I-73: One giant step forward, same old error

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Analyst says it’s all been a costly mistake

By ROBERT MEYEROWITZ

When it comes to spending and infrastructure, one of South Carolina’s great white whales rose from the deep with news last week that the Army Corps of Engineers approved a permit to begin work on the South Carolina leg of I-73. Ultimately, the interstate highway could take motorists from Michigan’s Upper Peninsula straight down to Myrtle Beach.

The permit covers the whole state length, slicing across its northeastern corner, starting near Bennettsville. Construction could begin within two years, supporters say, on a project first contemplated in 1982.

The southern half alone, linking I-95 to the Conway Bypass, is estimated to cost more than $1 billion, with total costs estimated now to reach as high as $4 billion.

U.S. Representative Tom Rice, the Republican from Myrtle Beach, hailed the permitting, saying that “studies indicate” the highway will generate approximately 22,000 permanent jobs.

Myrtle Beach Area Chamber of Commerce CEO Brad Dean seconded that, saying the highway would bring “more jobs, higher wages” and “economic growth” to an area dominated by the tourism industry. Myrtle Beach already sees more than 15 million annual visitors.

Not to be outdone, the Department of Transportation, on its I-73 website, i73insc.com, says the new highway “would support economic growth and regional competitiveness for the State of South Carolina.”

And then there is Ruby Durham of WMBF news, the NBC TV affiliate in Myrtle Beach, who had this to report last week:

Once construction starts for I-73, it changes the game for economic development in our area. The interstate is going to put us at a more competitive advantage for industry growth.
The I-73 project will do more than reduce traffic on Highway 501 and cut down on drive times. It’s predicted to create higher wages and drop the unemployment rate in our area. Most significant is that it has the potential to bring thousands of jobs to our area.
Economic developers predict the millions of dollars it’s going to take to build I-73 could potentially be paid for within four years because of the economic development the interstate is going to create.
The I-73 project will not only bring jobs when it comes to actually building the road, it’s going to bring jobs well after it’s built. According to research by economic developers, I-73 could generate about 7,700 temporary construction jobs, and 22,000 permanent jobs after construction.
Jobs will be created specifically for work on interchanges and stops along roads like new gas stations, hotels and restaurants…

 

There’s just one thing.

These claims about jobs and economic activity generated by a highway seem to stem in large part from one source, a  2011 report by the firm Chmura Economics & Analytics, with offices in Cleveland, Spokane, and Richmond, Virginia, entitled “Economic Impact of I-73 in South Carolina.”

There have been other studies, but here, the Chura report is foundational. Its summary states: “The existence of I-73 will inject billions of dollars into the I-73 Corridor and South Carolina, and provide tens of thousands of jobs in tourism, retail, service, and warehouse industries. After road completion, annual economic impacts estimated at $2.0 billion will sustain 22,347 jobs in South Carolina in 2030 and beyond.”

From the “about” part of its website:

Chmura’s unique approach to economic analysis is part science, skill, and experience, and part art, innovation, and creativity. Helping our clients convert data into actionable intelligence is the key to our success. In all of our project engagements, we aim to produce the kind of information that supports confident decisions.

 

The report was prepared for the North Eastern Strategic Alliance, a Florence-based “regional economic development organization that serves a nine-county region in the northeast corner of South Carolina.” Its current executive committee members include state senators Luke Rankin, Kent Williams, and Hugh Leatherman.

The organization touts its economic development expertise, stating “NESA will work with CSX (railroad), the South Carolina Department of Transportation, water and sewer authorities, telecommunications companies, and energy companies to identify locations that have the infrastructure your company requires to be successful.”

It’s fair to say that NESA and I-73’s other boosters got what they’d hoped for from the Chmura report. They touted it.

Tom Stickler, a retired engineer from Pawleys Island, heard that hoopla six years ago. “In my work as an engineer,” he says now, “you kind of have to say, let’s look at the numbers beneath this report — and this report just didn’t smell right…

“There were two big errors. The first was when Chmura said you’ll save one to two hours of travel time on this new highway. Well, that’s 45 miles. It’s kind of hard to save one to two hours on 45 miles.”

The Army Corps estimated the saved travel time as being more like 20 minutes, Stickler notes. The result, he says, is a 367 percent error in calculating the increase in tourism due to reduced travel time.

The second error, he says, compounded the first by assuming every visitor to Myrtle Beach would come on I-73. A state DOT study found that if I-73 were a toll road, as is contemplated, at a cost of 12 cents per mile, fewer than 10 percent of drivers bound for Myrtle Beach would use it.

Extrapolating from the initial errors, Stickler concluded that the estimate of new jobs that would be created “is off by a factor of 40.”

“Keep in mind the old maxim, garbage in, garbage out,” he says. “It doesn’t matter how sophisticated your computer program is if the data that you input is garbage.”

The new permanent jobs created could be more like 550 — not 22,000, he says.

“It’s unlikely they’d get even 3 percent of what they’re claiming if they do build I-73. What we have here is a situation where apparently nobody else has checked these numbers because they were so happy.”

Stickler tried to communicate what he’d discovered.

“I’ve given a copy of my critique of the Chmura report to politicians, the DOT commission — I’ve sent it to anybody and everybody, because they want to build that damn road… Nobody has ever rebutted my analysis. I’ve invited them to. They think, ‘If we ignore this guy, he’ll go away.’

“That’s just wrong.”

On Tuesday, Rice and U.S. Senator Lindsey Graham met with federal Department of Transportation Secretary Elaine Chao, looking for I-73 funding. On his Facebook page, Rice wrote:

While we have the I-73 permit in hand, we still need to work on funding. Today U.S. Senator Lindsey Graham and I took our case to the top and made the argument for I-73 to U.S. Department of Transportation Secretary Elaine Chao. I-73 is an investment with unparalleled benefits, including:
Jobs: it will create 29,000 new jobs in South Carolina
Economic Impact: it will add $2 billion to the local economy
Revenue: it will generate $1 billion in local & state tax revenue

 

In a way, the question here, the one that Stickler raises, is not whom you’re going to believe but how lucky you feel.

When the legislature got the gas tax increase it wanted earlier this year, it swore that this time, the roads would be fixed. That tax goes into effect Saturday, the first in a series of hikes over the next six years.

Should the roads not get fixed, which is certainly a possibility, it’s hard to imagine the money will be refunded or the tax lowered, because the funds most likely will be gone — funneled in part, at least, to new roads construction, although the DOT commission maintains none will go to I-73.

Should $4 billion of someone’s money be spent on a new highway and just a few hundred jobs are created, no one will un-build that road.

Nerve stories are always free to reprint and repost. We only ask that you credit The Nerve.

 

  • Philip Branton

    As a Civil Servant…..all I can say is… “My Backside”…!
    This I-73 report is like a pension planner telling Bellsouth employees that everyone just loves your phones in their homes and failing to tell them about Apple iPhone factories under construction in China at the time. How mad should the Bellsouth employees have been.? Geez, as if any of the homeowners whose land will be used really have a clue what they are giving up. It’s like our native Indian tribes being marched to Oklahoma and being swindled out of the OIL they were never told of after they were forced to move there.
    Every civil servant in the SC-DOT had better get a clue of what is possible and stop taking lip from Hugh Leatherman. This is not a freaking highway……. It is a huge natural gas pipeline right of way that the landowners have no clue about. I boldface dare anyone at SC-DOT look at an energy map of Michigan and not realize what landowners are not being told. The entire state of Michigan is sitting on what type of energy and this Nerve website fails to disclose this FACT..?
    This is grounds for empeachment for every official involved for lack of ethical informational taxpayer integrity.

    I boldface offer my Civil Servant career to this article omission for evidence to this future Grand Jury summoned by Solicitor “fiasco” Pascoe…….

    This is a total lack of informational duty……

    https://uploads.disquscdn.com/images/0b9119b3077969f0329a1b658e655d863150b286ceceb66ee98c99f23ef1a4b1.jpg

  • Philip Branton

    Dear Solicitor “fiasco” Pascoe,
    Sir, with all due respect, do you dare wonder if an Army Corp of Engineers civilian who worked to approve the easement of I-73 was ever made aware of the huge natural gas deposit under the state of Michigan? How would email between the US Army Corps of Engineers and the Department of Energy be used to find out who knew what and when?
    Solicitor, are you going to stand by and allow the taxpayers of SC get swindled again like taxpayers have with BOEING and VC Sumner..? It’s one thing to build a highway but to boldface keep taxpayers in the dark about the domino Motives is totally unacceptable. It is downright criminal..!!
    Wake up Solicitor…….our troops deserve better than this. https://uploads.disquscdn.com/images/4eb445a55df7a08dbe1c12f8b4b3e1c56dfd4ffa6ed69873e1a07f98c57ef632.jpg https://uploads.disquscdn.com/images/75a99ab2882bf4c8c6a33bddc9fd436c2d8a4946f257ea73c5843b0437c095a8.jpg

  • Philip Branton

    Dear US Senator Lindsey Graham….

    Shouldn’t the funding for I-73 come from the taxes on Natural gas along the same easement instead of raising taxes or borrowing from the Chinese…?
    Senator, you may want to give Tom Davis or Charlie James a call on WTMA.

    This article may come back to boomerang you….

    FYI…..

  • Philip Branton

    Dear Hugh Leatherman,

    How far back can you get a copy of your email..?

    “…… 1991 – US Congress passed (ISTEA) Intermodal Surface Transportation Equity Act and identified Interstate 73 as a high priority route from Detroit to Charleston, SC. Each state would have the flexibility to determine its preferred route location…”

    Hugh, do you ever remember discussions about a LNG terminal..? How would Dubai Ports use gas from South Sudan via Ethiopia to Djibouti to ship or facilitate a LNG Terminal…?

    Hugh, dare to wonder how an Army Corp contract can be written to force every piece of heavy equipment used to build I-73 to use Michigan natural gas instead of diesel? Do you know how long it takes to convert a cement mixer to LNG..?

    Hugh…..if Tesla Lithium batteries are lighter than lead acid then why do NASCAR cars still use Exide Batteries ..? Do any of your cement mixers use Lithium Batteries..yet?

    Hugh…….you had better get yourself down to the SC-DOT.

    LET’S GO….. https://uploads.disquscdn.com/images/a7513e102ea1ab421ab544b9592e578426df3406fa71a47c94f8209e3ba615ab.jpg

  • John Bryan

    According to Wikipedia, Michigan, Ohio, and West Virginia are not particularly interested in this project. So, we will end up with a toll road between Norfolk, Va. and Myrtle Beach.

    https://en.wikipedia.org/wiki/Interstate_73

  • Philip Branton
  • cnb

    I smell Hugh Leatherman

  • ELCID

    Note, South Carolina DOT budgets these projects, roads & bridges based upon only the construction costs. They put zero money into maintenance. Which can cost many times the construction costs over the 1st life of the projects.

    It’s time to show the people the total costs of these projects which includes: 1st construction costs, maintenance labor, maintenance materials, maintenance vehicles, maintenance engineering, maintenance management, additional police, additional electronic & fiber optic lines supervision install and upkeep, etc., etc.

    These projects cost far more than the relatively small amounts they cost to build. And, our gas taxes don’t come close to paying for them all.

    • George

      That’s the problem. We have built more roads than we can maintain now – but we still need more roads. And many new taxes will go to more new roads, which generate more maintenance needs down the road. Maybe a good alternative would be to install RR tracks along the interstate highways, which would allow freight to be hauled by train, thus removing many trucks from the highway, and,as demand allows, provide routes for passenger trains on the more traveled routes.

      • ELCID

        Good points.

        Note: 1 semi-trailer truck does more highway damage than 100 cars. SC has more of these heavy trucks than other states due to the ports in Charleston and Savannah. Yet, the Feds take our Federal Gas Tax money and give the majority of it to other States, i.e. we give more than we get back.

        This needs to stop: Graham, Scott, Clyburn and the rest should be all over correcting this inequity. SC Taxpayers are supporting the rest of the country’s commerce. These trucks are nearly all headed “Out of South Carolina.”

  • George

    The interstate highway system was unconstitutional when built. On recent vacations, especially in the mountains, I’ve wondered how long I would be stuck behind 18-wheelers without that 2nd lane (I remember being in this situation back in the 70’s before I-26 was finished). And when I see so many 18-wheelers anywhere I go on the interstate I realize that, without the interstate highway system most of those goods would be going by rail, so we’d need many more railroad tracks, which would not get auto travelers to their destinations any quicker. In addition loading goods on and off rail cars for distribution to the final destinations would add cost to everything we buy. So we have to take a long term view.

    • Shawn Jones

      If you travel 26 or 95 these days,,,, you will still sit behind those trucks for hours… last trip from Columbia to Chasn was over 2 hours on 26… its too small for the load, 95 is even worse! they both need to be 8 lanes not 4!

      • George

        I feel your pain. I travel from Cola to Chasn via I26 on weekends to visit my son and his family. The slow lane is usually packed with trucks, and there are always the idiots who get in the fast lane only to ride beside an 18 wheeler for miles at 68 mph. We definitely need 6 lanes from Cola to I-95, or at least to Orangeburg.

  • BillyT

    You can’t imagine how easy it is to take the taxpayer’s money and spend it on your pet projects. That is, if you are Hugh Leatherman and a few others.

    They must laugh themselves to sleep at night, thinking what fools we are.