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Tuesday, September 23, 2014


A North Carolina Bridgegate?

by Tom Sullivan

As corporate-carpetbagger friendly as the NCGOP has made North Carolina since taking control of the legislature in 2010, they keep surprising. This latest revelation Monday from North Carolina echoes the billion-dollar, Hudson Lights real estate deal thought connected to Gov. Chris Christie's Bridgegate scandal. WCNC-Charlotte has video here.

One of the most baffling of the Republicans' passions has been the hard sell to privatize public infrastructure. Okay, maybe not that baffling considering state House Speaker Thom Tillis and Rep. Tim Moffitt, R-Buncombe, both sit on the board of ALEC, Tillis received ALEC's Legislator of the Year award, and Moffitt co-chaired the state’s House Select Committee on Public-Private Partnerships with Rep. Bill Brawley, R-Mecklenburg. Gov. Pat McCrory only cancelled plans for a keynote speech to ALEC's annual meeting in Dallas this summer because of a budget impasse in Raleigh.

ALEC's entrepreneurial derring-doers love to capitalize on, well, any public infrastructure someone else built so they can profit from it at public risk. (No safety nets for you, but as a consolation prize, you get to pay for theirs.)

So if you value your public drinking water, sewer, schools, and roads, listen up. Because if they haven't tried this gambit yet in your state, it's coming.

Just last week, Gov. Pat McCrory rolled out his 25-year vision for the enhancing the state's transportation. No suprise, it relies on public-private partnerships (P3s), an ALEC favorite: "Optimize the use of public-private partnerships, innovative managed lanes [read: tolls] and other fee-for-service projects."

Here's how those "innovative ideas" have worked elsewhere:

Just yesterday (9/22/14), debt-ridden Spanish-Australian Cintra-Macquarie infrastructure group filed for bankruptcy on its 75-year contract to operate the Indiana Toll Road. After just eight years.

Moody's, the rating agency, declared Cintra's 50-year Texas toll road concession in default in July. After just two years.

After opening in 2007, Macquarie's 35-year concession for the South Bay Expressway (San Diego) went bankrupt in 2010. After just three years.

Nevertheless, North Carolina is signing contracts with Madrid-based Cintra for a 50-year toll lane project (HOT lanes - High Occupancy Toll) on I-77 north of Charlotte in Speaker Thom Tillis' district, with Tillis' enthusiastic support and backed with federal and state tax dollars. Yours.

Now, Tillis already has taken lots of heat from his own base over this deal. The local tea party wants his head on a platter. Local Republican politicians oppose it, and local small businessmen as well, many of them Republicans. Much of that I detailed in a recent op-ed here.

More recently, Tillis and McCrory's lieutenants have fanned out to face down angry crowds of their own voters. Brawley recently faced tough questions in Cornelius, NC from unaffiliated and Republican constituents at a town hall about tolling I-77 (video here). Speaker Pro Tem "Skip" Stam was scheduled to appear a week ago to rebut a presentation to the Southern Wake Republican Club by NC Citizens Against Toll Roads.

Sure, much of the impetus behind the Republican P3 deals is simply Koch-fueled, metastasized capitalism. But with the strong pushback from their own base, the question hanging in the local air has been why are they so awfully fixated on it?

WCNC-Charlotte has one possible explanation. It starts with some prime real estate, a farm called Augustalee near the interstate:

Before the great recession, developers dreamed of turning this old farm into something like Birkdale Village. They planned a half billion dollar complex with shopping, office space, a hotel and condos.

But in the recession the deal went bust. The bank took the land. Then a couple of years ago a group of executives from a company called ACN bought Augustalee at the relative bargain price of $7 million...

When ACN executives invested in the prime Cornelius property, they needed one key thing to develop Augustalee – a new exit ramp off I-77.

An exit that -- courtesy of the taxpayers and a bill introduced by Brawley -- developers now won't have to pay for themselves, a gift that could make them millions. The money will come from a bonus fund for local governments that accept toll projects, says WCNC. "A little sweetener slipped into the bill" to make up for "the bitter pill of a half century of tolls."

WCNC-Charlotte has a detailed investigative report with video. Except for the part about Donald Trump, you can probably guess the rest: a superPAC, several "perfectly legal" campaign contributions, and "purely coincidental" timing.

And that may be. But campaign donations aside, knowing ALEC and seeing "Incentives for Local Funding and Highway Tolling" attached to a bill titled Strategic Transportation Investments, the bonus funds in the new law seem clearly aimed at buying off local opposition to seeing decades of toll revenues extracted from the local economy and sent offshore. Just shut up and take the money.

Better watch out for that gambit wherever you live.