Restructure the debt
Thirty million drivers can't be wrong.
That is how many people have driven the Southern Connector since it opened in March 2001. That is a lot of drivers. That is almost seven times the number of people who live in South Carolina. That is almost double the amount who went to NFL games last year.
The problem is it is not nearly as many as the developers predicted. It's roughly half actually, which is a major reason the Southern Connector is struggling financially. The projections given by InterWest Carolinas, LLC, via Wilbur Smith and Associates to the South Carolina Department of Transportation more than a decade ago were the basis for the bond mechanism created by Lehman Brothers to pay for the road. The goal was for toll fees to pay back the bonds, pay for road maintenance and maintain a reserve fund.
That has not happened, which means the bond payments and the money for road maintenance are past due. That is why Connector 2000 Association, a group of private, volunteer citizens, who manage the road for the state, is asking the Legislature to allow it to restructure the debt. The Connector 2000 Association members are not the developers of the roadway, have never been paid for their work and were not the group that did the traffic study. The Connector 2000 Association is the group looking for a solution.
The restructuring would be for the time frame of the bonds to be repaid. Instead of the agreement between the Association and the bondholders ending in 2051, it would end in 2086. South Carolina citizens would not pay anything under the proposal. In reality, South Carolina citizens benefit from the change because the Association will be able to pay the state for continued road maintenance. The benefit for the investors is they could eventually recoup more of their losses. Many organizations have to restructure bond payments and the Connector 2000 Association is not immune.
The Southern Connector did not happen overnight. County and state planners first envisioned a highway crossing the Southern portion of Greenville in the 1960s. It was discussed for decades and considered vital for the economic growth of the county, but funding was never available.
The state DOT decided to address the issue in the 1990s while also looking at how to fund other long-term road projects including the Cooper River Bridge in Charleston, the Conway Bypass near Myrtle Beach and the Bobby Jones Expressway in North Augusta. The DOT asked bidders to respond with creative ideas to build and pay for the road. InterWest Carolinas, which was a group formed specifically for this project, offered the idea of the toll road and the data to support it when responding to the DOT.
The Southern Connector is an important asset for Upstate South Carolina. On its heaviest days, 18,000 vehicles traverse it. On average, there are about 10,000. Restructuring makes sense because it creates a way for the DOT to get its money back and the bondholders to regain some of their funds. Lawmakers should take immediate action.
That is how many people have driven the Southern Connector since it opened in March 2001. That is a lot of drivers. That is almost seven times the number of people who live in South Carolina. That is almost double the amount who went to NFL games last year.
The problem is it is not nearly as many as the developers predicted. It's roughly half actually, which is a major reason the Southern Connector is struggling financially. The projections given by InterWest Carolinas, LLC, via Wilbur Smith and Associates to the South Carolina Department of Transportation more than a decade ago were the basis for the bond mechanism created by Lehman Brothers to pay for the road. The goal was for toll fees to pay back the bonds, pay for road maintenance and maintain a reserve fund.
That has not happened, which means the bond payments and the money for road maintenance are past due. That is why Connector 2000 Association, a group of private, volunteer citizens, who manage the road for the state, is asking the Legislature to allow it to restructure the debt. The Connector 2000 Association members are not the developers of the roadway, have never been paid for their work and were not the group that did the traffic study. The Connector 2000 Association is the group looking for a solution.
The restructuring would be for the time frame of the bonds to be repaid. Instead of the agreement between the Association and the bondholders ending in 2051, it would end in 2086. South Carolina citizens would not pay anything under the proposal. In reality, South Carolina citizens benefit from the change because the Association will be able to pay the state for continued road maintenance. The benefit for the investors is they could eventually recoup more of their losses. Many organizations have to restructure bond payments and the Connector 2000 Association is not immune.
The Southern Connector did not happen overnight. County and state planners first envisioned a highway crossing the Southern portion of Greenville in the 1960s. It was discussed for decades and considered vital for the economic growth of the county, but funding was never available.
The state DOT decided to address the issue in the 1990s while also looking at how to fund other long-term road projects including the Cooper River Bridge in Charleston, the Conway Bypass near Myrtle Beach and the Bobby Jones Expressway in North Augusta. The DOT asked bidders to respond with creative ideas to build and pay for the road. InterWest Carolinas, which was a group formed specifically for this project, offered the idea of the toll road and the data to support it when responding to the DOT.
The Southern Connector is an important asset for Upstate South Carolina. On its heaviest days, 18,000 vehicles traverse it. On average, there are about 10,000. Restructuring makes sense because it creates a way for the DOT to get its money back and the bondholders to regain some of their funds. Lawmakers should take immediate action.
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