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Public might not warm to toll roads
But officials believe Raleigh's outerbelt and the Monroe Connector/Bypass are so needed that they won't fail
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Published: June 2, 2009
GREENVILLE, S.C. - When the Southern Connector opened in 2001, the toll road was expected to spark development in the southern part of the city. Boosters said it would carry thousands of cars daily, allowing them to bypass Interstate 85 congestion.
But eight years later, development hasn't boomed. The four-lane highway carries only half as many cars as forecast. And because toll revenue is far short of projections, the $200 million project has been using its reserves to pay off its debt for six years.
It's scheduled to go into default in January.
As North Carolina moves forward to build several new toll roads, including two in the Charlotte area, the Greenville highway is a cautionary tale of how the public may not warm up to paying tolls.
N.C. officials believe that two of their toll projects -- Raleigh's outerbelt and the Monroe Connector/Bypass -- are so critically needed that they won't fail. The planned Garden Parkway in Gaston County faces more challenges, they say, but officials are confident that toll road is needed more than Greenville's Southern Connector.
The Garden Parkway is a planned 22-mile expressway linking Charlotte/Douglas International Airport with southern Gaston County. It's being built as a bypass to Interstate 85, and local leaders hope it sparks development because it will add a new bridge over the Catawba River, improving access.
But the highway is expensive. The N.C. Turnpike Authority hasn't made a final cost estimate, but it will likely cost at least $1.2 billion.
"It does have some of the same challenges (as Greenville)," said N.C. Transportation Secretary Gene Conti. "Because of the river crossing, it's financially challenged. How much can you charge people? If you can't recover as much of the cost, where do you find the additional resources?"
North Carolina and other states are turning toward tolls because tax money is drying up. The gas tax -- a major source of road funding -- is seen as an unreliable revenue source because people are driving more fuel-efficient cars.
Not enough drivers
The Southern Connector, also known as Interstate 185, creates a loop through the southern part of Greenville County. It gives northbound drivers on I-85 a shortcut to Columbia, and it also can be used as an I-85 bypass.
In the highway's first full year, in 2002, it was expected to handle just under 27,000 toll transactions a day. The actual count: 10,900.
In 2007, the connector had narrowed the gap slightly. It was forecast to handle 33,000 transactions daily, and it handled 16,000.
But traffic has slumped during the recession, and the highway has fallen further behind its traffic targets. Fewer people are driving to work, and officials believe some drivers now aren't willing to pay the $2 toll to drive all 16 miles.
For much of the Southern Connector, the daily traffic count is about 8,000 cars a day. That's about as many cars as a medium-sized city street, such as Lawyers Road in Mint Hill. Interstate 85 through Charlotte carries 140,000 cars a day and I-85 carries about 90,000 cars through Greenville.
When asked about this year's Southern Connector projections, Pete Femia, the connector's general manager, joked: "I don't know. I tore that page out of the book."
To pay its debt, the connector has been using financial reserves. But those rainy day funds will be gone at the end of 2009. If the connector's debt isn't restructured, the highway will go into default in January, Femia said.
Doug Robertson, of Greer, S.C., uses the Southern Connector to get to his job at an office park that's sprung up near the toll road at U.S. 25.
"If there is traffic in I-85, I can take this to circumvent it," Robertson said. "Some people think the price is exorbitant -- maybe 25 cents would be more appropriate."
Chris Brown of Greenville said he'll often use longer local roads to avoid the connector. Many locals are opposed to the idea of toll roads, he said, because they've never had to pay for tolls before.
Toll roads are most common in the Northeast, and few have been built in the South.
"People from out of town are more open to it," Brown said. "I think most people avoid it. I think it will be used eventually, but they just built it ahead of its time."
There has been some new development along the highway, but most of the route still looks like a rural interstate.
N.C. has big toll plans
The N.C. Turnpike Authority is planning to sell more than $1 billion in bonds this summer to build part of Raleigh's I-540 outerbelt in south Wake County. Though the authority considers the Raleigh toll road a strong project, it faces hurdles in the bond market.
Fitch Ratings assigned a relatively poor rating to nearly $300 million in bonds the authority plans to use for the Raleigh project. Those bonds are only backed by toll revenue. The authority hopes a second bond offering -- backed by tax dollars -- will fare better.
The authority also recently made a recommendation on which route to use for the Monroe Connector/Bypass and the Garden Parkway. Those toll roads are scheduled to open in 2013 and 2014, respectively.
"You'd be crazy not to look at it," said David Joyner, executive director of the N.C. Turnpike Authority about the Greenville road. "I have been told there has never been a toll project in the history of the United States that's gone belly up. But this one is close."
Joyner agrees with Conti that the Garden Parkway isn't as strong of a toll project as the Raleigh outerbelt and the Monroe Connector/Bypass. But he said the Gaston toll road will succeed, and it shouldn't be compared to the Southern Connector.
N.C.'s toll projects are being partially funded with tax dollars, he noted, which means tolls don't have to cover the entire debt payments, as they do in Greenville. In addition, the Charlotte toll roads have a built-in advantage over Greenville: More people.
The Greenville metro area has 625,000 people, while Charlotte has 1.7 million.
The N.C. Turnpike Authority projects the Garden Parkway will carry about 40,000 cars a day at the Catawba crossing by 2030, and between 13,000 and 18,000 cars per day west of U.S. 321. The tolls haven't been set, but a consultant in 2006 suggested the entire parkway could be driven for $2.50.
That's cheaper than the Southern Connector, though tolls have been increased there in an attempt to raise more money.
"It's a case of study of build it and they will come, but they got off to a really slow start," Joyner said. "But to compare any N.C. project to the Southern Connector is a bad analogy."
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