Second Midtown Tunnel coming - as well as tolls

It's official: Hampton Roads will get a second Midtown Tunnel - and a return of tunnel tolls.

The state signed an agreement Monday with a consortium of private companies to build a new, parallel Midtown Tunnel, rehabilitate the existing Midtown and Downtown tunnels, and extend the Martin Luther King Freeway to connect with Interstate 264.

Construction and tolls are set to begin later next year.

The final step in the state's lengthy public-private partnership process is the financial close of the deal, which officials expect early next year with the anticipated approval of a low-interest federal loan for a portion of the $2.1 billion project.

Virginia Transportation Secretary Sean Connaughton said he's "extremely confident" it will be done. The consortium, Elizabeth River Crossings, has lined up its financing, the federal transportation department is finalizing the terms of its loan, and the state has committed $362 million, he said.

"This project is one that has been on the books for some time and has been long overdue," Connaughton said. "It's amazing to me this 50-year-old tunnel carries almost 1 million vehicles a month."

He added that it's the most heavily traveled two-lane road east of the Mississippi River.

Virginia Department of Transportation Commissioner Greg Whirley said studies show the improvements will save tunnel commuters an average of 30 minutes a day by reducing congestion by adding capacity. To many, though, that doesn't ease the sting of the tolls, which start next fall.

"I'm furious," said Portsmouth Mayor Kenny Wright. "The price of the tolls is too high and the governor signed this deal without consulting the mayors of the cities affected. We haven't had a chance to weigh in and it's not fair.

"We need the project, but there's got to be a better way to approach the financing of it than gouging people with high tolls."

Toll rates initially would be set at $1.59 for off-peak hours and $1.84 during peak hours for cars and $4.77 for off-peak hours and $7.36 during peak hours for trucks using the Downtown and Midtown tunnels. Tolls on the Martin Luther King Freeway extension would be $1, or 50 cents for cars that used either of the tunnels. That toll would be collected only on the new section when it opens.

Tolls will be collected electronically using E-ZPass, eliminating the need for toll booths.

Rates will increase over time, starting when substantial construction is complete in 2016; the entire project will be done in 2017. Increases would then be annual and limited to the greater of 3.5 percent or the Consumer Price Index.

"There's no way we win here in Portsmouth," Wright said. "They're taking land I've got on the tax rolls, so I'm not able to generate revenue from that land. I can't tax or assess the value of the freeway. Yet the private partners are going to make a profit and hide under the umbrella that it's a VDOT project."

Wright wants to know whether some of the $500 million the state has committed to a possible public-private partnership to build a new U.S. 460 as a limited-access highway can be diverted to the Midtown project to further lower the toll.

The state's revised public-private transportation act requires a public comment period for 30 days before entering an agreement, however Chief Deputy VDOT Commissioner Charles Kilpatrick said that doesn't apply because the project falls under the old guidelines that were in place when the project was initiated.

He noted that many details of the agreement were publicly presented at a Commonwealth Transportation Board meeting in Richmond over the summer.

About two dozen Portsmouth residents listened to VDOT and E-ZPass officials discuss the project Monday night in a civic league presentation that had been scheduled for weeks in Waterview. Many in the crowd responded with sighs, shaking heads and sardonic laughs.

"I bet Social Security doesn't go up as much," Dianne Pieper said about how high the tolls will escalate over the life of the deal.

Residents questioned the E-ZPass system, the project's financing and why it was done the way it was.

Afterward, Waterview Civic League President Sid Cervarich urged them to use this experience as a motivator to get themselves and others involved early in future projects that affect their community.

Under the agreement signed Monday, VDOT will retain ownership of the tunnels and oversee Elizabeth River Crossings' activities.

Elizabeth River Crossings is a joint venture between Skanska Infrastructure Development and Macquarie Group.

The consortium will finance, build, operate and maintain the facilities for 58 years.

It assumes the risk for delivering the project at its forecasted 10 to 12 percent return. The state is not guaranteeing a return on investment.

Pilot writer Dave Forster contributed to this report.

Debbie Messina, (757) 446-2588, debbie.messina@pilotonline.com