We’ve written extensively about the I-77 toll road dispute in northern Mecklenburg County. it’s been quite heated. It cost — and came close to costing — some area politicians their jobs. The McCrory administration has stood firm on the deal with the Spanish contractor — despite the grassroots outcry from the governor’s home county and the electoral losses of some key area allies. McCrory has issued a letter pushing for local endorsement of the toll deal, and insinuating that localities in the region would be forced to pay any contract cancellation penalties if the deal falls through. Toll opponents are not taking this laying down:
Today we received a copy of a letter Governor McCrory sent to the new chairs of CRTPO. (You may recall the previous chair, Commissioner Sarah McAulay, is neither chair nor commissioner as of last week.)
The letter requests CRTPO make a decision on cancelling the I-77 toll project by their next meeting. It contains one ominous statement after another, and all but dares them to.
What really caught our eye was a sentence that threatened to stick LKN with the cancellation bill:
“If the current strategy (toll lanes) is reversed, we anticipate the legislature could ask for the locality to absorb the costs in some manner.”
There are so many issues with this we hardly know where to begin.
First, the State of North Carolina signed the contract, not Lake Norman, yet the “locality” is to bear the brunt of their mistake. Remember, last summer a majority of LKN commissioners asked for a pause before signing the contract, and the Secy of Transportation said there is “no foundation” for delay.
Second, every town and county along the project has opposed the project except Charlotte.
Third, there are benefits to cancelling the contract: the $94 million public contribution will be returned to the state’s coffers, as will $77 million in “bonus allocation” that was slated to build direct access toll lanes. Also, up to $75 million in toll subsidies will not be required. That totals nearly $250 million that can be spent on other projects. Tellingly, the letter makes no mention of this.
Along those lines, we have a proposition for the legislature:
If you expect LKN to solely bear the costs of cancellation, then instead of returning the above money to the state, we should solely reap the benefits. We’ll come out $150 million ahead.
That assumes we know the cost of cancellation. Apparently the costs of cancelling the contract “can only be determined after such an action is taken.” In other words, we have to cancel the contract to find out how much it will cost to do so. Remember, last month Transportation Secretary Tennyson said the contract was flawless.
The letter also contains statements that are vaguely true. For instance, it closes with “the local planning organization must decide on whether the Charlotte metropolitan region will reaffirm or reverse the current strategy.”
That’s a long-winded way of saying CRTPO must vote to cancel the contract. This directly contradicts NCDOT’s signed and sworn legal brief which flatly states “NCDOT may terminate the contract ‘in its sole discretion’ at any time.” (p5, State Defendant’s Combined Motion, 15CVS 1076)
Second, echoing Tennyson’s words at the toll summit last month, the letter makes mention of a “regional strategy” and “regional plan” to pursue tolls. As anyone remotely conversant with the project knows, it is a Charlotte strategy, not a regional one. Charlotte, with 46% of the vote, dictates CRTPO’s direction.
If the CRTPO vote is a prerequisite to cancelling the contract then fifty years of tolls through LKN will depend on the vote of a single person who neither lives here nor represents us.
Third, it states “breaking the contract would entail reimbursing the contractor for costs incurred, both self-performed and damages for subcontracts into which they entered.” Except that’s not in the Termination Compensation section. Even if it were, according to Cintra’s third quarter report, to date they have spent $2 million on I-77 in 2015. As far as damages, the contract expressly disclaims them:
“184.108.40.206 Notwithstanding any other provision of the CA Documents and except as forth in Section 220.127.116.11, to the extent permitted by applicable Law, NCDOT shall not be liable for punitive damages or special, indirect, incidental or consequential damages, including, without limitation, damages for loss of profit or opportunity, whether arising out of breach of the CA Documents, tort (including negligence) or any other theory of liability, and Developer releases NCDOT from any such liability. “
[…]The letter reads like it was written by NCDOT. But it’s the governor’s signature at the bottom and right now we do not have a friend in the governor’s mansion.
This is an obvious attempt by the Governor to transfer the responsibility for this disastrous contract to local officials, instead of taking a stand and doing what’s right for the people of North Carolina. That’s not leadership.
The State of North Carolina should never have entered into an agreement with a company that has history of corruption and the contractors should never have been allowed on site with a lawsuit pending, nor should the project have even begun, until the lawsuit is settled.
This contract should be declared invalid and unenforceable due to nondisclosure of corruption. The State of North Carolina has the sole authority to terminate this contract.
I call on the Governor to cancel this contract immediately.