times in CT
Tuesday, Dec. 31
Fiesta Bowl, 6:30 p.m.
Wednesday, Jan. 1
Peach Bowl, noon
Rose Bowl, 4 p.m.
Sugar Bowl, 7:45 p.m.
Playoff semifinals
All times in CT
Thursday, Jan. 9
Orange Bowl, 6:30 p.m.
Friday, Jan. 10
Cotton Bowl, 6:30 p.m.
Playoff Championship
Monday, Jan. 20 at 6:30 p.m. CT
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