So, I was digging into the economic and financial assumptions of the U.S. 460 Connector project, and I was reading the public-private partnership proposal put forth by 460 Partners, a consortium led by Richmond-based Moreland Property Group that includes infrastructure giants like Skanska USA and Lane Construction Corp…
Like the proposals advanced by two competing groups, 460 Partners states that there is no way to charge enough tolls to pay for the estimated $1.8 billion project. But unlike the others, 460 Partners asks for no direct public subsidy (other than $52 million for pre-development expenses and right-of-way acquisition that would be repaid).
Instead, the group proposed creating a regional economic development authority to coordinate marketing efforts under the brand of “Virginia’s Gateway Corridor,” which would carry with it a set of incentives “specifically targeted towards manufacturing, exports and warehouse and distribution type companies.” That marketing group would promote industrial and logistics development along the U.S. 460 corridor. And the expense of the highway project not covered by tolls would be recouped by “receiving a portion of the economic benefits created within the Virginia’s Gateway Corridor area,” based on metrics such as jobs created, sales tax revenue or capital investment.
Where had I heard those ideas before? Oh, yes! The McDonnell administration attempted to craft legislation that would embody both ideas, or, at least, variants of both ideas — both of which I had already blogged about.
Instead of creating “Virginia’s Gateway Corridor,” HB 1183 would create the Route 460 Corridor Interstate 86 Connector Economic Development Zone.” And, as originally submitted, it would have provided up to $50 million tax credits over two years to companies involved in maritime commerce or the import/export of manufacturing products. An amended version version of the bill has passed both the state Senate and the House of Delegates.
The governor’s omnibus transportation bill also provided for the creation of Transportation Improvement Districts (TID) consisting of territory within a five-mile radius of a transportation infrastructure project. Twenty-five percent of any growth in state General Fund tax revenues would have been transferred to TID funds, and the Commonwealth Transportation Board could allocate the money to projects in its Six-Year Improvement Program — including, presumably, the project that accounted for the revenue growth. That’s pretty close to what 460 Partners had in mind. However, the provision did not make it into the final version of the bill passed by the House and Senate.
Coincidence or not? I spoke to Brad Rodgers, president of 460 Partners, to find out. His consortium wasn’t involved with the drafting of the legislation, he said, but “I’d like to think [the legislation] was inspired by our proposal. The concept [for Virginia’s Gateway Corridor] was almost verbatim what we laid out.”
Rodgers did not speculate how the defeat of the Transportation Improvement District idea would affect the chances that the 460 Partners proposal would be selected. Nor did he know when the McDonnell administration would make its decision. The project time line has been delayed, he said, due to the “hullabaloo” over the Midtown-Downtown Tunnel project in which Hampton Roads politicians are demanding the state contribute more to the project to buy down toll rates there. He suspects that administration officials are looking for “more clarity” before moving on to the U.S. 460 project.
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