RICHMOND — Robert F. McDonnell’s pet road project always had its naysayers, people who thought a new $1.4 billion highway along 55 lightly traveled miles in southeastern Virginia was unnecessary.
The Republican had been pushing for a new U.S. 460 since he was a delegate representing Virginia Beach, saying that it would provide the region with an additional hurricane evacuation route and boost the economy. As governor in late 2012, McDonnell finally had the muscle to get it rolling — tapping state and federal funds, issuing new bonds, getting the Port Authority Board to contribute.
Since then, $250 million has been spent on the highway — without an inch of pavement to show for it. Even basic environmental permits have not been secured.
The administration of Gov. Terry McAuliffe (D) announced last week that it was suspending work while it conducts an environmental review of the project, which would destroy about 480 acres of wetlands and needs approval from the U.S. Army Corps of Engineers. The suspension is expected to last at least a year.
“We’re still moving forward with the project,” Transportation Secretary Aubrey Layne said in an interview Monday. “We’re just suspending everything until we get our permits in hand.”
Some longtime opponents of the project saw the move as a sign that McAuliffe will ultimately kill it. But McAuliffe spokesman Brian Coy emphasized that the project is not dead, though it will be subject to a complete review.
The move has drawn renewed attention and criticism to the proposed highway, a toll road that would parallel the existing U.S. 460, a four-lane road with stoplights.
Del. R. Chris Jones (R-Suffolk), chairman of the House Appropriations Committee, said he was “speechless” when he learned from Layne that the private contractor hired for the job had been paid $20 million a month for a year to work on a project that still lacked permits.
“They’ve received $20 million per month and received over $250 million, and the first shovel of dirt has not been turned, no right-of-way acquisition and without any permits in hand,” Jones said. “I understand the monthly payments were going to increase substantially in January.”
Trip Pollard, a senior attorney with the Southern Environmental Law Center, praised the administration for suspending work on what he called a “$1.4 billion boondoggle.”
“SELC has long opposed this destructive and wasteful project, which would destroy more wetlands than any other project in Virginia since the Clean Water Act was enacted in 1972, yet provide little traffic benefit given how few vehicles currently travel the Route 460 corridor,” he said in a written statement.
McDonnell’s transportation chief, Sean T. Connaughton, said Monday in an e-mail that there was “no problem with the structure of the contract.”
“Preliminary studies show around 400 acres impacted over a 55-mile corridor, which is fairly small given the size and scope of the project,” he said. “The current Administration needs to complete the supplemental study, design a wetlands mitigation and avoidance strategy, get the Army Corps permit, and build the road. It’s that simple.”
The private contractors in charge of the project are Ferrovial Agroman and American Infrastructure, operating as the consortium 460 Mobility Partners. No one responded to a request for comment at 460 Mobility Partners’ Suffolk offices Monday.
The company is not obligated to return the $250 million if the commonwealth decides to end the project, Layne said. If the contract is terminated, the company could say that it is due more money, but Layne said the amount is not likely to be “significant.” He said there could be “some exposure” related to bonds issued for the project, but he did not know what that might cost the commonwealth.
The highway would run between Petersburg and Suffolk, parallel to the existing U.S. 460, where average volume ranges from 9,200 to 17,000 vehicles a day. The state estimates that the new highway, a toll road that would not replace the existing toll-free route, would initially carry 5,000 to 6,000 cars and trucks a day.
The low traffic projections led to objections when McDonnell signed the deal — something he did without the General Assembly’s approval. Senate Majority Leader Richard L. Saslaw (D-Fairfax) noted at the time that the Dulles Toll Road carries about 100,000 vehicles a day.
The low projections also made the project a tough sell to developers, particularly since McDonnell initially tried to get it built at little or no cost to the state. Twice, the state put the project out to bid, hoping companies would build it in exchange for the toll revenue. But the state got no takers, with contractors saying traffic would be too light to produce a profit.
The state restructured the deal before putting it out to bid a third time, so that the contract would be paid outright to design and build the road. The Port Authority Board agreed to provide $250 million toward the cost — a commitment made after McDonnell replaced 10 of its 12 members in July 2011. At the time, the board’s ousted chairman, John G. Milliken, said McDonnell had cleaned house in part to smooth the way for the road.
Connaughton disputed that account at the time. He said McDonnell made the changes because the port had been underperforming.
The Port Authority money was to be combined with $930 million in state and federal transportation bond money. An additional $216 million was to come from the sale of bonds through a nonprofit public-private partnership created for the project.
The state also has set aside $80 million from the Virginia Transportation Infrastructure Bank as a “credit backstop” in case toll revenue is less than projected.