12 Investigates: Creditors take over Pocahontas Parkway
CHESTERFIELD, VA (WWBT) - The tolls are high, and hardly anyone uses it. We're talking about the Pocahontas Parkway.
Just 10 years ago, investors saw that road as a goldmine, ripe for growth. They cut a ground-breaking deal with the state, spent hundreds of millions.
Now the road is in the hands of creditors - a colossal failure.
8.8 miles of open road... Route 895 was meant to be the big connector between Chesterfield and Henrico County.
It averages around 14,000 vehicles each day. Sounds like a lot, until you know that the Huguenot Bridge - which is a tenth of its size - has 25,000 vehicles crossing every day.
And then there's the toll. $3.25 each way at peak hours. It will jump to $4 in just two years.
Australian company Transurban took over in 2006, hoping to turn the Pocahontas Parkway around. Instead, they are turning the road over to European creditors.
State Secretary of Transportation Sean Connaughton argues it's a failure to private business, but not for Virginians.
"We still got our road," said Connaughton. "We got a road that will continue to exist and will continue to operate and continue to serve the people, and we lost no public money on it."
That's because this was the very first public/private partnership in Virginia. Investors saw opportunity, spending more than $300 million.
There was supposed to be several thousand new homes built here, millions of square feet in development, but after the great recession, the reality is empty lots still for sale.
"It's never come close to handling the traffic that was projected," said Trip Pollard.
Pollard is a senior attorney with the Southern Environmental Law Center, a non profit with a goal of protecting the environment.
"It was never that high a priority project for the region," said Pollard. "That's been a problem, not only with this project, but with this act in general. Sometimes it's advanced projects to the front of the line that aren't always the most important."
Senator Mark Warner was governor when Transurban took over and refinanced the Pocahontas. He says this failure just shows the projects have to be based on solid needs.
"You've got to have a business case," said Warner. "The end of my term as governor, somebody came and wanted to buy the Dulles toll road from us. It had a billion dollar price tag. A lot of legislatures got all excited. It was a stupid deal."
Since the Pocahontas, four more roads have been completed using private investors and seven more multi million dollar projects are underway.
Investors have watched the failure of the Pocahontas closely, learning to restructure the new deals so the state pays more money.
"The private sector took on most of the risk," said Pollard. "That is not true for most of the projects since then, so actually, with other projects, the taxpayer is at great risk."
"We are essentially putting in about 20 to 30 percent of these projects, and the private sector is putting in the rest," said Connaughton.
Transurban said the fact that European banks will control the Pocahontas will not change the toll fee schedule or mean the road is in danger of closing.
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