Road Worrier: NCDOT's urban loops depend on borrowed money

Gov. Pat McCrory broke ground on Winston-Salem’s long-delayed I-74 Northern Beltway last week in a shiny-shovels ceremony made possible, his office said, by the Urban Loop Acceleration Plan.

The What Plan? Around North Carolina, “urban loop acceleration” is a self-contradictory expression – like jumbo shrimp.

State leaders gave up on a 1989 commitment to construct freeway rings around all our larger cities. The list of promised loops grew faster than the collection of tax dollars to build them.

Under McCrory’s “data-driven” Strategic Transportation Investments law – which will guide spending priorities in a 10-year construction plan to be released soon – loop jobs compete for dollars with road widenings and other needs. That’s fair, but it won’t be fast.

The governor and the state Department of Transportation want to find ways to build more urban loops. McCrory recently expanded the acceleration options to include three flavors of borrowed money. We’ll call them toll bonds, GARVEE bonds and – thanks to a blackout on details – McCrory’s mystery bonds.

Lyndo Tippett hatched the first acceleration plan 10 years ago in Wake County. It was a brutally simple pitch: Make your loop a toll road – or forget it.

Tippett was DOT secretary under former Gov. Mike Easley. In 2004, citing a dearth of tax dollars, he postponed construction on a long-awaited leg of the 540 Outer Loop in fast-growing western Wake.

The unwelcome news put local elected leaders over a barrel – in a posture that made them more receptive to Lyndo’s gentle ultimatum. They consented. The state borrowed $1 billion and built the 18-mile Triangle Expressway. To repay the loan, TriEx drivers will pay tolls until about 2049.

Toll financing has bogged down elsewhere. The bridges and expressways in DOT toll plans are hobbled with environmental problems. These projects have less support from drivers and politicians than Tippett generated for TriEx in Wake County.

In Charlotte, tolls will finance an innovative but unpopular project to add lanes to Interstate 77. And DOT says the rest of Wake’s 540 loop – delayed now with its own environmental hurdles – also will depend on tolls. But as the state creeps ahead with loop projects in other cities, it’s not clear why tolls aren’t among the options elsewhere.

McCrory wants to borrow two other kinds of money for Winston-Salem’s loop. His press office credited “NCDOT’s Urban Loop Acceleration Plan” with getting the Beltway bulldozers rolling. But the news release included a link to a DOT web page that made no mention of loops, acceleration or anything urban.

After a bit of virtual archaeology, DOT officials unearthed a one-page document on loop acceleration dating from the Pre-McCrory Era. Way back in 2011, former Gov. Bev Perdue decreed that DOT would use a new kind of money called GARVEE bonds to accelerate unfinished loops in six cities.

GARVEEs let DOT borrow money to be repaid from future federal highway grants. DOT is using GARVEE financing to speed construction on loop segments in Winston-Salem and Greensboro, and on other roads.

Kick-starter bonds

Winston-Salem also would benefit from another kind of borrowing McCrory proposed in September: $1 billion in bonds to “kick start” projects that have languished for years. Many items on his draft project list are low-priority roads that scored near the bottom in his “data-driven” rating system. Most are rural roads, but the governor’s bonds also would accelerate the completion of Winston-Salem’s urban loop.

Questioned by reporters, McCrory acknowledged that the delay has hurt scores of families blocked by DOT from developing property in the Beltway’s path. (The same problem has hobbled property owners in southern Wake County who have been waiting since 1996 for DOT to buy their land for the 540 Outer Loop.)

“That’s another reason to move with the billion-dollar bonds, so we can get going with some of these projects,” McCrory said in Winston-Salem. “Not only in this region but in other regions of the state, where the delay has been far too expensive and time-consuming, and it has impacted people.”

It’s not clear how the bond issue would work or how the projects were chosen. On Sept. 18, The News & Observer requested public records related to the bond proposal. Two months later, neither DOT nor McCrory has provided any of the requested information.

This story was originally published November 17, 2014 at 5:41 PM with the headline "Road Worrier: NCDOT's urban loops depend on borrowed money."