Carr Wrecks

Richard Carr, president of a firm that wants to build the $350 million South Mountain Toll Road, has extensive experience in "public-private partnerships." Unfortunately, most of those experiences have been bad.

Richard Lloyd Carr wants the state to allow his company, Interwest Management, Inc., to build one of Arizona's first toll roads.

As unlikely as tollways sound in Arizona, the South Mountain Toll Road would go one better: It wouldn't be state-owned. A special district would be formed to acquire the right of way, design the project and issue the estimated $350 million in bonds to build it. Tolls paid by motorists using the road would retire the debt. Once the debt was retired, the district would turn over the road to the state.

It is an idea that cash-strapped highway departments throughout the nation are beginning to view favorably; it's one way to fulfill their mandate without raising taxes.

Interwest president Richard Carr no doubt sees low risk and high reward in such "public-private" infrastructure improvements--and, increasingly, politicians are adopting similar views. That's because the bond buyers assume all the risk; even if the project ultimately can't pay for itself, the infrastructure isn't going to be torn apart.

Carr has shown a knack for recognizing needs, ginning up demand and selling himself as the path to progress--often in obscure, politically unsophisticated burgs. He sold Apache Junction a sewer system. He tried to sell Quartzsite a sewer and a prison, but Quartzsite only bought the sewer. The City of Douglas was poised to let Carr build a private prison, but city fathers got spooked and backed away.

An urban tollway would be a crown jewel for Carr.
The South Mountain Toll Road would loop around South Mountain, effectively allowing Interstate 10 travelers to bypass Phoenix. It could also make property along its path--including the Gila River Indian Community--ripe for commercial development.

Phoenix-based Interwest, which Carr says is a wholly owned subsidiary of Omaha-based architecture/engineering powerhouse Dana Larson Roubal (DLR), is the only company that responded to a February 1996 Arizona Department of Transportation request for proposals to build the tollway.

The state is determining whether to proceed with the project, and, if it does, whether Interwest should be entrusted with the responsibility of building it.

The latter question should give ADOT pause. The toll-road project isn't the first "public-private partnership" Carr has attempted, and his track record to date has been anything but sterling. In fact, nearly everywhere he treads, Richard Carr seems to leave a wake of litigation, political intrigue, bankruptcy and dubious characters. Consider:

* A year after Apache Junction's $32 million sewer system became functional, the special district that Carr organized to build it has declared bankruptcy. Claims of fraud, forgery and lawsuits are flowing like, well, wastewater. And the FBI is poking around.

* Carr convinced the town of Quartzsite to build a sewer system. The project helped polarize the community and spawn a thicket of lawsuits. One local politico was even tried for hatching a murder plot.

* Carr has allied himself with characters who can be charitably described as questionable, including a man who went to federal prison for insurance fraud; former government transportation officials who were forced to resign after they were caught taking bribes from contractors; and the very contractors who lost their licenses for bribing those officials.

* In his July 1995 proposal to ADOT, Carr claimed he was "currently managing development of" toll-road projects in Washington state and Nevada.

That was news to Frank Csiga, Nevada's chief highway engineer.
"They [Interwest] aren't managing a thing for us," says Csiga. "They just submitted a proposal." A proposal, Csiga adds, that was scrapped more than two years ago.

The only thing Carr managed in Washington was to provoke the wrath of residents.

Still, if Carr can reel in just one toll-road project, he stands to make a lot of money, regardless of that road's viability. Carr would get a good chunk of his money up-front, simply for putting the deal together. And with budgets in the hundreds of millions of dollars, what may seem like a modest percentage--Carr has demanded at least 8 percent in the past--could be a bonanza.

"That's where the scam can come in," warns C. Richard Lehmann, who tracks bond defaults for the Bond Investors Association, a nonprofit industry watchdog group based in Miami, Florida.

Lehmann says Carr's method--creating a special district to issue bonds--has proved a recipe for disaster in the past.

"You set these things up, and no one's left minding the store," Lehmann says. "And since there's no equity, the bondholders take the loss."

It would seem that Richard Carr, 59, was bred to build.
Born in Nebraska and raised in South Dakota, Carr earned a bachelor's degree in engineering from South Dakota State University. After graduation, he married fellow alum Marie Tyler and went to work in 1963 as general manager for his family's construction firm.

Seven years later, Carr became construction manager in South Dakota for DLR.
In 1977, Carr moved to Arizona with his family. Five years later, he and Richard Reese became partners in Reese-Carr, a construction-management firm. Carr bought out Reese in 1988. Two years later, Carr's new company, Project Control, Inc., was the subject of a glowing profile in the Arizona Republic. Carr explained that Project Control specialized in salvaging large construction projects that had run into budget problems.

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