Greenville toll road on more solid financial ground

Greenville NewsFebruary 19, 2014 

Southern Connector toll road map

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— Two years after it emerged from bankruptcy, things are looking brighter for the Southern Connector, and leaders say the toll road with a complicated history now has a clear path ahead.

The much-maligned Interstate 185 that stretches 16 miles across rolling fields of southern Greenville County has built a loyal following of drivers who count the $3 cost for cars to drive the entire stretch a small price to pay to avoid congestion on alternate routes.

Yet more than a dozen years after the toll road first opened, it remains divisive. Some drivers love the open freeway and the time it shaves from their commute. Others avoid it at all costs, indignant at the concept of having to pay to use a road, foreign to many Southern drivers.

Ridership steadied and has begun to trend upward after it hit low marks during recession years, though the number of drivers still falls short of peak years in the mid-2000s.

More importantly to investors and the non-profit association that operates the Southern Connector: The road collected its highest annual revenue in 2013 and was able to make all of its bond payments, said Tim Brett, spokesman for the Connector 2000 Association, which oversees the toll road’s operations.

Though the interstate has never reached the ridership levels projected when the road was built, leaders say it’s still attracting new drivers and its ridership is forecast to grow steadily in the next decade.

Toll revenue in 2013 hit $6.96 million, up from $6.75 million in 2012. Revenues have increased each year since 2008.

Brett attributed an improved economy to much of the growth and said drivers from the Golden Strip have found it’s a more convenient drive than trying to navigate heavy interstate traffic, particularly on weekdays.

“The first half of the year was just sort of flat, but once July hit then we really started to take off like gangbusters,” said Pete Femia, the Southern Connector’s general manager. “December alone was up 13-14 percent compared to last December so that’s nice to see.”

Tolls so far this year are up 6 percent over last year, Femia said.

Lisa Stevens said she uses the Connector every Tuesday when she drives from Simpsonville to Happy Trails Cowboy Church in Pelzer.

“More important than the 10 minutes it saves, it’s less stressful than the other routes,” Stevens posted on Twitter.

The Connector counts Stevens among an increasing number of loyal riders who have purchased Palmetto Passes, the pre-paid discount cards that also allow drivers to whiz past toll booths.

Revenues from the passes have increased every year since the road opened and hit $2.22 million in 2013, nearly a third of the road’s total revenue.

The toll road is a “wonderful asset to the community,” that Greenville has been able to use to leverage other road construction projects in the past, Brett said. The community will one day realize the asset it has, he said.

Some Upstate residents disagree, with a few posting on social media that they avoid the road at all costs, even taking longer alternative routes to avoid paying a toll.

Nikhil Jain said he has never used it, and doesn’t ever plan to. He drives the I-385 and I-85 stretch instead.

“Hands down, I-185 is a great shortcut,” he wrote on Twitter. “But I’m not willing to pay the toll for a road so short in length as it.”

History

The Connector was privately financed but isn’t privately owned. It was built on the backs of investors based on usage projections that were revised down after a 2009 study by consulting firm Stantec showed the Connector wouldn’t attract the traffic developers once believed it would.

When the Connector emerged from a nine-month bankruptcy proceeding in 2009, it issued $150 million in bonds to replace $200 million in bonds it previously issued.

The new terms call for scheduled toll increases. Rates rose in 2011 to $1.50 for a 2-axle vehicle to use a section of the road. An end-to-end trip costs $3.

Rates will rise to $1.75 for a 2-axle vehicle in 2016, Brett said.

The Stantec study projects growth from 3 percent to 8 percent in coming years, with slight dips in years when tolls are scheduled to increase.

“It’s important for the investors to get their money back,” and the automatic toll increases help facilitate that, Brett said.

The Connector Association was able to make all debt payments in 2013 and socked away $28,300 in a bond prepayment fund.

It also paid the state Department of Transportation 10 percent of cash flow for ongoing road maintenance.

“Under the new debt structure, it’s a much more realistic plan for the Southern Connector to pay back the bondholders,” Femia said.

What’s next?

Football season is the highlight of the year for the Connector as fans make day trips and angle for the quickest route to get to their tailgate spot. Beach season brings traffic headed to the coast or to Lake Hartwell, Brett said.

This year, operators have set a goal to attract more drivers, but also are developing plans to aggressively pursue scofflaws who failed to pay tolls, which will be announced soon, he said.

Toll violators hit an all-time high in 2013, and $134,663 was collected in toll violations, also a record.

The association had asked the state Department of Transportation last year to work with the state Department of Revenue to collect tolls from what they called “deadbeats” who drove past toll booths without paying.

The transportation department rejected their request, citing privacy concerns with sharing Social Security numbers with the state Department of Motor Vehicles.

Brett said they weren’t pleased with the decision but would remain “very aggressive in pursuing those violators.”

Brett said the state does help collect from toll violators on the state-operated Cross Island Parkway near Hilton Head.

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