Testing the Limits

Tony Kinn

Tony Kinn

With 22 projects in the pipeline, Tony Kinn and his team are garnering national recognition for their work on public-private partnerships. And they’re just getting started.

by James A. Bacon

Earlier this month Infrastructure Investor, a magazine covering global transportation investment, recognized Governor Bob McDonnell as its fifth “Public Infrastructure Official of the Year.” It was the first time the publication had bequeathed the honor to an American, and the first time to a public figure who ranked less than a national transportation minister.

‘Having delivered more [public-private partnership] projects than any state in the last five years, Virginia clearly stands out as a leader in utilizing public-private partnerships to improve transportation infrastructure,” stated the magazine. “Virginia currently has 22 public-private partnerships projects in the pipeline, more than all other states combined.”

Tony Kinn, the man whom McDonnell appointed to run the Office of Transportation Public Private Partnerships (OTP3) is doing everything he can to build that project backlog. The Commonwealth has already branched out from traditional toll-backed bridge and highway projects to leasing “air rights” over state highway right-of-way and outsourcing operation of the state’s five regional traffic control centers.

Now the McDonnell administration is preparing to introduce legislation in 2014 that would enable Virginia to devise new funding structures for infrastructure projects and tap new sources of private investment capital not now available in the United States. The use of so-called “availability payments” would apply to situations in which the state has insufficient cash to build a project right now but the economic benefits are tangible and immediate.

In the meantime, expect to see more mega-projects on the scale of the Capital Beltway and Interstate 95 express lanes in Northern Virginia, the Midtown-Downtown Tunnel project in Norfolk and the U.S. 460 Connector between Petersburg and Suffolk. The state has solicited proposals for upgrading Interstate 66 in Northern Virginia and several credible groups are expected to submit ideas. Kinn wants to see if the private sector can come up with options that the Virginia Department of Transportation (VDOT) has not considered. Whoever wins that bid, look for something multimodal and vast in scope. Kinn foresees proposals for I-66 that include tolls, elevated lanes, dedicated Bus Rapid Transit lanes, even reversible lanes that run east toward Washington in the morning and west to the bedroom communities in the evening.

The overhaul of I-66 can’t come too soon. Texas Governor Rick Perry has already begun poaching Maryland for corporate investment, and the OTP3 chief is convinced that it’s just a matter of time before he hits Virginia, too. The Commonwealth must address the high cost of traffic congestion in Northern Virginia, he says. It is an economic-development imperative to get traffic moving.

Appointed in 2011, Kinn has lost no time — OTP3’s nine-man team has churned out public-private partnership deals at an extraordinary rate. A man lavish with praise for others, Kinn credits the skill and dedication of his staff and unstinting support from Governor McDonnell, Virginia Highway Administrator Greg Whirley and his boss, Transportation Secretary Sean Connaughton. Other states have tried to put together P3 deals but not all have succeeded. “You could not get this stuff done without the proactive leadership of Sean Connaughton,” Kinn says. “He is a leader’s leader.” Read more.

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13 responses to “Testing the Limits

  1. SMOOOOOCH!

  2. You need a better nut graph!

  3. most folks in Va have no clue how roads are done much less how PPTA is done. It’s totally beyond them.

    most folks cannot tell you how much they generate in gas taxes nor how much their county spends on roads – operation, maintenance and improvements.

    oh they complain a lot – but they know basically nothing…

    with the advent of repeal of the per gallon tax to a multiple of percent taxes on both fuel and sale taxes -we move even further away from any hope of understanding the financials.

    It appears that the state has basically given up on involving the public in these issues beyond the perfunctory comments at hearings.

    Most folks who show up at hearings to make comments – make the most inane and off topic comments..these days – just this side of ignorant.

    I’m not dissing people – but pointing out that the average person really does not understand how roads are done…and PPTA moves it even further into an even less understandable realm.

    Even the Smart Growth folks are reduced to questions like ” is it good?”

    Local Education is not much better. The world has gotten a lot more sophisticated in all manner of things – including finance of roads and schools and it’s getting further and further beyond the ability of the average person to readily understand.

  4. This is all madness. It will end very poorly.

  5. I think more than a few states have no adopted philosophies that encompass toll roads as a way to leverage their available revenues further.

    Toll roads won’t work anywhere and everywhere and not for surface streets but as state-level “connectors” they seem to work so the states are basically using their gas tax revenues as seed money to gin up PPTA for roads they believe can function as toll roads.

    Many states in the Northeast already have done this but now we’re seeing states like Texas, Florida, California, Illinois, even North Carolina that are including toll roads – where feasible – as part of their overall transportation planning.

    It was mentioned that Gov. Perry is poaching other states. Well Texas has been a strong leader in toll roads these days with much of Houston’s new ring roads – all toll… as well as other roads in the State.

    I think toll roads are not gong to go away. They are dealing with downward driving trends not yet fully understood between economy or millennials driving less but I would encourage anyone who thinks this is a paradigm shift to visit Northern Va any morning during peak hour to be convinced of that. We still have a crap-load of traffic and congestion even without the millennials and even in a depressed economy.

    Jim B talks about ROI but that’s a dang difficult thing to do for a free road but not near the difficult thing to do with an investor grade study for a prospective toll road.

    I believe you could use that approach for ANY road, even ones not anticipated to be toll roads – as a technique to determine it’s ROI.

    A road that would “almost” make it as a toll road would obviously have a much higher ROI than a candidate road that would never make it as a toll road.

    I’m quite sure any group that does PPTA does this right now.. internally.

  6. Right now, Terry is starting to take out measurements for the drapes in the Governor’s Mansion.

    He’s backed McDonnell’s major transportation plan. It’s his bill too now.

    I would assume that this means Terry is largely going to continue the P3 projects that we’re seeing here, generally listening to the same folks who have come up with this list of projects. But …

    Will Terry keep the same folks on board who have demonstrated the energy to get all this to work? What’s next for Connaughton?

    Transportation looks like a potentially explosive issue for Terry as Governor. He’s going to have to implement the transportation plan and owns any flaws and failures that come about over the next four years. Issues like the Bicounty Parkway are going to be handled by him, which will pit the establishment on development against the token environmentalists within the Democratic Party. How is all of this going to work out?

  7. re: ” What’s next for Connaughton?”

    I’m betting less than 1 person out of a 100 in Va “know” him but those that do know him – know he’s capable.

    so not sure he has “legs” politically for elective office except perhaps in his home area.

    I wonder what the law is for someone like him working in an organization like VDOT downstream of his appointment as an employee or consultant?

    Would not be surprised to see another state snag him….

  8. To suggest that the following projects are in any way positive, popular or good government is an absolute falsehood.
    “In the meantime, expect to see more mega-projects on the scale of the Capital Beltway and Interstate 95 express lanes in Northern Virginia, the Midtown-Downtown Tunnel project in Norfolk and the U.S. 460 Connector between Petersburg and Suffolk ….” So-called P3 projects in Tidewater that are sponsored by this governor and his minions are at best potential profit centers for their private sponsors, and at worst illegal and detrimental to the public good. Those involving tolls are in the courts, being contested by local municipalities and leaders from many sectors of the business community. Opponents include people who are card-carrying Republicans–those who do not stand to gain from the Gov. McDonnell largess of appointments and payoffs. To vote this governor “Public Infrastructure Official of the Year” is laughable; exceeded in hilarity only by one or two mayors who have written op-eds praising McDonnell’s tenure. It’s awfully easy to pat on the back even a weak politician as he heads out the door, hoping to escape a federal indictment.

    • I would much rather see tolls on these projects than funding from tax dollars. Tolling forces the projects to be economically rational in order to sell bonds. And users pay. It’s much better than being forced to pay taxes to build roads and other infrastructure designed to enrich land speculators. I respectfully disagree.

      • All across Val – BECAUSE we do not have a transparent process for transportation funding – whether you live in Hampton Roads, or Northern Va or Roanoke or Lynchburg or Fredericksburg – the prevailing belief is that your regional problems deserve priority funding compared to other regions AND that in each region – they’re pretty sure the other regions are getting more money at other regions expense.

        A GOOD investigative reporter could unearth the larger truth if they were so inclined but right now – today – not one person in thousands could, for instance, tell you how much Hampton Road or Northern Vak spends on maintenance for roads. Even fewer understand that operations is also a cost. Every traffic signal has to have bulbs replaced, controllers adjusted and electricity paid for.

        Everytime a policeman is directing traffic or VDOT workers putting up barricades and mowing grasss.. plowing roads.. there are SIGNIFICANT operational costs –

        and how many people know these costs for their area?

        how many people know how much their region generates in fuel taxes?

        tolls are the best way for people to appreciate these costs. Each time they pay a toll – they are reminded that there is a real cost to operating and maintaining a road whereas with the gas tax approach – most everyone thinks roads have no cost to operate and that all the gas taxes go for new infrastructure and they’re pretty sure their region is getting “shorted”.

  9. the sentiment from wesghent is not uncommon across Virginia.

    I’m not sure though how much of it is opposition to tolls and how much is opposition to the private sector building roads and collecting tolls.

    In other words – is there any support for the State collecting tolls and paying back the private sector that built the infrastructure?

    Is the problem a simple as putting VDOT signs on the tolling gantries?

    VDOT does, by the way, own the infrastructure in all cases and the infrastructure reverts to the state in case of default but the state also has the option of taking over once the contract period ends.

    Virginia, this Governor, VDOT, AND the General Assembly – all 3 have decided to go the PPTA route for infrastructure.

    if we have to change the word “toll” to “usage fee” to satisfy the courts… they’ll do that but I don’t think a court is going to find that people cannot be charged a fee for using infrastructure; we do that right now for water/sewer, the CBBT, and the Powhite Parkway, Dulles Greenway, etc.

    so is the problem the change from free roads to toll roads? or is it the fact that the toll roads are PPTA?

    I’m not sure it makes a lot of difference at this point because we have already built more toll roads and the opposition is a little bit OBE.

  10. construction for dummies

    Sean has been a disaster and glad he is gone. He should land a job at a nice car wash. I would not recommend him for any transportation jobs. If his lips are moving you know he is lying. If anyone would hire him as a transportation guy they would need to have a brain scan to make sure they are functioning on all cylinders. Disaster.

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