The Third Crossing Is Slip Sliding Away

The Third Crossing over Hampton Roads is slipping further out of reach, reports Christina Nuckols at the Virginian-Pilot. Citing uncertainty about state priorities, the two consortia that submitted plans to build the $3 billion mega-project have asked the state to put the project on hold for two years.

Some legislators have said they regarded the upgrading of U.S. 460 between Suffolk and Petersburg as the highest priority for the Tidewater region. But the state lacks the funds to subsidize that project, much less the far more ambitious Third Crossing.

Tidewater Skanska and Fluor Virginia Inc. had filed unsolicited bids to build the Third Crossing in 2004. Skanska had estimated that tolls could cover the lion’s share of the cost but some $600 million to $1.2 million in state and federal dollars would be needed. Given the state’s uncertain commitment to the project, neither firm wants to spend the money to develop more detailed plans.

House Transportation Chair Leo Wardrup, R-Virginia Beach, raised the key philosophical question: “If we can’t get there with tolls, there’s something wrong with how we’re running our highway program.”

I agree. If tolls won’t cover the construction costs, I would submit, either the project is too ambitious in size and scope, or the demand does not exist to justify building it. There are two exceptions to that line of logic: Subsidies could be warranted (1) if the state regards the Third Crossing as critical to economic development, as in continued development of the ports, and/or 2) if the state regards the Third Crossing as critical for public safety, as in hurricane evacuation. In either case, I would argue, the public subsidy should come from the General Fund, where it would compete with other economic-development and public-safety priorities.

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15 responses to “The Third Crossing Is Slip Sliding Away”

  1. Anonymous Avatar

    If it is critical to public safety? If? If it is critical to the development of the ports and our economy? Just asking those questions displays either bias or stupidity, and I’ll give you credit that its bias. I agree tolls need to be part of the financial solution, and perhaps some special taxing districts to capture part of the RE tax in the immediate area, but the project has general benefit and should be funded with general transpo revenues (gas tax, etc.)

  2. James Atticus Bowden Avatar
    James Atticus Bowden

    Priorities. What a concept. Do 460 first. Then make the connection from the Port to Southside. It took the pols a long time, but good for them. Priorities are what everyone does when they don’t have taxes – free money – and the power to create more and more by saying ‘Aye’.

  3. Larry Gross Avatar
    Larry Gross

    re: “House Transportation Chair Leo Wardrip, R-Virginia Beach, raised the key philosophical question: “If we can’t get there with tolls, there’s something wrong with how we’re running our highway program.”

    I’d like to see Mrs. Wardrip ask the following question:

    “How Come .. Indiana can do this:

    In July, a private Australian-Spanish consortium took over the [Indiana Toll Road] 157-mile highway, which runs east from Chicago to the Ohio border.

    .. and

    The consortium will operate, maintain and collect tolls on the road for 75 years. In return, it gave Indiana a one-time, lump-sum payment of $3.8 billion.”

    and Virginia cannot accomplish the same thing?

    Can someone please explain why? I think .. Kaine and the GA owe taxpayers an explanation before they rush on to the tax only solution.

    Is anyone else a tad bit suspicious that we’re being led to the well that says “increased taxes are the ONLY option”?

    It would appear to be that it’s not a matter of whether tolls can pay off a road – just WHEN. On a high-traffic road.. the payoff might be fairly quick.. on a lower traffic road.. it may take a while but at some point it will be paid off.

  4. Jim Bacon Avatar

    Larry, I see that you replicated my typo in misspelling Leo Wardrup’s last name. For future reference, pPlease note that it’s Wardrup with a “u”, not an “i”. I have corrected the misspelling in the original post.

    On to your larger point, I quite agree. Indiana seems to be pulling off some major deals. How come they can and we can’t? Before assuming that the Indiana authorities are better negotiators — which they might be — we would do well to look at the fine print and see what terms and conditions are attached. Are there hidden subsidies? Is the state of Indiana assuming certain risks?

    If there are no “catches” to the Indiana road deals, we Virginians should start raising hell and asking why we can’t the private sector to build our roads, too.

  5. Toomanytaxes Avatar

    Larry, you are assuming that Virginia builds or expands roads for transportation purposes, i.e., moving people and goods from Point A to Point B. 🙂 Virginia’s transportation policies are about enabling real estate development in desired locations — with the desire coming from the developers and land speculators. 🙁

    If a toll is placed on a road, such that drivers need to pay cost-based fees, I suspect that the pricing mechanism will reduce demand, unless the demand curve is quite inelastic. Demand for what? Demand for commercial real estate. A company faced with higher rents because of an urban location that also sees many of its employees living in outlying areas might consider locating its office in one of those outlying areas if its employee base would need to pay tolls just to get to and from work. This is probably not the key factor, but it’s part of the cost-benefit analysis.

    The use of taxes, on the other hand, spreads the costs more widely. Someone, somewhere who owns land for speculation or development would prefer that taxpayers and not users pay the transportation costs. I’ve never lived in Indiana, but I suspect that that state is much less under the thumb of the real estate industry than is Virginia.

  6. Larry Gross Avatar
    Larry Gross

    sorry about misspelling Mr. Wardrup’s name. When I respond to posts, I’ll often do an exact paste even with typos.

    On the Trans Texas Tollroad:

    “By leveraging private resources, the state will increase overall competitiveness and business climate, according to the study. As a result, at the project’s maturity, TTC-35 will not only reduce congestion and improve safety, it will generate approximately $6.9 billion yearly in additional state revenue. TTC-69, a proposed Northeast Texas-to-Mexico route, offers a yearly revenue enhancement to the state of approximately $3.2 billion.”

    note the link is a .gov site.. which is “Public Roads” the March/April Issue. It’s entitled: “The Return of Private Toll Roads” and it explains why this “model” is a viable funding approach to new roads.

    It starts off this way:

    “A New Model: Long-Term Concessions

    The three highway projects cited earlier are based on a model for highway finance, management, and operation known as the toll-funded, long-term concession. Under this approach, in exchange for the right to collect tolls for a long period (typically anywhere from 30 to 99 years), a private firm or consortium will design, finance, build (or rebuild), operate, and maintain a large-scale highway project.”

    it continues(exerpts):

    “The long-term concession model appears to work well with large-scale highway, bridge, and tunnel projects for several reasons.

    First, these are precisely the kinds of projects that are the most difficult to develop using traditional highway funding.

    Second, it is megaprojects that pose the greatest risks of cost overruns, schedule slippage, and traffic shortfalls under public ownership.

    In this model, the concessionaire also does not have an incentive to cut corners on design or construction, because it will have to operate and maintain the project for the life of the concession.

    Innovation is a third reason for looking to this kind of long-term, public-private partnership. Private firms appear more willing than public agencies to take risks and “think outside the box” to solve difficult problems.”

    It appears to me that this is EXACTLY the model that HR should be looking at for it’s 3rd crossing and I’m a bit amazed that folks like Mr. Waldrup are buying the current propaganda that I suspect pro-tax and pro-VDOT folks are behind.

    I take TMTs view to heart. If true.. it means our Transportation Agency is not about solutions at all – a somber thought.

    But I’m want to hear a PPTA enterprise .. one of those now dealing with Indiana and Texas to come back and tell us that a third-crossing is not viable – AND the reason why – and if it is as TMT suggests then we’ll know.

  7. Jim Bacon Avatar

    Larry, I interpret Wardrup’s comments differently than you do. My sense is that he agrees with you (and me). He said, “If we can’t get there with tolls, there’s something wrong with how we’re running our highway program.”

    In other words… there IS something wrong with our highway program. What’s wrong with it? The very fact that no one can figure out how to build these key projects without public subsidies.

    My understanding is that Wardrup, like Howell, is a proponent of private construction of large projects. He wants to see them built. He’s frustrated that they’re not.

    (I’m happy to stand corrected if someone can indicate that Wardrup thinks differently.)

  8. Larry Gross Avatar
    Larry Gross

    Jim – it could be what you say… is correct.

    But… Mr. Wardrup’s comments as far as they go without further explanation … leave questions…

    at the least – he appears timid and non-committal, at worst, he can be misunderstood…

    I know that he is a politician.. but hey.. he is supposed to be a leader also… get out in front…

    lead, follow, or get out of the way.

    I don’t think anyone would fault him for personally advancing an agenda that would bring more answers to the table in terms of how and why – as opposed to letting it slip away… without answering basic questions…

  9. Larry Gross Avatar
    Larry Gross

    I suspect one of the reasons why Mr. Wardrup and his colleagues are “dancing” with regard to PPTA approaches is that most private enterprises are NOT going to commit to build what would be essentially a competing route that would be tolled that would have to compete against non-toll alternatives.

    It’s the same issue with I-64.

    It’s centrally tangential to I-81.

    We KNOW that there is virtually no way to build these projects without major increases in taxes.

    We KNOW that states like Texas, Indiana, Illinois, (and more) have chosen to go the PPTA route.

    But apparently the no-tax guys are perfectly willing to (in my view) NOT show LEADERSHIP in terms of putting solutions on the table.

    You can’t fault the SEnate guys and Kaine… they say “higher taxes”… and they’re running with it.

    The House guys are essentially denying that there is a problem that needs a solution.

    They think they’ll probably be thrown out of office for supporting TOLLS …

    where is their conviction and leadership if they are so opposed to the Senate approach?

    why not give people a clear choice – TOLLs or TAXES – and let the debate begin?

    All of this sneaking around at the margins does not impress ….

  10. Larry Gross Avatar
    Larry Gross

    I think what is frustrating to a lot of folks is that our leaders – the Gov, and the leadership in the House (and the Senate to a lesser extent) have not and are not articulating a clear vision on transportation.

    It is a very tough issue – granted – but there seems to be no shortage of public statements.. but empty statements.

    Lots of news-grabbing rhetoric… but way short on specifics… it comes across sounding like “well, maybe we could…”

    I note in this morning’s papers that Kaine refers to Warner as an Icon….

    There is a reason why -… People respect Warner for stepping up to the plate and confronting tough issues head on – even when it was politically risky for him. Many guys like him.. choose to stay back from the flames – and to be honest – he prioritized other issues in his term like the budget shortfall…

    Warner was perceived as being out in front – moving the issue forward.. not laying back to see what the GA did.

    Integrity is not only to be trustworthy but in my view in a political leader – it is intellectual honestly .. about tough issues that don’t have easy solutions.

    Kaine promised voters Transportation and Land Use changes. He RAN on that platform.

    So far, what he has delivered, to be polite… is a perception that he is not out front – and in fact laying back and seeing what the GA is going to do or not do…

    Strike One. (I’d rather see him swing and miss.. that get called out on strikes)

  11. Toomanytaxes Avatar

    Kaine has a real problem in that he has taken buckets of cash from West Group & its executives and seems to be carrying their water on Tysons Corner and the Silver Line. In this case, West Group doesn’t want to open rural area for development and transportation headaches. Rather, they want a big taxpayer and Dulles Toll Road user subsidy for the Silver Line that will enable the Fairfax County BoS to grant them zoning plan amendments. While West Group, other Tysons Corner landowners and their elected officials talk a good game about mixed use, TOD, etc., their proposals would add hundreds of thousands of new automobile trips in and around Tysons Corner.

    If Kaine were a true leader, he would direct VDOT to perform a traffic study on the proposed zoning changes and Plan amendments for Tysons Corner. This study, similar to what was done for Loudoun County, needs to be done. I suspect that a complete and honest study would demonstrate that the many development proposals would add so much new car traffic to Tysons Corner that we could see “gridlock” on an almost 24/7 basis. Such a finding would doom the proposals and require either their abandonment or drastic modification to eliminate much of the proposed developments’ plans for automobile access.

    I don’t think that Kaine will do the right thing on this issue. But I’d truly love to be proven wrong.

  12. Jim Bacon Avatar

    TMT, You’ve been hitting this theme pretty hard, and I have to agree with you. The Tysons rezoning plans do warrant a traffic study.

    But I’d like to see some different scenarios. I’d like to see what would happen if major developers were required to adopt meaningful Transportation Management Plans as a condition of rezoning.

  13. Toomanytaxes Avatar

    Jim, absolutely. The strong reaction that I and others have about development in Fairfax County is because of the things that the County does and does not do. I would not argue that it would be impossible to redevelop Tysons Corner in a way that would not increase, but actually decrease, traffic problems. Similarly, construction of the Silver Line, when coupled with land use changes and restrictions, could also produce some reductions in traffic.

    But I’ve lived in Fairfax County since 1987. I know what really happens. First, the County has not yet defined Transit Oriented Development, but has approved a so-called TOD at the Vienna Metro station. There is also a chance that the County will approve rezoning for Tysons I before it defines TOD.

    Fairfax County does not really develop a plan or a visision, to which builders can fit their proposals. Rather, we see the County define the plan to meet developer’s proposals.

    For a traffic/transportation management plan to work we need: 1) a VDOT traffic study; 2) all hell to break loose as we begin to contemplate what the development proposals would really do to traffic; 3) some serious discussions as to what is needed in a real TMP to bring traffic congestion down to acceptable levels. But, that won’t happen because the TMP that would be necessary to achieve meaningful results would not also meet the desires of the landowners and developers.

    Hence, the only course for the local residents is to fight on each and every issue.

    Speaking of rezoning conditions, for some reasson I found myself watching the Fairfax County Planning Commission hearing on cable tonite. I watched a discussion of how a builder wanted to amend his proffers to match what his homeowners had actually built in violation of the proffers. The rezoning of a parcel included a proffer that decks required a 15 foot setback from any lot line. For some unknown reason, the County issued permits for decks that violated the proffers. And now, the builder wants to change the proffers to permit the illegal decks.

    This is not a big case, but several of the commissioners were concerned that there’s no mechanism to track and enforce proffers, such that carefully negotitated deals are often undone. People think land will remain open space, trees will not be cut, a five-foot sidewalk will be built, lighting will not exceed certain levels, etc., only to find that none of these conditions occur or don’t occur as the case might be. The commissioners had no answer, so they deferred the application. If Fairfax County cannot ensure that deck setback requirements are maintained, how can it be expected to develop and enforce a fair and workable TMP?

    No trust in little things; no trust in big things. There’s no trust in Fairfax County government on most issues touching land use. There’s no trust that a meaningful TMP would be adopted, because a meaningful TMP would not deliver what the developer wants.

  14. Larry Gross Avatar
    Larry Gross

    I have sort of a dumb question… that perhaps TMT or Jim can answer:

    “The Richmond Redevelopment and Housing Authority has picked real estate giant Trammell Crow Residential and the nonprofit Better Housing Coalition to develop its Jackson Place site.

    The two are proposing a mixed-income, mixed-use development of commercial space and up to 240 dwellings, the housing authority said yesterday. The site, more than 5 acres, is south of Interstate 95, west of North Third Street and north of Jackson Street.”

    so I see the words “redevelopment authority” and it appears that they are calling the shots according to what the city wants and needs – and not what the developer would like.

    Why is this NOT an approach that Fairfax could take?

    Ideas? thoughts? commments?

  15. Jim Bacon Avatar

    Larry, I agree with you. Just as city governments initiate the redevelopment of decaying urban areas, county governments should initiate the redevelopment of outmoded suburban development. (With the proviso, of course, that they don’t trample on the rights of landowners with willy nilly condemnations.)

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