RICHMOND — A state transportation board on Wednesday approved the use of more than $900 million in public bonds for a new, tolled highway out of Hampton Roads.
The authorization – for an alternative, 55-mile stretch of U.S. 460 from Suffolk westward – cleared the path for a project that has been discussed for nearly two decades, while also exhausting the last major chunk of bonds the state has set aside for big transportation projects.
“This is it for a few more years with no new money coming in,” said Mark Peake, the Lynchburg District representative on the Commonwealth Transportation Board, which approved the funds.
Gov. Bob McDonnell hailed the project in a prepared statement as an economic driver for the region that will spur port-related development along the corridor, provide another route out of Hampton Roads for trucks, and improve the region’s transportation network for the military.
Construction, scheduled to begin in 2014 after a year of design and right-of-way acquisition, is estimated to create 4,000 jobs, according to McDonnell. The road is projected to create another 14,000 long-term jobs when it opens in 2018, he said.
Stewart Schwartz, executive director of the Coalition for Smarter Growth, was skeptical of the economic benefit. He asked the transportation board during a public comment period whether the projections were worth the public debt.
“It, to me, is an egregious waste of scarce dollars,” he said later.
He suggested there were better uses for the money in Hampton Roads, such as further buying down the cost of the tolls scheduled to begin in 2014 on the Midtown and Downtown tunnels. That $2.1 billion project will add a second Midtown tube, refurbish the Downtown Tunnel and extend a freeway in Portsmouth.
Tolls on the new U.S. 460 are set to begin at $3.69 for cars that travel the entire stretch, and $11.72 for trucks. The money will pay back as much as $216 million in debt that will be issued for the project by a state-created nonprofit corporation similar to the authority that runs the Chesapeake Bay Bridge-Tunnel.
The balance of the nearly $1.4 billion project will be paid for with public funds, most of it from bonds authorized by McDonnell’s 2011 transportation funding package. The Virginia Port Authority also has committed $250 million. The state’s contribution could fall by as much as $341 million depending on how much of an anticipated federal loan is approved for the project.
Unlike the Midtown project, the state is using no private equity for the new U.S. 460. That approach was considered, but the return expected by private investors, combined with the low traffic counts expected for a new highway, produced projected tolls that were twice as high as those now in play.
The old U.S. 460 will remain a free alternative for motorists.
Shep Miller, a Commonwealth Transportation Board member from Hampton Roads, said it took him a while to embrace the project, but the current approach was the only way to get it done in light of the scarcity of state revenue for new roads. He urged other board members to advocate for new sources of transportation funding.
Sean Connaughton, McDonnell’s secretary of transportation, said the new road will provide an alternative for truckers who want to avoid the bottlenecks of Interstate 64 on the Peninsula. Miller echoed that sentiment, calling attention to the lack of options out of the region.
“We’re in a hell of a fix there,” he said. “We’re in a cul-de-sac.”
The new 460, which will have seven exits, is expected to offer motorists a nearly identical travel time between Richmond and Norfolk as Interstate 64 does, according to a presentation from state officials. Because of the congestion on I-64, however, the projected one-hour-and-45-minute trip will be more reliable on the new 460. Tolling will be electronic.