Politics & Government

N.C. House passes bill to cancel I-77 toll contract

Traffic heads north on Interstate 77 amid construction on the controversial toll lane project.
Traffic heads north on Interstate 77 amid construction on the controversial toll lane project. jsimmons@charlotteobserver.com

Efforts to stop the Interstate 77 toll project got new life Thursday when the N.C. House overwhelmingly passed a bill to cancel the contract with a private developer.

Lawmakers approved the bill 81-27 with strong bipartisan support. Though Senate passage is far from assured, supporters were encouraged by the 3-1 margin.

“That should send a loud message to Gov. Pat McCrory that this is a bad project for our communities, for our commerce and for our citizens,” said Bill Russell, president of the Lake Norman Chamber of Commerce.

Pushing the bill were its sponsors, Republican Reps. Charles Jeter of Huntersville and John Bradford of Cornelius. Jeter told colleagues the problem isn’t tolls but the 50-year contract with I-77 Mobility Partners, a subsidiary of the Spanish firm Cintra.

“This wasn’t about managed lanes or tolls, this is about a bad contract,” he said later. “What you saw today was a vast cross section of legislators supporting the legislation. And I think what that shows is … the contract is fundamentally flawed.”

The tolls have become a hot potato in the race for governor and other contests. Last fall, support for the project cost some north Mecklenburg officials their seats. On Thursday, Democratic Rep. Tricia Cotham of Matthews, who has made the contract an issue in her 12th Congressional District race, rose to denounce the contract before voting for the measure.

Work began last November on the $660 million project that would add toll lanes alongside existing free lanes between Charlotte and Mooresville. It’s scheduled to be finished in 2018.

Critics say the design of the project’s entrance and exit ramps would hurt local businesses while the contract would make it all but impossible for the state to add any additional free lanes for 50 years.

Passage of the House bill comes a day after Transportation Secretary Nick Tennyson told one committee that canceling the contract could cost up to $250 million in penalties and limit funding for other projects in the region and state.

A DOT spokesman declined to comment on the House vote. Spokesmen for Cintra and I-77 Mobility Partners could not be reached.

Jeter said any penalty would be offset with a so-called bonus allocation of around $148 million that DOT has promised for other local projects. The bill also calls for “suspending” eight other local projects, including the widening of N.C. 73 and U.S. 21, if more money was needed for any penalty.

Until now, efforts to stop the project never got far despite heavy lobbying by north Mecklenburg residents and businesses. A bill by Sen. Jeff Tarte never got out of committee.

Tarte said he’s more optimistic given the House vote. He said more lawmakers are becoming aware of Cintra’s problems elsewhere.

In March, a Texas subsidiary filed for Chapter 11 protection after failing to restructure about $1.3 billion in debt. The company, SH 130 Concession Co., was building a 41-mile toll road between Austin and San Antonio. In 2014 a subsidiary that managed the Indiana Toll Road filed for bankruptcy protection, listing $6 billion in debt.

“Part of it’s timing … continuing to learn more,” Tarte said. “We’ve seen other projects fail financially.”

Despite opposition from area residents and business groups, earlier efforts to stop the project ran into dead ends. In January, the Charlotte Regional Transportation Planning Organization voted to endorse the project over the objections of several local governments.

But the new push still faces resistance.

Among those voting against the bill were the co-chairs of the House Transportation Committee including Republican Rep. John Torbett of Gaston County. He argued the I-77 project saves the state money by having private interests subsidize the cost.

“I’m getting a project for half the cost taxpayers would have to pay for it,” Torbett said. “That’s quite a bargain.”

Tarte said the Senate would have to pass the bill before its expected adjournment at the end of the month in order to cancel the contract this year.

“At least it became obvious to one chamber that it needs to be terminated,” he said. “And we hope to make it just as obvious in the other chamber.”

Jim Morrill: 704-358-5059, @jimmorrill