Special-interest push for South Carolina interstate hits roadblock

McClatchy NewspapersFebruary 3, 2013 

— Business leaders in Myrtle Beach tried every tactic they could to win $1.3 billion in funding for Interstate 73, a six-lane gateway to their seaside getaway.

They coaxed dozens of members of Congress to tour the area, including five who have chaired key committees, escorting some of them aboard helicopters for aerial views of clogged traffic in one of the country’s most popular resort communities.

The highway’s backers commissioned economic studies that showed the road would generate jobs, industry and development. They bought TV ads. They hired former congressmen and a onetime chairman of the Democratic National Committee to lobby in Washington.

Myrtle Beach-area businessmen, road builders and their family members poured nearly $1.4 million into the campaign coffers of S.C. Republican Sen. Lindsey Graham and then-Sen. Jim DeMint, three home-state congressmen, state legislators and political parties.

“I-73 is the largest economic-development project in South Carolina history,” Graham has said repeatedly.

Environmentalists hit back with studies that said upgrades to existing highways could deliver almost as much economic benefit at a tenth of the cost. But they have found themselves outmatched by the deep-pocketed, well-connected alliance pushing the new road.

Beginning in 2005, I-73 boosters secured more than $125 million from Congress and the state Department of Transportation for a 5.7-mile stretch of asphalt that would give them the beachhead they sought: an exit from I-95, the busiest travel corridor along the Eastern Seaboard.

But for all the money the highway’s supporters spent, the lobbyists they hired and the positive reports they printed, they have yet to get it built.

And for all their warnings of environmental destruction and runaway development, opponents couldn’t stop it, either.

In a testament to the condition of the nation’s highway finances, South Carolina ran out of money before it could put the first shovel in the ground.

With the nation short at least $14 billion a year in federal funding to maintain bridges and highways, other states are putting the brakes on all new projects, including many for which their members of Congress secured priority status and federal funding.

But a deeper look at the ongoing saga of I-73 and Myrtle Beach offers a glimpse of how private interests may influence decisions over highway spending and put projects on a fast track that has been stopped only by the recession.

Purchasing power

In the absence of clear national goals for federal transportation funding, projects such as I-73 have turned into a tug of war between highway promoters and environmentalists.

“I-73 would have the largest environmental impact of any infrastructure project in this state in a generation,” said Nancy Cave, who directs the Coastal Conservation League’s operations along South Carolina’s northern coast.

A study that Cave’s group paid for concluded that upgrading U.S. 501, a parallel four-lane highway, for about $150 million would avert any environmental damage and achieve much of the desired economic growth.

The backers of I-73 countered with their own study. They paid Parsons Brinckerhoff, an engineering firm that designs highways, for an analysis that showed an upgraded U.S. 501 couldn’t compare with the economic boon of building a six-lane interstate.

Brad Dean, president of the Myrtle Beach Area Chamber of Commerce, told McClatchy that the study and others financed by I-73 backers had found that the interstate would create more than 29,000 jobs, boost tourism and industry, and provide a fast hurricane-evacuation route that would “save 40,000-plus lives.”

But the argument over I-73 ultimately wasn’t lost or won based on economic development or environmental protection.

The business interests behind I-73 seemed to have two huge advantages: money and powerful political allies.

For more than a decade, I-73 has been the Myrtle Beach chamber’s top priority, Dean said. The chamber joined forces with a larger six-state coalition in the 1990s to galvanize support for I-73 and a second interstate, I-74, that would connect the Midwest with the Carolinas.

The chamber’s strategy wasn’t, however, about creating new freeways to the Midwest. It was to lock in money for the portion of the road it wanted, starting with what I-73 supporters dubbed the “interchange of hope,” an exit from I-95 that would take vacationers straight to Myrtle Beach.

In 2000, members of South Carolina’s congressional delegation had secured the first of tens of millions of dollars in congressional earmarks for a bypass near the town of Conway, 20 miles northwest of Myrtle Beach. That $386 million project, completed with state and county funds, eventually could link with I-73.

Next, the I-73 forces set their sights on the 2005 federal transportation bill, which contained 6,300 earmarks for projects around the country. I-73 was a big winner, getting the first of nearly $100 million in earmarks.

The S.C. Transportation Commission voted in March 2007 to pass a resolution naming I-73 the state’s top transportation priority. Two months later, the Legislature passed a law that required S.C. Transportation Department engineers to evaluate a host of criteria in considering interstate highway projects. I-73 didn’t make the cut.

Building the first 42 miles of I-73 probably would require financing from either the state transportation commission or the state transportation Infrastructure Bank, both of which have the authority to float private debt.

I-73 had allies at the commission and the infrastructure bank. Danny Isaac, a Myrtle Beach construction contractor who’s on the boards of the six-state I-73 coalition and the Grand Strand Business Alliance, chaired the state transportation commission in 2011 when it voted to approve a bond package that included nearly $100 million for the road.

But late last year, facing a financial squeeze, the commission voted to cancel the money.

But Clemmons and Dean are considering every revenue option, including building the highway as a toll road or even bringing in foreign investors.

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