9 Investigates

9 Investigates revenue expected from toll lane project

By Joe Bruno, wsoctv.com
By Joe Bruno, wsoctv.com

LAKE NORMAN, N.C. — The bumper-to-bumper traffic on Interstate 77 is a common sight every day, but many people in the Lake Norman area believe that the state's solution to the problem wouldn't fix the congestion at all.

"I think once people learned about it and learned how bad it was, people rallied against it," Kurt Naas of Widen I-77 said.

Naas is in charge of the group, which is against the I-77 toll lane project. Widen I-77 has been protesting the plan since October 2012.

They believe that it is bad for the local economy, doesn't fix the congestion problem and would make it difficult for the state to widen the highway for the next 50 years.

A Public Policy Polling survey from November found that an overwhelming majority of Lake Norman residents agree with the critics.

"It is the most reviled highway project, certainly in this region, and possibly in North Carolina history," Naas said.

Despite the backlash, the developer of the project, I-77 Mobility Partners, is projected to make millions.

Channel 9 obtained a DBRS report that shows how much money the developer is expected to make.

According to C&M Associates, the revenue forecast for 2018 when the project opens is $5.1 million. But in 2019, it jumps to $24.6 million. In 2020 the forecast is $34.5 million.

If drivers don't use the toll lanes, they may end up paying for them anyway. Channel 9 has learned that NCDOT has an agreement with I-77 Mobility Partners to pay up to $12 million a year if the developer isn't making enough money for maintenance and the required debt service. According to NCDOT, the amount is capped at $75 million.

Diane Gilroy, a professor at UNC Charlotte, has been researching the failures of projects by the parent company of I-77 Mobility Partners, Cintra, and its principal company in Spain, Ferrovial.

Gilroy says controversies abroad and in the United States should be warning signs to North Carolina taxpayers.

"I think that when there is smoke, there is fire," Gilroy said. "I think it is pretty obvious we won't come near the revenue projections, and taxpayers will be on the hook."

Gilroy wrote a letter to Gov. Pat McCrory about Cintra's and Ferrovial's history. In the letter, Gilroy argued that NCDOT's contract with I-77 Mobility Partners is invalid because of "pending lawsuits, investigations and convictions against Ferrovial and its subsidiaries."

Gilroy claims that I-77 Mobility Partners didn't properly disclose ongoing investigations and previous projects that went bankrupt.

Gilroy cites several examples in her letter, including major fines imposed against Cespa, a subsidiary of Ferrorvial, and the bankruptcy of the Indiana Toll Road operated by Cintra.

The Office of the Inspector General cleared NCDOT of wrongdoing in January.

"During the various contract phases, the entities referenced in the letters of complaint made disclosures related to areas of litigation, investigation, etc., as required. OIG did not find any evidence to substantiate the cases being the basis for rendering the contract with I-77 Mobility Partners LLC as invalid," Inspector General Mary Morton said.

NCDOT and I-77 Mobility Partners declined interview requests for this story.

But in a statement, a spokesperson for the I-77 Mobility Partners said the company is going to "consider several options to build further awareness and encourage use of the new lanes."

That will be a tough sell for many, according to Naas. Widen I-77 is pushing to have the I-77 contract canceled to keep dollars in North Carolina and not Spain.

Cox Media Group

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