Could state roads bond solve I-77 contract buyout for north Mecklenburg?

The solution for revamping a much-criticized 50-year contract for new toll lanes on Interstate 77 could be solved by including money for a contract buyout as part of a possible state roads bond, according to accounts of recent negotiations provided by local and state politicians. 

Talks about such a solution gained momentum in Raleigh this week, though everyone who described the scenario to CBJemphasized the talks are in the early stages.

Elected officials, politicians and business leaders opposed to terms of the contract between I-77 Mobility Partners and the North Carolina transportation department have spent several years imploring the state to cancel the existing agreement and pay a penalty to reclaim control of the project. I-77 Mobility Partners, an offshoot of Madrid infrastructure firm Cintra, signed a contract with the state in 2014 assuming responsibility to add toll lanes as part of a 26-mile, $650 million project. The additional lanes are scheduled to open at the end of this year.

Cintra and I-77 Mobility Partners, under the current terms, would operate the lanes and set toll rates for 50 years, collecting the revenue to repay the construction debt. Critics contend the terms are too generous and too expansive and they also warn the project as conceived won’t relieve traffic congestion unless one of the additional lanes on each side of the route is left open to all drivers at no charge.

Estimates of buyout costs vary widely, from $200 million to $1 billion. The additional lanes start just north of uptown Charlotte and go through Lake Norman into Mooresville and Iredell County. For the portion of the route from uptown to the lake, two toll lanes are being added, tapering to one lane in each direction where the interstate crosses the lake and extends into Mooresville.

A transportation department spokesperson did not respond to CBJ’s requests for confirmation of the talks. This week, Lake Norman businessman John Hettwer, Mecklenburg County commissioner Jim Puckett, state Sen. Jeff Tarte (R-Mecklenburg), members of the senate transportation committee, transportation secretary Jim Trogdon and Ken Eudy, an adviser to Gov. Roy Cooper, met in Raleigh to discuss options for revamping the toll lanes.

“All things are on the table,” Hettwer told me. “I think everybody knows that something’s got to change. I’m very optimistic — it’s when, not if.”

Opponents of the existing deal, taking cues from a state-appointed I-77 Advisory Group, told me they like the idea of including a contract buyout or a portion of the buyout in a state roads bond package. People in the meeting who spoke to CBJsaid lawmakers could consider a package totaling $2.5 billion to $3 billion that would include a range of upgrades across North Carolina.

Two years ago, voters approved $2 billion worth of infrastructure projects, known as Connect NC. Then-Gov. Pat McCrory originally pitched Connect NC as a $3 billion combination of new buildings and other additions at colleges and other state-owned properties with $1.2 billion of the total dedicated to roads. Lawmakers stripped the road and transportation projects from the proposal in 2015 before it appeared on the ballot the following spring.

“The Lake Norman business community is in near-constant contact with the governor’s office and House and Senate leadership,” Puckett, the Republican commissioner whose district includes north Mecklenburg, told me. “We are encouraged by the willingness of all bodies to find a solution to this process.”

I-77 Mobility Partners spokesperson Jean Leier told me Friday the company is unable to “speculate on costs associated with any potential contract changes.”

For now, Leier said, “I-77 Mobility Partners is committed to being a good partner with NCDOT. We remain focused on construction progress and preparing to open the express lanes in late-2018.”

Optimism offered by Puckett and other allies stands in contrast to concerns raised over budget provisions described by toll lane critics, including state Rep. Chaz Beasley (D-Mecklenburg), earlier this week. Those concerns stemmed from language in the new budget stipulating a two-month waiting notification period for the legislature if Cooper or Trogdon make changes to the toll lane contract and requiring the legislature to approve any money needed for revisions to the agreement. 

A spokesman for Cooper this week told CBJ, “Republicans in the legislature are clearly protecting this bad I-77 tolling contract that the governor and his department of transportation are trying to fix. They should listen (to) families and local leaders who have expressed opposition instead of doing the bidding of special interests.”

On Wednesday an NCDOT spokesperson, Carly Olexik, said the department is “reviewing the legislation and following the legislative process.” 

The spokesperson also said Trogdon, the department secretary, plans to meet with the I-77 Advisory Group later this summer to further explore possible changes to the contract. Olexik, the NCDOT spokesperson, told CBJ on Friday that Trogdon did meet with lawmakers and Mecklenburg stakeholders this week and said the department remains committed “to a process that looks at all options.”

Olexic did not disclose specific aspects of the discussions that could lead to changes in the existing agreement.

“I will push adamantly for a component of the highway bond to help 77,” state Sen. Tarte said. “77’s got to be part of it.”

Tarte, a three-term senator, faces what is expected to be a tight race this fall against Natasha Marcus, co-founder and past chair of the Democrats of North Mecklenburg.

Kurt Naas, founder of grassroots group Widen I-77 and a Cornelius town commissioner, embraced the possibility of using bond money to buy out the private firm once construction is completed.

“I think it would be wonderful,” Naas told me. “It gives us the money (to buy out the contract).”

No one expects any changes to the current agreement before the end of the summer, at the earliest. Some of the loudest concerns stem from heavy trucks not being able to use the new lanes because of the construction specifications used by I-77 Mobility Partners. 

Tarte, Puckett and others vowed to find solutions to ensure that freight shipments aren’t encumbered by the expansion project — a prospect that could hurt regional businesses in numerous ways.

How those potential problems will be fixed, and when, have yet to be hashed out.

Bill Russell, president at the Lake Norman Chamber of Commerce, an ardent critic of the current contract, said his organization and others are comfortable having Cintra and I-77 finish building the new lanes and then handing off management to the state. They are also willing to have one lane on each side be a toll lane, with the money collected helping pay for the Cintra buyout if needed.

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Written by Erik Spanberg, the Charlotte Business Journal. Article available at https://www.bizjournals.com/charlotte/news/2018/06/01/could-state-roads-bond-solve-i-77-contract-buyout.html