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Application for

Tolling & Pricing

For I-73 in South Carolina

Phase II Application for

SAFETEA-LU Section 1604(c)

Prepared in Partnership with the

South Carolina Division,

Federal Highway Administration,

U.S. Department of Transportation

June 2007

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**Table of Contents**

Executive Summary
...............................................................................................................
Page 4

Phase II Application

Vision
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Page 5

Corridor Information
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Page 5

Proposed Project Timetable
................................................................................
Page 7

Partners
.......................................................................................................................
Page 7

Environmental Data
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Page 8

Toll Information
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Page 9

National Impact
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Page 12

Mobility Improvements
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Page 13

Economic Benefit
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Page 17

Summary
.....................................................................................................................................
Page22

***EXECUTIVE SUMMARY***

South Carolina is seeking tolling authority for a new interstate
facility, Interstate 73, as provided for under SAFETEA-LU Section
1604(c). This authority would allow construction of the 80-mile facility
that is beyond the capability of South Carolina Department of
Transportation's current or anticipated financial resources.

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Figure ES-1

As illustrated in **Figure ES-1**, the facility being offered for
consideration is in the northeastern corner of the state running from
the Myrtle Beach area to the North Carolina/South Carolina state line in
Marlboro County. Interstate 73 is a new highway first planned in 1991 as
part of High Priority Corridor 5 as defined by the Intermodal Surface
Transportation Efficiency Act of 1991 (ISTEA). Amendments to the routing
of Interstate 73 occurred in 1995 with the passage of the National
Highway System Designation Act and in 1998 with the passage of the
Transportation Efficiency Act for the 21st Century (TEA-21).

The proposed Interstate Route 73 corridor in South Carolina will merge
with the existing I-73 route in North Carolina that will eventually
extend to Michigan. Nationally, the project is supported by a five-state
coalition of public and private entities working under the auspices of
the National I-73 Corridor Association. To date, Congress has provided
approximately \$81 million in high priority federal funding to SCDOT.
The project has widespread support in South Carolina. The South Carolina
General Assembly has enacted legislation that would allow tolling of the
route, but federal regulations prohibit tolling of an Interstate
facility while using federal funds without gaining a special exception
from the U.S. Secretary of Transportation as provided under SAFETEA-LU,
Section 1604 Tolling.

***VISION***

SCDOT's vision is to complete ***Interstate*** ***73 in 10*** years:
three years for environmental approvals and seven years for
right-of-way, design, and construction. Interstate 73 officially began
in August 2004, with the Notice of Intent to prepare an Environmental
Impact Statement for the southern segment of the project. This EIS will
be completed in approximately three years, and construction could begin
as early as 2009. South Carolina's legislature, its U.S. Congressional
delegation and the citizen's of South Carolina are committed and
supportive of moving forward with I-73 as rapidly as possible.

Horry County is the most populated county in the State not served by an
interstate highway. I-73 would provide this needed connection for the
highly popular tourist destination, Myrtle Beach, and at the same time,
also provide a much needed hurricane evacuation route.

South Carolina is seeking tolling authority for a new interstate
facility to bring this vision to reality. The authority would allow
construction of the corridor that is beyond the capability of SCDOT's
current or anticipated financial resources.

SCDOT has a demonstrated record of success in innovative financing and
contracting as exemplified by its \$5.3 Billion ***27-in-7 Accelerated
Construction Program*** now nearing completion. More than 200 projects
that would have been otherwise been programmed out over 27 years were
delivered years ahead of schedule allowing the public to drive on
tomorrow's roads today. These projects, including the Cooper River
Bridge, Conway Bypass and Carolina Bays Parkway, could not be afforded
at today's prices under traditional pay-as-you-go financing. SCDOT
estimates that ***27-in-7*** saved well over \$3 Billion by avoiding
future escalation costs.

SCDOT completed ***27-in-7*** and other major projects in partnership
with FHWA using public-private and local partnerships, innovative forms
of design/build contracting, Construction and Resource Management
contracts, SCDOT bonding authority, a TIFIA loan and the South Carolina
State Transportation Infrastructure Bank that has now financed over \$3
Billion of infrastructure projects and is larger than all other SIBs in
the United States, combined.

***CORRIDOR INFORMATION***

I-73 is a national highway project that will provide a transportation
corridor from Michigan to South Carolina. The proposed I-73 facility
would be a high speed, divided, fully controlled access roadway that
would require interchanges for access. The national I-73 project starts
at Sault Ste. Marie, Michigan, and proceeds through portions of Ohio,
West Virginia, Virginia, and North Carolina, before terminating near the
Myrtle Beach, South Carolina area.

The I-73 Corridor was identified as a High Priority Corridor by the
United States Congress in the Intermodal Surface Transportation
Efficiency Act (ISTEA) of 1991. Congress designated high priority
corridors as those that would provide the most efficient way of
integrating regions, linking major population centers of the country,
providing opportunities for increased economic growth, and serving the
travel and commerce needs of the nation. The corridors that Congress
designated were to be included in the National Highway System. Congress
instructed the FHWA, along with the states, to develop long-range plans
and feasibility studies for these corridors, and focus federal funds
towards these areas for road construction.

The Transportation Equity Act for the 21^st^ Century (TEA-21), enacted
in 1998 by Congress, built on what ISTEA had established by continuing
and improving existing programs, while establishing new initiatives.
TEA-21 shortened the I-73/I-74 High Priority Corridor by changing its
terminus from Charleston, South Carolina, to the general vicinity of
Myrtle Beach, Conway, and Georgetown, South Carolina.

The Safe, Accountable, Flexible, Efficient Transportation Equity Act: A
Legacy for Users (SAFETEA-LU) was passed by Congress and signed into law
on August 10, 2005. SAFETEA-LU acknowledges the prior purpose for, and
designation of, I-73 as a High Priority Corridor, along with designating
it as a project of "national and regional significance" (23 U.S.C.
§101(2005)). In addition, SAFETEA-LU provides dedicated high priority
funding for the I-73 project in South Carolina. At the State level,
Concurrent Resolution H 3320 passed by the South Carolina General
Assembly in 2003 states "that the members of the General Assembly
express their collective belief and desire that the Department of
Transportation should consider its next interstate project as one that
provides the Pee Dee Region with access to the interstate system." Both
Congress and the South Carolina General Assembly have appropriated money
to SCDOT to study the potential corridor for the proposed I-73.

The state of Michigan has already upgraded existing roads to interstate
standards and has one 50-mile segment remaining to construct. Twenty
miles of this segment has received funding to complete design and begin
purchasing right-of-way. Since the route would follow existing roadways
along the I-73 corridor, Ohio has decided not to construct a new
facility for I-73. Instead, Ohio is addressing individual congestion
issues along the existing roadways. West Virginia has completed a small
portion of I-73, also known as the King Coal Highway and Tolsia Highway.
West Virginia is waiting for additional funding prior to completing the
I-73 corridor project. Virginia has completed a Final Environmental
Impact Statement (EIS) for its portion of I-73 that was approved by the
Federal Highway Administration (FHWA) on December 1, 2006. FHWA issued a
Record of Decision (ROD) for the I-73 Final EIS in Virginia on March 30,
2007, allowing the final design process to begin for the project. The
Virginia Department of Transportation is currently re-signing the
portion of I-73 along the existing roadway and will proceed with
construction of I-73 on new alignment as funding becomes available.
North Carolina has also completed portions of I-73 by the re-signing of
existing roads to interstate facility. The North Carolina Department of
Transportation (NCDOT) is currently completing environmental analyses,
planning phases, and right-of-way acquisitions for its portion of I-73
on new alignment.

Interstate 73 in South Carolina is a new construction corridor that will
extend through Marlboro, Dillon, Marion, and Horry Counties. The entire
length of the project will be approximately 105 miles (80 miles of new
construction and 25 miles of the existing Veterans Highway, S.C. Route
22). The I-73 corridor is currently listed as number five on the
National Highway Systems High Priority Corridors list.

A South Carolina corridor feasibility study was conducted in 1994 after
ISTEA was approved. It identified the I-73/I-74 corridor as a high
priority. This study evaluated the upgrading of existing roads starting
at the North Carolina state line at U.S. Route 1 in Marlboro County,
going through Dillon, Marion, Horry, Georgetown, or possibly
Williamsburg and Berkeley Counties, and ending on the U.S. Route 17
corridor near the city of Charleston, South Carolina in Charleston
County.

A second feasibility study was completed by SCDOT for I-73 in South
Carolina in June of 2003. The study was done in response to the change
of the I-73 terminus from Charleston, South Carolina, to the Myrtle
Beach, South Carolina area by TEA-21. The study cited the needs for I-73
as fulfilling congressional intent and providing an interstate link to
the Grand Strand area along with the benefits of improved hurricane
evacuation, improved capacity for vehicular and freight movement in the
area, and support of population and economic growth.

The feasibility study recognized that there had been some improvements
to roads in the project study area; however, the improved roads were
predicted to have capacity problems along some segments by the year
2025, based on traffic modeling. Future traffic projections indicated
that I-73 would divert traffic from existing roadways, thereby improving
capacity and reducing traffic congestion.

Two typical sections were developed to accommodate the number of lanes
needed for the future traffic volumes, as well as a multimodal rail
corridor. An interim design, was developed that would be initially
constructed to accommodate two lanes of traffic in each direction. In
the future, when traffic volumes increase to a point that additional
lanes are necessary in order to maintain an acceptable level of service,
an additional lane in each direction could be added to the median. This
ultimate design would accommodate three lanes of traffic in each
direction.

***PROPOSED PROJECT TIMETABLE***

South Carolina began the environmental process required for construction
of Interstate 73 in August 2004 . For environmental purposes, the
project has been divided into northern and the southern segments,
approximately 40 miles each with independent utility. The Record of
Decision for the first EIS, I-73 South, is anticipated in August 2007.
The I-73 North Record of Decision is anticipated in mid-2008. The
schedule for completion of the design and construction will depend upon
the method of project delivery selected. It is anticipated that all or
portions of I-73 could be under construction as early as 2009 using
design/build contracting and substantial financing through
public-private partnerships and other sources. Depending on the
construction and financing methods used, South Carolina could have a
fully functioning toll operation in approximately seven (7) years.

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***PARTNERS***

South Carolina Department of Transportation (SCDOT) and Federal Highway
(FHWA) have developed a three-tiered approach for public involvement,
which includes agency involvement through the formation of the Agency
Coordination Team (ACT), special interest and local involvement through
the Stakeholder Working Group, and public input through meetings,
mailings, a website, and a telephone hotline. The public, agencies, and
other interested parties or groups (such as local governments and
organizations) have extensive project involvement during this ongoing
process.

The ACT is an enhancement of the cooperating agency process found in 40
C.F.R. §1501.6 and SAFETEA-LU. Lead agencies, in this case, SCDOT and
FHWA, are those with the primary responsibility for the project. The
lead agencies can invite other agencies that have special expertise or
jurisdiction by law over a resource to be cooperating agencies. Due to
the large study area and array of resources, SCDOT and FHWA invited many
partners:

-   NOAA \-- National Oceanic and Atmospheric Administration

-   NRCS \-- Natural Resources Conservation Service

-   SCDAH \-- South Carolina Department of Archives and History

-   SCDHEC \-- South Carolina Department of Health and Environmental
    Control

-   SCDHEC-OCRM \-- South Carolina Department of Health and
    Environmental Control, Office of Coastal Resource Management

-   SCDNR \-- South Carolina Department of Natural Resources

-   SCDOC \-- South Carolina Department of Commerce

-   SCEMD \-- South Carolina Emergency Management Division

-   SCPRT \-- South Carolina Parks, Recreation, and Tourism

-   USACE \-- United States Army Corp Of Engineers

-   USCG \-- United States Coast Guard

-   USFWS \-- United States Fish and Wildlife Service

-   USEPA \-- United States Environmental Protection Agency

Since the South Carolina portion of I-73 includes approximately four
miles of roadway in the state of North Carolina, federal resource
agencies in North Carolina agreed that their South Carolina counterparts
would be the lead for their agencies in that section of the project. The
North Carolina state agencies had separate interagency meetings and
discussed the issues that were relevant to their area. The ACT enhanced
the cooperating agency process by allowing extensive agency involvement
and collaboration on the project. The ACT had approximately 27 meetings
to discuss the Southern and/or Northern projects. The main goals of the
ACT were the following:

> To increase agency involvement;
>
> To reach decisions by consensus;
>
> To improve efficiency of the NEPA process;
>
> To meet or exceed agency mandates; and
>
> To improve communications and relationships between agencies.

The public has been involved extensively throughout the development of
environmental documents for the Southern segment. Several public
meetings were held. The meetings included scoping meetings and
information meetings:

-   Public Scoping Meeting -- September 18, 2004 in Mullins, SC;

-   Public Scoping Meeting -- September 21, 2004 in Conway, SC;

-   Public Information Meeting -- March 8, 2005 in Dillon, SC;

-   Public Information Meeting -- March 10, 2005 in Myrtle Beach, SC;

-   Public Information Meeting -- March 22, 2005 in Aynor, SC;

-   Public Information Meeting -- May 3, 2005 in Mullins, SC;

-   Public Hearing -- June 15, 2006 in Aynor, SC;

-   Public Hearing -- June 20, 2006 in Mullins, SC; and,

-   Public Hearing -- June 22, 2006 in Dillon, SC.

The public has also been involved throughout the Northern segment.
Several public meetings have been held, including the following scoping
and information meetings:

-   Public Scoping Meeting in Bennettsville, SC -- August 30, 2005;

-   Public Scoping Meeting in Hamlet, North Carolina -- November 28,
    2005;

-   Public Information Meeting in Bennettsville, SC -- September 7,
    2006; and,

-   Public Information Meeting in Hamlet, North Carolina -- September
    12, 2006.

A telephone hotline and a website have been available since June 2004,
for the public to view information and comment on the project. All of
the public meetings have been advertised in local newspapers. Community
information meetings were also held throughout the project study area in
an effort to reach out to local citizens, minority populations, and
other community groups.

***ENVIRONMENTAL DATA:***

For the purpose of completing the environmental work for I-73, it was
separated into two segments. For the southern I-73 project area, from
I-95 to the Myrtle Beach terminus, the Draft Environmental Impact
Statement was approved in May 2006. The Final Environmental Impact
Statement for the southern project is on schedule to be approved
shortly. For the northern I-73 project area from I-95 to the South
Carolina/North Carolina state line, the Draft Environmental Impact
Statement is scheduled to be complete in July 2007, with the Final
Environmental Impact Statement scheduled to be complete by mid-2008.

The wetland delineation, protected species survey, and cultural resource
survey have all been completed and are awaiting agency approval for the
southern project area. These tasks will be completed for I-73 North
within the next several months. Once they have been completed for I-73
North, a Section 404 (wetland) permit application can be submitted.

***TOLL INFORMATION***

The South Carolina Legislature has enacted legislation approving the
tolling of I-73. Act 228 of 2006, states:

> ***"the Department of Transportation may impose and collect a toll on
> the proposed I-73 corridor upon completion of this highway project.
> This toll must be used to pay for the cost of planning, right-of-way
> acquisitions, financing, construction, operation, and other expenses
> associated with this highway project, and for the removal of the tolls
> upon payment of all such costs."***

The Governor, both US Senators, and several members of Congress have
publicly endorsed the tolling of this Interstate. Although I-73 has been
designated to receive approximately \$100 million dollars in
Congressional High Priority funding and an additional \$2.5 million
dollars in state funding from the South Carolina General Assembly,
sufficient funding to complete this project has not been identified.

Traditionally, roadway construction has been financed using the money
raised by highway user fees levied on fuel. Historically, the federal
government provided the largest share of the funding, typically 80 to 90
percent, while the state and/or local governments provided the balance.
The projected highway needs for South Carolina total more than \$59.7
billion over the next twenty years (2005 dollars). The FHWA funding
projections for South Carolina over that time are \$10.5 billion and
state highway funding projections are roughly \$8.9 billion. This leaves
a projected funding shortfall of more than \$40 billion dollars. SCDOT,
along with the Metropolitan Planning Organizations (MPO) and Councils of
Governments (COG), has identified interstate improvement and
construction projects throughout the state. These needed interstate
improvements, which include widening existing interstates, improving
existing interchanges, and construction of new interstates, are
estimated to cost approximately \$10.5 billion (2005 dollars, I-73 is
one of the projects listed) over the next 20 years.

The gap between state needs and the available funding is not unique to
South Carolina. High infrastructure demands nationwide have led to a
wide disparity between the cost of roadway improvement needs and the
amount of money available for financing projects. This has resulted in a
movement toward the use of innovative finance techniques and other
methods of project delivery such as the design/build approach. In an
effort to take advantage of every opportunity to attract the funds
necessary for the project, all available means to provide the financing
for this project will be explored.

Congress has also recognized this gap and has enacted changes in federal
legislation to permit the use of innovative financing. Previous highway
bills began addressing innovative financing by permitting the
establishment of State Infrastructure Banks (SIB's) which allow the use
of federal funds to make loans to projects requiring additional funding
to advance the projects in a timely manner. South Carolina has the most
successful SIB in the country, assisting in the financing of more than
\$3 billion of projects in the state. However, these loans require some
form of revenue to pay debt service over the life of the bonds, which
are issued by the bank. Loan repayments have included local fees and
taxes as well as state truck registration fees, gas tax, and future
federal highway funds.

Another useful financing tool has involved the establishment of loan and
credit assistance programs under the Transportation Infrastructure
Finance and Innovation Act (TIFIA). This program provided a much needed
federal loan which allowed construction to begin on the Arthur Ravenel,
Jr. Bridge in Charleston, for example. The funds to repay the loan
included a combination of future state highway funds, local county
funds, and funds from the State Ports Authority.

The advent of innovative financing tools has generated more interest in
the use of tolls as a financing mechanism in many parts of the United
States. Until recently, tolls were not allowed on interstate facilities
except on new highway bridges or tunnels. A major change occurred as a
part of the 1998 highway bill (TEA-21), which established the toll pilot
program. This program allowed tolling on up to three existing interstate
facilities to fund needed construction or rehabilitation on interstate
highway corridors that could not otherwise be maintained or improved.

SAFETEA-LU (passed in 2005) provides states an opportunity to allow
tolling on new facilities that use federal funds (Section 1604(c),
Interstate System Construction Toll Pilot Program).

-   States or interstate compacts of states may apply;

-   Tolling must be the most efficient and economical way to finance the
    project;

-   Automatic toll collection is required (see later discussion of toll
    collection);

-   There may be no requirement to block improvements to competing
    facilities;

-   Revenues may only be used for debt service, reasonable rate of
    investment of private equity, and for operation and maintenance
    costs.

Innovative ways of financing roadway construction are currently being
utilized throughout South Carolina, including the issuance of bonds that
are paid back over time to pay for the construction of projects. These
bonds can be paid back in a variety of ways. Though the state does not
have the ability under state law to issue GARVEE bonds, federal funds
are in fact being used to repay state bonds. Many localities are also
joining in funding projects that would have previously been funded
entirely by the state. One example is the hospitality fees Horry County
used to match State Infrastructure Bank funds to construct the Road
Improvement and Development Effort (RIDE) program. Several counties have
enacted local option sales taxes to assist in meeting highway
transportation demands, including York, Beaufort, Horry, Aiken,
Florence, Dorchester and Charleston Counties. SCDOT has also constructed
the first road in the state funded with revenues from tolls (the Cross
Island Expressway on Hilton Head Island) and licensed a private entity,
the Connector 2000 Association (a 401C(3) corporation), to build and
operate a second toll road, the Southern Connector in Greenville County.

Public-Private Partnerships (P^3^) have recently been recognized as an
important tool for transportation agencies seeking funds to build and
operate facilities. Section 57-3-200 of South Carolina state law allows
the use of P^3^ agreements. The state of South Carolina has already used
this approach with the Southern Connector and will certainly consider it
again with I-73.

A recent innovation in the United States has been the sale of a
"concession" to private entities to finance, design, and operate toll
facilities. This P^3^ method provides a private organization the
opportunity to obtain a lease to build and/or operate a roadway facility
for a period of time. To date, concessionaires have been European or
Australian investors who have acquired a portfolio of toll facilities in
those countries which are anticipated to provide sizeable returns on
investment over a long period (i.e. 75 to 99 years). The stability
provided by the portfolio as a whole has attracted large investors, such
as pension funds, which heretofore have not been attracted to toll road
investment. In most cases, the facility is or will be a toll road that
provides the long-term return on investment.

In some cases, especially with pre-existing facilities, the concession
has been deemed of such value that the concessionaire has provided the
owner an up front payment for the long-term lease. An example of this is
the Chicago Skyway, where a private firm paid over \$1.8 billion for a
99-year lease to operate the facility. The amount paid for a concession
is directly related to the amount of money anticipated to be generated
over the life of the lease. A second example involves the construction
of a new facility in Texas. The Trans-Texas Corridor Initiative has
resulted in an agreement with a concessionaire giving them the right to
finance and construct \$6 billion in infrastructure projects (toll
roads) in the I-35 corridor. In return, the concessionaire is to pay
\$1.2 billion for the concession rights. It should be noted that the
creation of such a concession often entails restrictions on improvements
to competing routes to protect the potential revenue stream for a leased
facility. In lieu of the prohibition against competing routes, states
may have to agree to pay damages when competing routes are created.
These examples are among only a few throughout the country and the world
that provide the opportunity for such a large up front payment to the
owner. However, that approach may be applied to construction of I-73.

There appear to be five general approaches to financing I-73:

> 1\. Traditional financing with 80% federal and 20% state or local
> funding;
>
> 2\. Publicly issued bonds backed by future revenue; either from
> federal funding, toll revenue, local funds or some combination of the
> three;
>
> 3\. A combination of 1 and 2;
>
> 4\. A public/private partnership involving some level of private/
> public funds; and,
>
> 5\. Use of the concession approach involving a lease to a private
> entity in return for the right to finance, design, and build the road,
> perhaps including collateral development opportunities within the
> right-of-way.

The last four options would probably involve toll financing. Each of
these financing mechanisms is dependent upon the potential future
revenues, either from federal allocations, other taxes, or tolls.

The amount of money that can be borrowed is limited by projections of
these future revenues. An evaluation of the potential toll revenues,
called an investment grade toll study, is a way to project the future
revenues. It would be performed by the entity interested in financing
the project. The revenue obtained by tolling can vary depending upon the
toll rate, traffic volume, and competing un-tolled routes. These factors
are often interrelated, i.e. the availability of competing routes can
affect the traffic volumes on a tolled facility.

The method of tolling can also affect the toll revenues. For example, a
"closed system" with a toll required at most entrances and exits along a
road would normally generate more money than an "open system" with a
limited number of toll booths at specific locations. The closed system
would generally involve traditional toll booths where users pay cash by
the trip and could also contain electronic toll lanes which accommodate
frequent users who can pay tolls electronically without the delay of
stopping at a toll booth. An open system would eliminate cash booths and
would require all users to have an electronic toll tag. Clearly this
presents a problem on a facility like I-73 that will have a significant
number of non-local users. In the future, many anticipate a regional or
even national system of electronic toll tags which can be used at all
toll facilities in the region or ultimately in the United States. This
would make the open system more attractive. Finally a discount for local
traffic, either based upon number of trips per month or use of an
electronic transponder, would affect projected revenue.

***NATIONAL IMPACT:***

I-73 will provide linkage to facilitate the movement of people and goods
to and from South Carolina via the interstate highway system. The
current roadways through the project study area are subject to frequent
stop and go situations and heavy congestion during peak traffic
conditions. This project would provide a corridor for moving goods
between the Southeast and the Midwest United States more efficiently and
greatly reduce the congestion on local roads, which would reduce the
travel and delivery times for commercial freight.

Completion of an additional interstate in the US will allow goods to
move to and from markets and ports in the south with delivery reaching
into Canada. In addition, I-73 provides an opportunity to address a
significant link lacking in the interstate system in South Carolina.
Horry County is the most populated county in the State not currently
served by an interstate highway. The proposed project would provide a
needed connection between the highly popular tourist destination of
Myrtle Beach and the interstate system at I-95, with further connections
including NC 74 leading to the Charlotte metropolitan area. It would
also provide an interstate link to Marion County.

According to the 2006 Myrtle Beach Statistical Abstract, there were an
estimated 13.2 million visitors to the area in 2004. Approximately 81
percent of the visitors travel to the area via automobile from within
South Carolina; from surrounding states such as North Carolina,
Kentucky, New York, Pennsylvania, and Ohio; and from the eastern
Canadian provinces. In 2004, the American Automobile Association (AAA)
ranked Myrtle Beach fourth in the United States as a driving
destination, behind the major metropolitan areas of Orlando, Florida;
Anaheim, California; and Las Vegas, Nevada. Myrtle Beach is the only one
of these destinations not served by at least one major interstate.

***MOBILITY IMPROVEMENTS***:

Reaching the destination with efficiency and ease is a part of the
overall vacation experience. By providing a controlled-access interstate
facility, the efficiency of traffic flow through the I-73 corridor would
be improved. Local mobility is a key for the tourist traffic to/from
Myrtle Beach. Over 80 percent of visitors travel to Myrtle Beach by
automobile. This large number of visitors arriving to the area by
vehicle congests the local transportation network. Traffic diverted to
I-73 would reduce congestion on local roads. The American Automobile
Association, along with the American Highway Users Alliance and The Road
Information Program, released a study in 2005 locating the top summer
traffic bottlenecks in the country. These bottlenecks were based on
information from the FHWA, state departments of transportation, and the
travel and tourism industry. The drive between I-95 and the Myrtle Beach
area on U.S. Route 501 was listed as 23rd in the top 25 for vacation
travel delays and congestion. The proposed project would enable tourists
to access the area more efficiently and provide a high-speed access
route to the region.

Access to the Myrtle Beach area for out-of-state travelers is critical
to maintain the economy of the state. Approximately 32 percent of the
8.5 billon dollars spent by tourists in the state in 2005 was in Horry
County. In 2004, almost 70 percent of those employed in the Grand Strand
area were in retail and wholesale trade, and service industries.
According to the 2006 Myrtle Beach Statistical Abstract, there were an
estimated 13.2 million visitors to the area in 2004, and each spent an
average of \$101.76 per person per day. Approximately 81 percent of the
visitors, 10.3 million, travel to the area via automobile. In 2004, the
American Automobile Association (AAA) ranked Myrtle Beach as the fourth
most popular driving destination in the United States, behind the major
metropolitan areas of Orlando, Florida, Anaheim, California, and Las
Vegas, Nevada. Myrtle Beach is the only one of these areas not directly
linked to a major interstate corridor.

Tourism is based on the concept of a location being a desirable vacation
destination. The Atlantic Ocean and abundance of golf courses,
entertaining venues and shopping opportunities add to the attraction of
the Myrtle Beach area as a destination of choice. Reaching the
destination with efficiency and ease is a part of the overall vacation
experience. According to the 2006 Myrtle Beach Statistical Abstract, the
top ten states of visitor inquiry origin in 2002 included North
Carolina, New York, Pennsylvania, Ohio, Virginia, South Carolina,
Tennessee, Georgia, New Jersey, and Maryland. The proposed project would
enable tourists from these and other states to access the area more
efficiently.

State roads provide current access through these counties between the
I-73/I-74 Corridor in North Carolina and the portion of proposed I-73
between I-95 and the Myrtle Beach area. The northern segment of the SC
I-73 project would link the southern portion of I-73 to the I-73/I-74
Corridor, which would provide interstate access throughout the entire
northeast portion of South Carolina and beyond to the Myrtle Beach area.
This access would allow visitors to reach their vacation destinations in
the eastern portion of South Carolina more easily.

Safety is a concern on roadways, especially those with unfamiliar
drivers and commercial traffic as well as uncontrolled access and
frequent stop and go conditions. This project would improve safety on
the current roads by reducing the volume of traffic on them and provide
a route with more consistent speed and capacity for local, out-of-state,
and commercial traffic into and throughout the project study area. Most
highways in the project study area are two-lane roads not divided by a
median or barrier. Some portions of these roads have been upgraded to
four-lane highways; however, these roads do not meet the safety
standards of an interstate. The current roads in the project study area
have uncontrolled access, which means cars can enter and leave along
these roads where curb cuts are provided, at side roads and driveways.

Traffic congestion in the United States is expected to increase 400
percent on urban freeways by 2020. The United States Department of
Transportations (USDOT) found that in 2003, Americans lost 3.7 billion
hours sitting in traffic jams. Traffic congestion is not limited to
urban areas. Rural roadways leading to popular tourist destinations also
experience congestion during peak seasons. One need is to provide a
corridor to accommodate a future multimodal facility. By providing for a
multimodal facility, future visitors could be served by high-speed rail
rather than by car or airplane. Although at this point in the planning
process a specific multimodal component has not been designated, the
proposed project provides additional right-of-way corridors that will
allow for future rail facilities.

Hurricane evacuation is a concern for the Myrtle Beach region due to the
dramatic increase in the resident population and the coinciding tourist
and hurricane seasons. The region is currently served by three
designated hurricane evacuation routes that connect U.S. Route 17 to
I-95: S.C. Route 9; U.S. Route 501; and U.S. Route 521. In addition,
U.S. Route 378, designated as a hurricane evacuation route, connects to
U.S. Route 501 in Conway.

Horry County had a permanent population of 196,629 people in 2000.
According to South Carolina Department of Parks, Recreation, and Tourism
(SCPRT), Horry County's resident population, combined with its tourists,
equated to an average population per day of 296,809. In the event of a
natural or man-made threat, Horry County would need to evacuate both the
resident and tourist populations. Approximately 300,000 people
attempting to leave an area via the current evacuation routes would
result in a strain of the existing facilities. The addition of a
four-lane interstate system would help reduce the time for evacuation
giving emergency preparedness officials a much improved margin of error.

The 2003 *South Carolina Hurricane Plan,* completed by South Carolina
Emergency Management Division (SCEMD), contains evacuation estimates for
the Northern Coastal Conglomerate that encompasses Clarendon,
Darlington, Dillon, Florence, Georgetown, Horry, Lee, Marion, Marlboro,
Sumter, and Williamsburg counties, and in turn, the project study area.
As stated in the 2003 Plan:

> *"**Clearance times generally fall below 24 hours...however, due to
> the limited road network and the large numbers of tourists and
> permanent residents who would have to evacuate in the northern
> conglomerate, times could potentially exceed 26 hours for a Category
> 4-5 hurricane, high tourist occupancy scenario."***

Within the Northern Coastal Conglomerate, two major bottlenecks occur on
U.S. Route 501. One bottleneck occurs on U.S. Route 501 between U.S.
Route 17 Bypass and Conway that causes an increase in evacuation time.
Lane reversal is feasible on a portion of U.S. Route 501; however, it
results in negligible clearance time reductions because the other major
bottleneck that controls clearance time on this road (U.S. Route 501 at
Aynor) is "upstream" of the reversal area. The proposed project would
provide a four-lane controlled-access interstate facility for which the
lanes could be reversed, as opposed to U.S. Route 501, which is not a
controlled-access facility. This would easily provide a more efficient
evacuation route than is currently in place and is anticipated to
relieve pressure on other evacuation routes currently running at
capacity.

A study was completed **(See Figure 1)** to analyze what impacts the
I-73 corridor would have to the efficiency of evacuating residents and
tourists from the Myrtle Beach area during the threat of a hurricane
coinciding with high tourist occupancy rates. The same model used by
SCEMD to study hurricane evacuation scenarios was used to perform this
analysis. The study looked at evacuation times for 2005 along U.S. Route
501, as it is the primary evacuation route for the largest number of
people in the region has the greatest bottlenecks, and it would be the
most relieved if I-73 were constructed. The study compared evacuation
times for the year 2005 and the year 2030 with and without I-73, and if
lanes were reversed on I-73, including the Veterans Highway (S.C. Route
22) section.

![](media/image6.wmf)

Figure 1

If I-73 is constructed, and assuming high tourist occupancy, the time
for evacuation along U.S. Route 501 would reduce by 10.9 hours for a
Category 4-5 and high tourist occupancy with the addition of traffic
evacuating along I-73. If lanes were reversed on I-73 and the Veterans
Highway (S.C. Route 22) then the evacuation time would reduce by 15
hours on U.S. Route 501 for a Category 4-5 storm and high tourist
occupancy. Evacuation time along S.C. Route 9 would also benefit by
decreasing 2.9 hours with I-73 present and by 4.3 hours if lanes were
reversed on Veterans Highway and on I-73.

If I-73 were not built, the evacuation time in 2030 on S.C. Route 9
would be greater than 15 hours while evacuation time could exceed 37
hours in a worst-case scenario (Category 4-5) on U.S. Route 501. With
clearance times this long, the decision to evacuate would have to be
made early in the hurricane watch period before the National Hurricane
Center has reliable data to make predictions concerning storm track or
hurricane intensity. This could result in needless evacuations of
residents and tourists, which would hurt the region's economy.

I-73 would provide another route for evacuation and reduce clearance
times along U.S. Route 501 by over ten hours. The southbound lanes of
I-73 and the Veterans Highway (S.C. Route 22) could also be reversed,
allowing more cars to evacuate at the same time.

With lane reversal, evacuation time would be reduced by an additional
four hours along U.S. Route 501 and an additional ten hours on I-73. The
potential overall savings in evacuation time could be up to 18 hours in
a worst-case scenario (Category 4-5 and high tourist occupancy).

On October 20, 1992, under ISTEA, the USDOT announced the designation of
the Southeast High-Speed Rail (HSR) corridor connecting Charlotte, North
Carolina, Richmond, Virginia, and Washington, District of Columbia. On
December 1, 1998, under TEA-21, the Southeast HSR corridor was extended
from Charlotte, North Carolina, through Greenville, South Carolina, and
Atlanta, Georgia, to Macon, Georgia; and from Raleigh, North Carolina,
through Columbia, South Carolina, and Savannah, Georgia, to
Jacksonville, Florida. HSR, as a mode of transportation, has the
potential to provide an efficient, reliable, safe, and affordable
alternative to highway and airport congestion. In order to implement the
development of the Southeast HSR corridor, the Southeastern Economic
Alliance was created consisting of 16 cities across six Southeast
states. In 1999, the SCDOT Commission passed a resolution in favor of
the Southeast HSR corridor and supporting extensions of the HSR system
to Charleston, South Carolina, and Myrtle Beach, South Carolina.

A Tier I EIS was completed for the corridor between Washington, D.C, and
Charlotte, North Carolina, in 2002, identifying a preferred route for
the rail system. The Tier II Draft EIS for the segment from Petersburg,
Virginia (and possibly Richmond, Virginia), to Raleigh, North Carolina,
is currently underway and is expected to be completed in August 2009
with public hearings scheduled for December 2009. A Tier I EIS has been
prepared for the linking of Hampton Roads and Norfolk, Virginia area to
the Southeast HSR corridor and public hearings are being scheduled.

A feasibility study for high-speed rail between Charlotte, North
Carolina, and Macon, Georgia, was completed in 2004 and concluded that
the most cost-effective design would allow speeds between 79 and 90
miles per hour. The North Carolina, South Carolina, and Georgia
Departments of Transportation are also continuing to study the
suitability and costs of HSR from Charlotte, North Carolina, to Macon,
Georgia.

Because the alignment of the Southeast HSR corridor could come near the
ultimate I-73 corridor, this project seeks to proactively plan for
future transit options by preserving a corridor within the proposed I-73
right-of-way. This rail corridor could provide a connection between the
HSR line and the Myrtle Beach region. The future rail for this project
study area would be limited to a design speed of 79 miles per hour,
which is slightly higher than the proposed design speed of 75 miles per
hour for I-73. Any future rail project would be required to undergo a
separate NEPA analysis and Section 404 permitting process prior to
construction.

***ECONOMIC BENEFIT***:

Marlboro, Dillon, and Marion Counties are some of South Carolina's and
the nation's poorest counties. Unemployment rates are also high for
these counties, with a three-county region unemployment rate of roughly
11.5 percent, the region's unemployment is much higher than South
Carolina's state average of 6.7 percent and the national average of 5.1
percent. Marlboro, Dillon and Marion Counties have three of the higher
unemployment rates in South Carolina. **(See Figure 2 below.)**

![](media/image7.wmf)

**Figure 2:** Source: South Carolina Employment Security Commission,
"Labor Force and Employment Data, 2005"

According to the U.S. Census Bureau, a county is considered poor if more
than 20 percent of its population is below the poverty line. **Figure
3** below displays 2000 poverty estimates calculated by the U.S. Census
Bureau, both Dillon (24.2 percent) and Marion Counties (23.2 percent)
have in excess of 20 percent of their populations living below the
federal poverty threshold. Horry County has only 12 percent of its
population living below the poverty line. The state percentage of 14.1
percent is also lower than both Dillon and Marion Counties.

![](media/image8.wmf)

Figure 3

In 2000, Both Dillon (24.2 percent) and Marlboro (21.7 percent) Counties
were considered poor by this standard, while Richmond County was on the
threshold, with 19.6 percent of its population living below the poverty
level (refer to Chart 1.9, page 1-26). Scotland County had 12.4 percent
of its population living below the poverty level in 2000. All four
counties had higher percentages of their population living below the
poverty level when compared to their respective states, with 14.1
percent of South Carolina's population living below the poverty level,
and 12.3 percent of North Carolina's population living below the poverty
level. In addition, all four counties had either similar or greater
percentages living below the poverty level when compared to that of the
nation (at 12.4 percent) in 2000. This disparity is even evident in the
median household income chart below (**Figure 4**).

![](media/image9.wmf)

Figure 4

**Figure 5** shows the northern portion of the project; Marlboro and
Dillon Counties in South Carolina and Richmond and Scotland Counties,
also had unemployment rates of 6.5 percent (Dillon), 6.5 percent
(Marlboro), 5.4 percent (Richmond), and 5.8 percent (Scotland) in 2000,
which were higher than the nation's rate of 4.2 percent. These
unemployment rates have increased since 2000, with all counties having
unemployment levels over nine percent in 2003, (Dillon had 9.5 percent,
Marlboro had 13.1 percent, Richmond had 10.1 percent, and Scotland had
11.6 percent). Unemployment rates went down in most of the counties in
the project study area in 2006 with Richmond having the lowest
unemployment rate at 7.7 percent, Scotland having 9.0 percent, Marlboro
having 11.1 percent, and Dillon having 9.5 percent. These counties'
percentages are high when compared to those of North Carolina (4.8
percent), South Carolina (6.5 percent), and the United States (5.1
percent).

Figure 5

Having an interstate would provide opportunities to recruit new
businesses and industry by virtue of being linked and having proximity
to the interstate system. Although the presence of an interstate is not
enough to generate new jobs, it is one of the key factors that
industries and businesses seek when viewing a facility. Certainly an
interstate alone does not necessarily lead to economic growth, but the
improved access and mobility from I-73 would provide the Pee Dee Region
with enhanced development opportunities. However, the presence of an
interstate is a necessary component of the ability to attract new
businesses to an area.

Local city and county governments, along with non-governmental
organizations, would have the ultimate responsibility of recruiting new
businesses and industries to their areas. However, having this
interstate would be an added advantage to attract a company to locate in
these counties.

It is also anticipated that the construction of a new interstate
facility would stimulate the development of tertiary services in close
proximity to the corridor. Convenience services such as restaurants, gas
stations, and accommodations would provide additional employment and
income to the neighboring communities. Opportunities for development of
tourist-friendly establishments and recreational facilities would likely
increase with an interstate connecting to I-95 and the interstate
highway system.

A regional economic model **(Figure 6)** was run to estimate the effect
that I-73 would have on the local economy. A 2.7 billion dollar increase
in the gross regional product would occur over a 15 year time period,
based on travel efficiencies alone. The accumulated economic output
(GRP) over the fifteen-year period is forecasted to be about \$2.0
billion for the Preferred Alternative on the Southern segment of the
project and \$695 million on the Northern segment.

![](media/image10.wmf)

Figure 6

The total employment would increase by approximately 3,995 permanent
full-time jobs over a 15 year period above the No-build Alternative,
while the Northern Project would experience an increase in the number of
full-time positions by approximately 787 over the No-build Alternative.

***SUMMARY***:

I-73 has widespread support in South Carolina. The need for an
interstate system connecting to the Grand Strand has been recognized for
many years. Tolling authority for I-73 would allow this new facility to
(1) increase safety, (2) reduce traffic congestion, (3) improve
emergency response times in the region, and (4) promote economic
development. **Tolling authority is needed for this project to move from
a vision to a reality.**