Business leaders in Myrtle Beach, S.C., 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’ve 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 Sens. Lindsey Graham and 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 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 country short at least $14 billion a year in federal funding to maintain bridges and highways, other states are putting the brakes on new projects, including many for which their members of Congress secured priority status and federal funding.
A deeper look at the still-unfinished 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.
“There’s no appropriate strategy for introducing Congress and the state legislature to our transportation issues in this region of South Carolina that we have not taken full advantage of,” said Republican state Rep. Alan Clemmons, who leads a six-state coalition that’s seeking funds for I-73.
Their efforts, however, have collided head on with a nationwide fiscal crunch.
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.
Both sides commissioned studies that came to opposite conclusions.
The environmentalists say that upgrading existing roads would be cheaper without destroying forests and wetlands. The highway backers say the new interstate would generate thousands of jobs and save thousands of lives by creating a hurricane evacuation route.
Without a truly independent analysis, it’s hard to know whether the road is worth building.
“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 a six-lane interstate.
Brad Dean, the 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 wasn’t ultimately 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 the 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 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.
“I think it’s an established principle that as soon as you lay your first foot of asphalt, you’ve now taken the project from concept to reality,” Clemmons said.
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 would 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. The road’s lobbyists, including two former South Carolina congressmen and former Democratic National Committee Chairman Don Fowler, roamed the hallways of Congress.
I-73 was a big winner, getting the first of nearly $100 million in earmarks. It was designated a “Project of Regional and National Significance.”
Chamber President Dean credited Graham, Republican then -Rep. Henry Brown, who was on the House highways subcommittee, and Republican Sen. James Inhofe of Oklahoma, then the chairman of the Senate Environment and Public Works Committee, as instrumental in getting the designation, which sounded important but was in reality a way for members of Congress to protect funding for pet projects.
In 2007, Graham invited then-U.S. Transportation Secretary Mary Peters, a former federal highway administrator, to visit the area.
Graham has received at least $78,619 in campaign donations from the businesses that back the interstate and another $158,951 from state road builders and highway engineers in the past 15 years.
The South Carolina Transportation Commission, whose members are appointed by state politicians and must approve spending by the state DOT, voted in March 2007 to pass a resolution naming I-73 the state’s top transportation priority.
Two months later, the state legislature passed a law that required Transportation Department engineers to evaluate a host of criteria – including traffic projections, financial viability, environmental impact and economic development benefits – in considering interstate highway projects.
I-73 didn’t make the cut.
South Carolina’s state-owned highway network grew during a spending splurge to more than 41,000 miles, the fourth most in the nation, even though the state ranks 40th in land area.
Numerous state officials criticized rural legislators who demanded that the proceeds of a nickel-a-gallon hike in the state gasoline tax in 1987 be used to produce a maze of outlying highways.
As a result, some four-lane state highways led “from nowhere to nowhere,” such as from Abbeville to Greenwood, with a combined population of 28,000, said Republican state Rep. Tracy Edge of North Myrtle Beach, an I-73 supporter.
But times have changed in South Carolina, which was swept by anti-tax fervor and hasn’t raised its 16-cent-a-gallon gas tax in a quarter-century. It’s now the third lowest in the nation.
Jim Warren, the state Transportation Department’s chief financial officer, said South Carolina faced “a broken paradigm” in its highway funding.
Slow to fully recognize the impact of these combined forces, state officials kept commissioning highway projects until the money ran out in the summer of 2011, forcing some contractors to wait months for payment. The state also deferred maintenance, which multiplies future repair costs.
In December, South Carolina’s Transportation Infrastructure Task Force reported that it would cost $48.3 billion to bring the state’s highways to “good” condition over the next 20 years – exceeding anticipated funding by $23 billion.
The pro I-73 forces had positioned themselves well by 2009.
The North Eastern Strategic Alliance, a business group that represents nine counties along the proposed route, hired Republican former U.S. Rep. John Napier and Fowler, the former DNC chairman, to lobby for I-73 in Washington. The alliance’s backers included Burroughs & Chapin, a large real-estate development firm that’s perhaps Myrtle Beach’s most influential company.
The six-state coalition made its home in the Myrtle Beach chamber’s offices, with Clemmons serving as its chairman and Dean its president.
The groups targeted “the movers and shakers of Congress,” bringing them to town to see the area’s traffic congestion, Clemmons said.
Dean and Clemmons said that at least 75 members of Congress got tours in the past decade, including four lawmakers who’ve led the congressional panels that write transportation legislation: Alaska Republican Rep. Don Young, Democratic former Rep. Jim Oberstar of Minnesota and his successor, Republican Rep. John Mica of Florida, as well as Oklahoma Sen. Inhofe.
Kentucky Republican Rep. Hal Rogers, the powerful chairman of the House Appropriations Committee, was among the guests who got chopper rides, Dean said.
Meanwhile, the Grand Strand Business Alliance – a group that represents hoteliers, restaurateurs, golf course operators and other merchants in Myrtle Beach and surrounding cities – showered campaign donations on key state lawmakers.
The alliance’s political action committee and affiliated PACs have given more than $250,000 to legislators, their challengers or statewide candidates since 2006, state campaign records show.
The alliance advised the Myrtle Beach Sun News, a McClatchy newspaper, that it also had contributed more than $377,000 to the state Republican Party from 2004 to 2010. It also gave $70,000 to both major parties’ legislative caucuses.
In addition, The Sun News reported in 2010 that Dean and other officials tied to the chamber helped deliver more than $200,000 in campaign money in 2009 to Republican gubernatorial candidate Gresham Barrett and state legislators from obscure companies, at least two of them bankrupt, triggering an ongoing investigation by the FBI and Internal Revenue Service.
Dean declined to comment on the matter.
END OF THE ROAD
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 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 April 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.
“We still don’t have enough money to do all of these projects that people are wanting to do,” said John Edwards, the owner of a piping and machinery company in the western part of the state who’s now the panel’s chairman. “The citizens of South Carolina may not be happy if we go borrow all that money to build a road to Myrtle Beach.”
The infrastructure bank has virtually exhausted its borrowing capacity, said its director, Debra Rountree.
While I-73 couldn’t get enough financing from the state or the federal government or even solid backing from the state Transportation Department, the die-hards aren’t giving up.
Clemmons and Dean said they were considering every option to gin up enough revenue to move ahead, including building the highway as a toll road or even bringing in foreign investors.
“We haven’t had enough clout to get it funded yet,” Dean said. “We’re committed to pressing forward.”