DALLAS — Virginia Governor-elect Terry McAuliffe is skeptical about going ahead with a $1.4 billion toll road in southwest Virginia until the project receives final environmental approval from the U.S. Army Corps of Engineers.
The 55-mile Commonwealth Connector, which would parallel U.S. Route 460, is being funded in part with $232 million of tax-exempt private activity revenue bonds that were sold in December 2012 by the Route 460 Funding Corp. of Virginia. The nonprofit funding corporation also is authorized to issue $62 million of capital appreciation bonds.
The funding corporation's revenue bonds are rated Baa3 by Moody's Investors Service and BBB-minus by Standard & Poor's.
The environmental review has not been completed by the Corps of Engineers, which said the state is proceeding at its own risk until the process is finished.
McAuliffe said he was reluctant to move forward on the project until the state is 100% certain that the federal environmental review will be favorable.
"I'm not a big believer in spending money until we know for sure we can spend that money efficiently and smartly," McAuliffe told the Virginia-Pilot newspaper. "I'm going to take a hard look." he said.
The Virginia Department of Transportation initially estimated the construction project would affect 129 acres of wetlands, but its latest estimate raises that impact to 480 acres. The terrain includes pine flats and river swamps filled with cypress and tupelo trees.
The Southern Environmental Law Center has asked the Federal Highway Administration to halt work on the project until the Corps of Engineers review is completed.
"Given the unprecedented magnitude of wetlands impacts now expected to result from the new Route 460, we believe this proposal warrants serious reconsideration," the environmental group said.
McAuliffe, a Democrat, said he is not convinced of the need for the Route 460 project, which was strongly backed by his predecessor Gov. Bob McDonnell as a benefit to the state's seaports.
The toll road may be beneficial, McAuliffe said, but he questioned if it is the "smartest, best use of our money?"
"I'm not prepared to say that today," he told the newspaper. "We do not have unlimited amounts of money."
VDOT will contribute between $753 million and $930 million to the project, depending on whether the state can obtain a low-interest federal loan. The Virginia Port Authority will contribute between $200 million and $250 million to the project.
The state had hoped to build the toll road with a public-private partnership and fund it mostly with toll revenue bonds, but instead created the Route 460 Funding Corp. as a nonprofit that will collect the tolls, issue tax-exempt bonds, and operate the highway.