Virginia Commonwealth University

Make it real.

Tunnel Construction Relief Bills Killed

January 31, 2014

By Lauren McClellan
Capital News Service

RICHMOND — Two bills that would have provided monetary relief to Hampton Roads area businesses affected by construction on the Downtown Tunnel have been killed in the General Assembly.

Senate Bill 292, introduced by Sen. Louise Lucas, D- Portsmouth, would have established the Downtown Tunnel Construction Relief Grant Fund. The fund would have provided each local business affected by construction with $10,000 for economic hardship experienced because of the project.

SB 292 was passed by indefinitely in committee this past week.

House Bill 351, like SB292, aimed to establish the same fund, but would have given businesses $1,500 instead of $10,000. HB 351, which was introduced by Del. Matthew James, D-Portsmouth, was killed Jan. 20.

“If you have a company, or you are an employee and depend on people coming to your place for dinner or something like that, (tunnel construction) would be disruptive to your business,” James said. “People would naturally make a decision sometimes and say ‘Well, I don’t know if the tunnel’s open or closed. So, I’m going to go to another (business).’”

According to James, a survey done by the General Assembly and the Virginia Economic Development Partnership found many businesses in the area were suffering severely because of the construction.

President Tony Goodwin of the Portsmouth Olde Towne Business Association is concerned with how the construction and new tolls will affect downtown Portsmouth. He said construction essentially “isolates” the area.

“I don’t think I would wish (this situation) on anyone, as my competitors or my enemies,” Goodwin said. “Until people start adjusting their habits — and things balance themselves out — it’s going to be a little bit of a tough road.”

Goodwin also expressed concern about the state not releasing pertinent economic information about the overall Elizabeth River tunnel projects.

“As they (the state and contractors) were coming up to the point of financing and signing the contract, we (the business association) demanded they do a full-blown economic impact study,” Goodwin said, “which was never released to the businesses nor the public because it was supposedly proprietary information.”

Opponents of the bill were concerned about the future ramifications the fund might have on other communities.

“I was told that the bill was a creative fix, and that they were sympathetic,” James said. “But (opponents of the bill) told me that they were worried about the precedent, even though we had a sunset that once the tunnel opened, the grant would not be available.”

Both bills would have required local business owners to submit applications to prove the Downtown Tunnel construction had affected their business.

Downtown Norfolk Council President Mary Miller said some of the information in the bills was unclear.

“Was it really supposed to be the Downtown Tunnel and the Midtown Tunnel? Or just one?” Miller said. “Because the Elizabeth River tunnel project involves two tunnels.”

Miller said she was not sure the bill would have helped businesses in Norfolk because of its vague language.

“You have to have a pretty clear — I think — idea of who’s impacted,” Miller said.

Two impact statements were released estimating the costs of the projects outlined in each bill.

“The potential number of applicants for a grant under the program is indeterminate,” the impact statement stated. “The impact estimate … anticipates that VEDP will receive and review several thousand applications during the grant period established in the bill.”

The Virginia Economic Development Partnership estimated that the cost of creating the fund would have been around $538,000. According to the impact statement, multiple positions would have had to be created in order to administer the funds.

The positions needed included one marketing representative that would explain the program to those potentially affected by the tunnel construction, three grant processors and performance monitors, and an administrator to oversee the project. Salary and benefits for these positions ranged from $50,000 to $140,000 apiece.

If passed, both bills’ provisions would have sunsetted in July 2015. Tolling for the Downtown and Midtown Tunnels in the Hampton Roads area begins Feb. 1.