Is new Rt. 460 a Financing Folly?

It’s a rare sight to see trucks and cars in traffic on Route 460, their engines idling, their gas gauge plummeting as they wait for the bottleneck to clear.

It’s not so rare a sight to see travelers between the Peninsula and the south side of Tidewater waiting in a 3 to 6 mile backup – sometimes to the Granby Street exit – at the Hampton Roads Bridge Tunnel.

So instead of investing in highways and bridges to break the obvious bottlenecks in the region state officials have decided to finance a 55-mile, four lane highway between Suffolk and Petersburg at a cost of $1.5 billion.

The state (read the public) will bear close to 80 percent of the cost. The remainder will be financed by bond proceeds.

The highway, to be completed by 2018, will cost $1.47 billion. The remainder -- $313 million – will be financed initially by bond proceeds, and the debt service will be paid by tolls.

U.S. 460 Mobility Partners, a joint venture between Spanish conglomerate Ferrovial Agromar SA and American Infrastructure Inc. based in Pennsylvania, will design and build the new route bypassing old Route 460, which winds through small towns. 

Route 460 Funding Corporation, a non-profit, non-stock corporation set up by the state, will have oversight of the new highway.

Its board is peopled with state and Commonwealth Transportation officials.

The bonds in two series are supposed to hit the market today.

In 558 pages, the bond document highlights in excruciating detail all the financial and organizational minutiae of this deal.

State officials insist these deals are transparent.

No, they aren’t.

They are packed with legalese, government speak and financial jargon.

Besides, who has the time or inclination to read 558 pages and decide if this is a benefit to the public?

It may be a benefit to buyers, who are panicking about the possibility of higher taxes before the end of the year if Congress doesn’t reach a deal on the fiscal cliff.

But is this deal an example of good government or an example of government catering to special interests?

To build the new Route 460 with double digit tolls, someone – either the state or the contractor – will have to buy 430 properties -- maybe your property. 

 This is how the document explained the acquisition.

“Ninety percent are not complex and can be obtained with little risk. The remaining 10 percent may require relocation packages to be negotiated.”

That’s clear.

And if you are bound to stay on your little strip of land and block progress, keep this in mind as you attempt to fend off government predators.   

“Pursuant to Virginia law, the Virginia Department of Transportation may obtain title, in the name of the Commonwealth, to properties, subject to eventual determinant of the condemnation price, in an expedited “quick take” proceeding.

In other words, get a lawyer.