BRADENTON, Fla. - Work on North Carolina's $648 million Interstate 77 express toll lane project will begin this summer with a lawsuit pending and recent objections filed by some communities.
The North Carolina Department of Transportation announced the construction schedule on Wednesday after closing on $100 million of private-activity bonds and finalizing the public private partnership agreement with concessionaire I-77 Mobility Partners.
In addition to the bonds, the project is also being financed with a $189 million subordinated loan through the Transportation Infrastructure Finance and Innovation Act, a $91.4 million contribution from NCDOT, and $249.8 million in equity from I-77 Mobility sponsors Cintra Infraestructuras S.A. and Aberdeen Global Infrastructure II LLP.
The long-planned project will add 26 miles of tolled managed lanes north of the Charlotte area to relieve congestion, though an anti-toll group opposes it and communities along the route recently raised questions about the state's contract.
While freeways will remain available to travelers, the I-77 project "does potentially face some political risk" given the lack of tolled facilities in the region, Fitch Ratings said Wednesday while confirming its BBB-minus ratings on the bonds and TIFIA loan.
The bonds are also rated BBB by Toronto-based DBRS Ltd.
On Tuesday, commissioners in Mecklenburg County - which includes Charlotte - passed a resolution asking the state to delay finalizing the P3 for 90 days after questioning contract terms, including a provision that requires NCDOT to compensate the developer if future interstate improvements decrease toll revenues along the managed lane corridor.
Five other communities also passed resolutions recently questioning the project and asking for the state to delay final approval.
The anti-toll group Widen I-77, which initiated legal action against the project earlier this year, said the state's final action on the P3 contract was "disappointing but not unexpected news."
"Throughout this process, NCDOT has shown they are willing to do anything to push this project through," organization spokesman Kurt Naas said in a statement.
Widen I-77, which prefers that free lanes be added to the Interstate, said the lawsuit it filed in January is expected to go to trial in August.
NCDOT said canceling the project would have cost the state more than $100 million.
"Canceling the I-77 contract any time after June 26, 2014 would have cost the state $22 million [and today damages for canceling would potentially exceed $100 million," agency officials said.
In addition to those costs, NCDOT said building free lanes would cost the Charlotte region nearly $200 million for other regional road projects that are tied to a 2013 strategic mobility formula that prioritizes state transportation funding.
The express lane project is expected to be completed in 2018, and will offer drivers a choice of paying toll that guarantees reliable travel time or remaining in general purpose lanes for free, the NDCOT said.
"Cintra is committed to working with state and local leaders to ensure economic development opportunities and safe, reliable, efficient transportation solutions for residents of this fast growing region," Cintra U.S. president Nicolas Rubio said in a release. "The I-77 project will help reduce roadway congestion and will provide more driver choice, ultimately resulting in travelers spending less time stuck in traffic."