Whenever public toll roads are leased or sold to private investors, one of the most important clauses in the contract is the “non-compete” clause.  Basically, the clause states that roads that parallel a toll road, while they can be repaired as needed, will not be widened to relieve congestion.  If they are, the government must pay the investors a substantial penalty.

The reason why investors demand that clause is because if parallel roads were widened, more and more people would quit driving on the toll road and start using the free roads.  The investors could lose all of their investment.  These alternate "free" roads compete with the toll roads and are therefore known as “competing facilities.”  

Blanco Road and Bulverde Road north of 1604 are being widened. But the non-compete clause prevents future expansion though thousands of new homes that are platted for the area. 

In their public hearing on June 11, 2008, the ARMA stated that the 281 project will have a “non-compete” clause.  If a competing facility is built, the taxpayers are on the hook for paying the bond investors a penalty for doing so. There will be financial, punitive consequence for building competing facilities.