Officials say stalemate puts I-526 completion in jeopardy

Contract negotiations for the completion of I-526 hit more snags.

Concern is growing that the future of the completion of Interstate 526 may be in jeopardy because nobody so far has agreed to cover cost overruns or legal fees that arise during the environmental permitting process.

The I-526 extension across Johns and James islands, which Charleston County Council approved in December 2012, has stalled for more than two years in the process of updating the project’s intergovernmental agreement, a three-party contract between Charleston County, the state Department of Transportation and the S.C. Transportation Infrastructure Bank.

State and county officials say the hold up is coming from the Infrastructure Bank, which so far has agreed to spend $558 million on the project, but is reluctant to agree to spend more.

“But everybody feels sure it will cost more than $558 million,” said DOT Commission Chairman Jim Rozier, who also serves on the bank’s board. “They need more money and the SIB has indicated they will not provide more money.”

Rozier also said that the bank will not cover the cost of lawsuits filed against the project in the environmental permitting process.

Those are some substantial roadblocks to completing the highway, Rozier said. “It baffles me as to how that’s going to happen.”

Debra Rountree, the bank’s director of operations, said the hold ups are all about money and who is responsible for overruns. “Nobody wants to say, ‘We’ll cover that.’”

She can’t predict when the contract process will move forward, she said. “Talks are continuing.”

The road project for years has pitted supporters, who say the project desperately is needed for safety and to alleviate traffic, against opponents, who say it will promote development and bring in more traffic than it would alleviate. They also said the money would be better spent on other road projects that are ranked as high priorities.

In the initial $420 million project contract, Charleston County was the project’s sponsor, the DOT was responsible for building the road, and the S.C. Transportation Infrastructure Bank was responsible for paying for it. But the contract must be updated because the estimated cost of the road has increased, and the county wants more control over building it.

“Whoever adopts the project will be getting sued,” said state Rep. Chip Limehouse, R-Charleston, a member of the bank’s board. “In my opinion, that’s a fact.”

Limehouse said the bank board in the fall approved new guidelines which stated it no longer will cover the cost of initial engineering work or litigation over permits.

“We’re interested in building roads and infrastructure,” Limehouse said, “not jumping into every fight that comes along.”

Bank board member Joe Taylor said he doesn’t think anybody can estimate with any accuracy how much those legal fees might cost. “It could be moderate. It could be a lot,” he said.

There often are people or groups who try to stop a project by threatening litigation, he said. “The question is how expensive is someone going to try to make it.”

Charleston County Council Chairman Elliott Summey, who strongly supports the project, said the county will not agree to cover the cost of project overruns or legal fees related to the environmental permit process. “No, no, no,” Summey said.

Those are project costs and should be covered by the bank, he said. “If the SIB pulled the plug (on I-526), they would be in default” on the original contract, he said.

But Summey said, “quality-of-life costs” would fall to the county. Those are costs associated with amendments initiated by Councilwoman Anna Johnson when the project was approved.

In one of those amendments, Council voted to consider claims of people who live within 1,000 feet of the road for a drop in the value of their property. Already, 64 county property owners have submitted claims for compensation totaling $8.47 million.

Myles Maland, a project manager for the Coastal Conservation League, a group strongly opposed to the project, said his group hopes the money could instead be used for high-priority projects, such as airport connector roads and improvements to I-26. “In every conversation I have had, the SIB is not going to give the (I-526) project more money. I-526 has reached a dead end.”

Reach Diane Knich at 843-937-5491 or on Twitter at @dianeknich.