Bacon's Rebellion

Route 288, Capital One and $434 Million

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by

James A. Bacon
in

From today’s Road to Ruin blog:

The Route 288 project, which Virginia taxpayers funded to the tune of $434 million, was always billed as an “economic development” project. The primary impetus for overriding the normal allocation of state transportation dollars and running up a $248 million project deficit (which was repaid subsequently with General Fund dollars) was the desire to attract Capital One to the West Creek office park.

In 1999 the giant credit card company was searching for a site to establish a national operations center expected to employ 8,000 employees. One of the sites under consideration was the West Creek office park west of Richmond. Capital One demanded some $240 million in transportation improvements, including completion of 288, as a condition for locating there.

It turns out, according to a nugget buried in a Richmond Times-Dispatch investigation into the politics of Route 288, that Capital One was seriously considering another site to the north of Richmond. Indeed, when Richmond business tycoons William Goodwin and “Booty” Armstrong revived an option to purchase West Creek from the original developer, the newspaper reports, “they thought the company had chosen a site north of Richmond at Interstate 295.”

That’s quite a revelation: There was another site in the Richmond region that satisfied, or came very close to satisfying, Capital One’s requirements — without the need to build a $434 million, four-lane, limited-access highway!

Let me clarify the issue here: The Commonwealth of Virginia spent $434 million to ensure that Capital One would locate in West Creek west of Richmond as opposed to a different location north of Richmond.

Pardon me while I temporarily take leave of my senses. That’s absolutely friggin’ insane! That is an unprecedented waste of state funds! No friggin’ wonder people don’t want to pay more in taxes to build more roads! Politicians cannot be trusted to make intelligent decisions! Politicians should all be hanged!

OK, I feel better now.

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19 responses to “Route 288, Capital One and $434 Million”

  1. Anonymous Avatar
    Anonymous

    Well, no, politicians can’t be trusted. This is especially true when they respond to the stated needs of business.

    Being made up of business people and lawyers themselves and all sorts of other professions, why would you expect them to behave differently?

    No one can be trusted to do things that are in my best interest other than me…and I can only trusted so far.

  2. Steve Haner Avatar
    Steve Haner

    Your revisionist history is amazing. Route 288 was on the planning table for 30-40 years, long before those projects came along and provided the final impetus. It exists to complete the irregular loop around the the city, moving cars and trucks from 95 to 64 without clogging downtown. I was on it last week at 6:30 a.m. and it was packed, moving traffic that is 95 percent unrelated to those projects.

    By every measure it is a success, and we can see the difference on the Powhite. If the goal is mobility and less congestion, it succeeded. Will it start to clog up again? Sure. But we would be far worse now and in the future without this road. Would it have made sense to toll it? Certainly. But the voters would have rebelled.

  3. JamesRiverGOP Avatar
    JamesRiverGOP

    Oh, it’s one thing to criticize from afar, albeit it quite a fair thing to do. That’s what makes our system a good one.

    But instead of simply railing against politicians, why not work to become one? If the pols are so bad, jump into the game. Try your hand at it …

  4. Jim Bacon Avatar
    Jim Bacon

    Steve, Sure, Route 288 was on the planning table for decades. The same could be said of a lot of other projects that have yet to be funded. What’s remarkable about Route 288 is the way it suddenly moved to the front of the line ahead of all other projects.

    Route 288 may offer a benefit to some commuters, but it didn’t move to the head of the line as a congestion-mitigation measure. Indeed, it bumped other projects, some of which (I would speculate) would have done more to mitigate congestion. Instead, Route 288 moved to the head of the line as an economic development initiative. Capital One precipitated the deal. Yet, we now find out, Capital One could have located elsewhere at far less expense.

    JamesRiverGOP, I have no interest in jumping into the political realm. I would be most unsuitable, ineffective and unelectable. There is value, however, in society to holding politicians accountable. It falls upon each of us to contribute what we do best.

  5. GOPHokie Avatar
    GOPHokie

    It sounds like a crooked deal, but I always thought it was dumb that the “beltway” didnt go all the way around.
    Now it at least makes more sense on the setup of the Richmond road system.

  6. Ross Avatar
    Ross

    Yeah, but now we can use that space north of Richmond for THE NASCAR HALL OF FAME!!!

    Doesn’t it feel worth it now?

  7. Anonymous Avatar
    Anonymous

    This all brings up the great question of incentives. Why incent companies to locate here in the first place? Oregon, Washington, Idaho, and Utah don’t dabble in incentives to the same degree as southern states yet they seem to do OK with job creation.

    What would happen if we spent all of our incentive funds on improving our school systems, parks, road networks, and higher educational centers including research facilities? I bet the job creation animal would dwarf the things we are doing now.

  8. Mary Beth Nolan Avatar
    Mary Beth Nolan

    Agree with your incentive ideas – if you are already an attractive locale, companies want to locate there. Social engineering is rarely a good idea.

    However, if we use the incentives for improving our school systems, parks, etc. then we are back to trusting our elected officials to use that incentive money wisely. But at least that route would have more transparency.

  9. SouthoftheJames.com Avatar
    SouthoftheJames.com

    First, I want to thank the taxpayers of the Commonwealth for helping cut my travel time from my Chesterfield home to Short Pump mall in half, thus allowing me to hand over tons of sales tax money to VA and Henrico County.

    Seriously, this is a fascinating look at the perils of making the transportation-economic development link. The state swore off federal funds to get the site they wanted, and if they’d done tolls, the 288 project would now be hailed as a marvel of state policy innovation. Aside from the specious land uses, the lack of “Beltway” status for 288 is a real problem.

    Is there a reason why tolls cannot be instituted on the road now?

    — Conaway

  10. Will Vehrs Avatar
    Will Vehrs

    What was in our wallet?

    Capital One got a very large chunk of State Workforce Services incentive money to “train” individuals for newly created jobs. After a while, however, we found that they were laying off people at the back end while still “creating” new jobs at the front end. Couple that with their Enron-like personnel evaluation system and possible age-discrimination and one has to wonder if the state shouldn’t be a little more cognizant of market forces and corporate citizenship before laying out big incentives.

    Workforce services money is now in short supply and has been for some time.

  11. SouthoftheJames.com Avatar
    SouthoftheJames.com

    The irony is that workforce development is now touted by economic developers and corporate types as the best government incentive for “new economy” jobs as opposed to tax credits or bricks & mortar infrastructure such as 288.

    — Conaway

  12. Steve Haner Avatar
    Steve Haner

    Conaway, there is no reason tolls could not be imposed now, especially since it was built without federal money. Such a proposal would be a good test to see if the pro-toll Republicans really mean it or are just using that talk as a diversion. With tolls I’m sure we could talk some Frenchies or Aussies into buying a 50-year franchise on 288 and suck a buck or two more out of you as you head to Short Pump.

    Others: Virginia doesn’t spend much on economic incentives compared with other states, and in theory job training is portable and valuable to the worker, not just the firm. To go back to my original comment (and addressing the Big Fib behind Bacon’s rant) that wasn’t the primary reason for this project, either. It was built for the same reason all other roads should be built, and I’m sure it would handily pass any cost-benefit test imposed.

  13. CG2 Avatar
    CG2

    The incentives also take on a new cast when one looks at the reality that 98% of the businesses in Virginia creating 75% of the jobs are small businesses with fewer than 250 employees, and most with a lot fewer than that. Yet, we’ve cut all state funding for Small Business Development Centers and sliced the Dept of Business Assistance budget by more than a third. And, unlike the federal government, we have no small business set aside program and we continue to bundle state business into mega-contracts for which small businesses cannot compete.

  14. SouthoftheJames.com Avatar
    SouthoftheJames.com

    Steve: In the long-run, Chesterfield should actually benefit from the extension due to increased commercial development in the Western corridor. That will go a long way toward reducing the dependency on residential property taxes for county services. The sales tax leakage to Henrico and Richmond is short-term, and good planning will help alleviate traffic concerns if the commissioners and board make the right choices. The fact remains that 288/295 were built for the future, and it’s better to have them here now and work out the kinks than to imagine life without them at all.

    Claire: Didn’t the Wilder Commission findings indicate that many elements of the DBA/Commerce regime are redundant? Also, part of the problem with SBDC’s is that the business model is broken – firms should pay something, even if it is small, for the services.

    — Conaway

  15. Anonymous Avatar
    Anonymous

    Let me raise you CG2 – I am the economic development director for a rural community in southside virginia. Our existing infrastructure and workforce conditions mean that we are probably most competitive for 100-200 person companies. However, the nature of ED marketing and recruitment today now has VEDP and our regional partnership focused on the 200+ employee companies.

    Are we even oriented correctly as a state for economic development marketing? Further, and this isn’t a dig. The new VEDP director is from the world of corporate finance – is he the right person to understand how small companies work in small Virginia communities and how important these guys are to the Virginia job growth picture?

    Our Workforce Services folks maintain relationships with our local businesses, our VEDP folks help get them to come here but then vanish into the night off on a quest to find the next big prospect. Not a dig, just a fact.

  16. Scott Avatar
    Scott

    I guess I need to remind you that Booty’s on the Ukrops’ art center committee, not that Jim wants to talk about that little boondoggle.

  17. Anonymous Avatar
    Anonymous

    Tolls on 288? You’ve got to be kidding. I’d (MUCH) rather have my taxes increased, and I’m not exactly a fan of taxation.

    Toll roads are AWFUL to commute on. They significantly slow traffic, especially during the morning commute, and they cause a hugely disproportionate number of accidents.

    Start selling ourselves as the party of toll roads, and folks are going to think of you every morning as they sit in traffic waiting to get up to the toll booth, every time they get stuck behind an accident for an hour, and every time they have an accident. That’s going to win lots of fans.

    A day on the Powhite without an accident and resulting major backup is a rarity. I don’t think I’ve seen an accident yet on 288.

    Why not accept 288 as the locals have – as a terrific growth opportunity and something that will exponentially expand the local tax base?

    If there’s funny business in the contracts, fine, that should be exposed – but it’s the best (and one of the most popular) public works project I’ve seen in quite a while.

  18. Ray Hyde Avatar
    Ray Hyde

    Gee, you guys are really making me feel like a loser in land speculation. Not only did the state run six lanes of highway through my place and plant an interchange, but then the social engineers who think they understand the link between transportation and land use turned several thousand acres that would be light industrial any place else into “prime farmland”.

  19. Anonymous Avatar
    Anonymous

    screw you! I get to work much faster thanks to 288. so there.

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