CTB Advances $1.4 Billion U.S. 460 Project

With a new financing plan, the interstate-grade U.S. 460 Connector is a go, as the McDonnell administration touts the highway’s economic development potential.

by James A. Bacon

The Commonwealth Transportation Board approved Wednesday the issuance of up to $425 million in tax-free bonds to finance construction of the U.S. 460 Connector between Petersburg and Suffolk in one of the priciest economic development initiatives in Virginia history.

The state will contribute roughly 80% of the cost of the $1.4 billion project with funds funneled through the Virginia Department of Transportation (VDOT) and the Virginia Port Authority. Bonds, to be supported by toll revenues, will pay for the balance of the 55-mile, Interstate-grade highway, which is designed to bolster the competitive position of Virginia’s ports and attract large industrial and logistical investments to the U.S. 460 corridor.

Most of Virginia’s transportation mega-projects address a congestion crisis, but U.S. 460 represents an opportunity, Aubrey L. Layne, the Hampton Roads district representative, told fellow CTB members. Layne, who has worked behind the scenes for years to bring the project to fruition, described the project as “forward looking.” An upgraded U.S. 460 will relieve an overloaded Interstate 64 north of the James River and it will serve as an alternate hurricane evacuation route, but its main purpose is to stimulate economic development. U.S. 460, he said, has great “potential.”

“If the governor were here today, he’d say one word: jobs,” injected Gary Garczynski, Northern Virginia district representative, later in the meeting. He hopes the U.S. 460 project will provide a model for a north-south outer beltway for Northern Virginia, he added.

“The new Route 460 highway is critical to economic development in this growing region of Virginia,” confirmed Governor Bob McDonnell in a prepared statement released shortly after the vote. “The new highway will stimulate business development in the region and accommodate freater freight traffic from the Port of Virginia, benefiting the entire Commonwealth. Chmura Economics estimates that the new highway will have an annual economic impact by 2020 estimated at $7.3 billion.”

Sheppard Miller (left) and Aubrey Layne, representatives from Hampton Roads, chat after the CTB vote on U.S. 460.

Although several CTB members pressed McDonnell administration officials for assurances that the state was amply protected in the event of a hypothetical bond default, the board voted unanimously to approve the bond issue.

The main note of skepticism came from Stewart Schwartz, executive director of the Coalition for Smarter Growth. Speaking during the public comment session, he described the administration’s approach as a “rush to judgment” on the project, which has received little public scrutiny and review. The case for the highway, he said, was based upon a number of economic assumptions, such as an anticipated jump in container traffic that Hampton Roads will see when a major Panama Canal widening project is complete and an ensuing surge in the number of trucks and tolls on U.S. 460.

Schwartz also questioned whether the state’s commitment of between $753 million to $930 million was the optimal use of finite resources. The state has tapped out its borrowing capacity and state funds for new construction is fast eroding. There won’t be any more money for mega-projects available for years, he said. In a knowledge-intensive economy in which knowledge workers are increasingly stuck in traffic, he asked, is betting on factories and distribution centers a wise use of money? “Are there better investments you could be making with scarce money? … If this were your business, would you make the investment?” Read more.

10 Responses to CTB Advances $1.4 Billion U.S. 460 Project

  1. Good!

    McDonnell has done 10X more than Tim Kaine did. And he got it done in spite of the Imperial Clown Show in Richmond.

    No surprise that Capt. NIMBY-Schwartz showed up. Knowledge workers are stuck in traffic! But when the road projects are proposed to solve that problem he’ll oppose them too.

    NoVa wants an outer beltway on that same Rt460 model. Oh hell yeah! What? There’s no more debt capacity? I guess Mr. Garczynski didn’t fully think that one out. But wait. McDonnell wants to “privatize” (i.e. sell) the Virginia Port Authority to the highest bidder. And he won’t need to spend the money on Rt 460. Outer beltway – here we come! Garczynski’s a frickin’ genius.

    I know! We can take the freight from those phat assed Panamax ships, unload them onto trucks, ship them up that trippin’ new Rt 460, hit the even more trippin’ outer beltway and then load the crap onto planes at Dulles and fly it somewhere.

    Now, if that damn outer beltway actually came anywhere near the freight terminal at Dulles. Oh well, the trucks can always take the Beltway HOT ($1 / mi) lanes to the “fund the Metro” ($14 / trip) Toll Rd to the airport.

    It’s getting late. Somebody remind me tomorrow to buy some land along the route of the proposed outer beltway before TMT snaps it all up.

    On a more serious note, I really do like McDonnell. He’s a man of action. A modern day George Washington. Not like Richmond Bubbleup. He’s a man of words and a fan of lawsuits. More Jeffersonian.

    By the way, Mr Bubbleup – what do your friends at the PEC and SELC think of the I460 plan? No problem since it doesn’t threaten the “viewscapes” of their billionaire members?

  2. there’s an easier way to upgrade transportation from Richmond, I-85, etc and that is to add tolls to I-64 to pay for added lanes – which it needs anyhow then add a 25 mile connector toll road south to Hopewell.

    In other words make I-64 a toll road and charge enough in tolls to build the connector toll road. Use a TIFIA or other infrastructure bank or make it part of the privatization of the ports to finance it up front like is being done with HOT lanes.

    that’s what a REAL “man of action” would do instead of this fiddling and farting around which in my mind is little better than his “plan” to sell/lease ABC stores to finance roads.

    Kaine, BTW made sure that HOT Lanes and Metro/Silver stayed alive and went forward – if McDonnell had been involved he would have likely been opposed to public-financing of Metro.

    the bottom line here is that McDonnell talks the economic development game but he does not walk the walk because if he did – we’d not have taxpayers on the hook to fund private enterprise.

    In terms of ports tonnage or dollars – no matter what Virginia or Baltimore does – they are a 1000 miles further away than the Southern US Ports and the top competitors are going to be those southern ports that provide Panamax facilities.

    The state is dangerously close to dumping taxpayer money down a rathole by substituting it’s hopes and desires for hard business sense.

    The best money the State could spend would be to pay for an analysis of the southern US ports Panamax facilities vs Hampton and how much more it would cost to ship cargo from southern ports to Hampton.

    This is what business would do except they’d do it to serve a specific company’s proprietary interests. We need that same thing done to support the specific interests of Va taxpayers.

    The big infrastructure companies like Transurban, Fluor, Macquarie build not only highways but airports and sea ports.

    Is this the best deal that Va can get?

    I do support an ROI approach and I do think that spending Va gas tax dollars on corridors of state significance tied to economic development is reasonable – much more reasonable than the bypass in Cville or Till Hazel, Chases self-serving visions.

    • LarryG:

      Your posts are a “target rich” environment when it comes to economic flaws.

      Sadly, I don’t have enough time to shoot at all the targets. I’ll just choose one…

      “In terms of ports tonnage or dollars – no matter what Virginia or Baltimore does – they are a 1000 miles further away than the Southern US Ports and the top competitors are going to be those southern ports that provide Panamax facilities.”.

      Savannah can’t handle a Panamax ship because its channel is too shallow and there are severe ecological concerns about dredging the channel.

      Even if the southern ports can be dredged – what is your point about being 1,000 miles away? 1,000 miles away from what? Hampton Roads?

      I mean, you do understand that keeping the cargo on the ship is the cheapest approach, right? Four things count:

      1. How close the port is to the final destination of the goods.
      2. Does the port have deep enough channels and big enough dock facilities for the Panamax ships?
      3. Is there good technology for the rapid dockside handling of onloading and offloading cargo?
      4. Is there good infrastructure for shipping the cargo overland (preferably by rail) once it is unloaded?

      Now, help me with that 1,000 mile comment of yours.

      1,000 miles from where?

  3. Let’s just use the new Fairfax County transportation funding formula. The benefiting landowners pay 59.5% of the costs for these “critical” roads. If government officials operated this way, an awful lot of “essential needs” would no longer be “essential.”

    Let’s also use the Fairfax County DOT analysis model for determining what transportation projects are needed and in what order. Why should taxpayers fund the “build-a-road-any-road” approach offered by DJR?

    NoVA doesn’t want the Outer Beltway. The Fairfax County BoS opposes it; as do Loudoun, Fauquier and Clark Counties. Why should taxpayer dollars be spent on something that is not wanted, except by private interests? Why should taxpayer dollars be spent on something that does not improve traffic flow and produces a low ROI?

    • TMT:

      You were once the most bitter opponent to the Tyson’s “densification” plan. You cited study after study as to why it would never work. Your only alternative was to say that new businesses should locate elsewhere because Tyson’s was impossible.

      Now, you seem to hold the plan in high regard. The formerly evil Fairfax County Board of Supervisors is now you ally on the outer beltway. What happened to your thesis that the whole board are pawns of the development community?

      You even want “the new Fairfax County transportation funding formula” held out as a standard for others to follow.

      What has occasioned this new outlook on your part regarding Fairfax County?

  4. “NoVA doesn’t want the Outer Beltway.”

    Your Highness, King TMT … please accept the apologies of a humble serf. I did not realize you had been coronated as the King of NoVa!

    We commoners don’t possess your regal knowledge. For example, while you decry VDOT for failing to calculate ROI for road projects you miraculously are able to declare that the Outer Beltway has a “low ROI”. No doubt devine inspiration guides your ROI calculation.

    Also, Sire, there is heresy in our midst. The Knights of the Fairfax, Loudoun, Fauquier and Clark Round Tables are indeed faithful followers. However, there is a rouge knight named Garczynski. He apparently has secretly pledged allegiance to the CTB Empire while pretending to be a loyal subject of The King of NoVa. Off with his head, Your Highness!

  5. We’ll just need to keep working with the General Assembly and the Tysons Partnership to prevent/limit funding for the Outer Beltway. The alternative being offered are the roads and bus transit improvements needed by Tysons. Garczynski doesn’t sit on the Senate Finance Committee. Janet Howell does; and quite a few people have been urging her to steer money away from the Outer Beltway and into Tysons. Time will tell who is successful.

    • Shouldn’t your position be that VDOT needs to produce a detailed ROI and then people can decide?

      Sometimes the “anti” forces are as bad as the developers. At the mere whisper of an outer beltway, they start rallying forces to oppose it.

  6. There is nothing substantial supporting the Outer Beltway. It’s a “wish road.” One of the key reasons the various boards of supervisors opposed it was a lack of existing traffic demand, i.e., inadequate need. They felt money should be spent on other projects where there is clearly existing need.
    The Outer Beltway could be built as a toll road financed by those who want it. But they know they’d lose their shirts.

  7. The big problem not being noticed is that Va and VDOT no longer require a toll road to be fully self-supporting only from tolls.

    They are now committing state money (hopefully NOT general revenues) to subsidize toll roads and cannot be self-sufficient from tolls.

    This is an important development for three reasons.

    The first is that the state is now doing investor-grade studies to determine the viability of a toll road

    and

    two – they’re committing future transportation revenues to decades, generational length financial commitments to private toll operators.

    and

    there is some indications that these state subsidies might be paid from state bonds – which is disturbing if the source of the payback is general revenues.

    Think of this in terms of roads like the Outer Beltway.

    The road can be built no matter whether it is self-supporting or not and we don’t even know what the percent subsidy will be – apparently a “case-by-case” basis.

    So you’re having unelected folks committing state taxpayers to toll road subsidies – decades worth.

    this has a bad feeling to it.

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