WASHINGTON — The group of motorists who lost their challenge to the Elizabeth River Tunnels public-private partnership in the Virginia Supreme Court is asking the court to rehear the case, as the Commonwealth’s governor-elect suggests he is interested in working to lower the planned toll rates for the tunnels.
The high court issued a ruling on Oct. 31 siding against the motorists and with the Virginia Department of Transportation and the private partner, Elizabeth River Crossings OPCO, LLC. The decision stated that the tolls for the project were user fees and not unconstitutional taxes, as a lower-court judge had found.
The Elizabeth River project is designed to ease congestion in the Hampton Roads area of Virginia. It includes construction of a new tube for the midtown tunnel between Portsmouth and Norfolk, improvements to the existing tube of the midtown tunnel and the nearby downtown tunnel, and the creation of a freeway connection that links the access routes to the tunnels. The new tunnel is expected to be completed in July 2016.
The project is estimated to cost a total of about $2.04 billion. Financing for it includes $272 million in equity from ERC; about $420 million from VDOT; $664 million in private-activity bonds from the Virginia Small Business Finance Authority; and a $422 million federal loan under the Transportation Infrastructure Finance and Innovation Act. Debt is to be repaid, and ERC is expected to get a return on its investment, through revenue from tolls on the midtown and downtown tunnels as well as the freeway connection. Tolling is to begin in February 2014. The tolls for light vehicles using the tunnels are planned to be $1.59 during off-peak hours and $1.84 during peak hours.
The motorists filed a notice on Friday that they intend to file a petition for the case to be reheard. That petition must be filed within 30 days of the state supreme court’s ruling, said Patrick McSweeney, a lawyer representing the motorists. He added that he is still working on figuring out what reasons the motorists will give for requesting the case to be reheard.
McSweeney couldn’t say if the court would grant the petition, but George Somerville, a lawyer with Troutman Sanders LLP who represented Virginia in the case, thought it would be unlikely for the court to grant a rehearing.
The state high court’s ruling that tolls in the Elizabeth River project are not taxes was unanimous. Somerville said that 32 states have P3 acts that authorize the use of tolls to pay off bonds issued for transportation, and that the court’s decision, along with a ruling from the Massachusetts Supreme Court “will be a deterrent” for lawsuits in other states.
In his post-election press conference last week, Virginia Gov.-elect Terry McAuliffe, a Democrat, said he supports the state supreme court’s decision but thinks the toll rates will be too high.
“I have supported tolls, but I do not support exorbitant tolls,” McAuliffe told reporters. “And I support the Supreme Court in its decision. We need to make sure that we can do public-private partnerships, but as it relates to the specifics and how much they charge, I think once I am in office, we’ve gone through our transition process, we will make a decision. .... I think we need to sit down, I like win-win situations, and we will re-look at that as it relates to the cost of the tolls, specifically as it relates to the folks in Portsmouth. They are exorbitantly high.”
A spokesman for McAuliffe’s campaign suggested to The Virginian-Pilot that revenue generated as the result of the transportation legislation passed last year could be used to lower the tolls. If the General Assembly agrees, more money relating to the project could come from the state and less could come from tolls. Lowering the toll rates would also require making a change in the agreement between VDOT and ERC, Somerville said.
“It would be a complex transaction,” he said.
