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HRBT expansion could cost state millions beyond construction expenses

Because of a clause in Virginia's contract with Elizabeth River Crossings, taxpayers may have to compensate ERC millions of dollars if it claims it's losing money due to the Hampton Roads Bridge-Tunnel expansion.

NORFOLK, Va. (WVEC) -- The upcoming expansion of the Hampton Roads Bridge-Tunnel could cost taxpayers a lot more than just construction expenses. 13News Now found a pricey clause deep within an existing state contract.

It entitles Elizabeth River Crossings (ERC) to large government payouts if Virginia builds alternative routes that potentially take traffic away from the Downtown and Midtown tunnels which ERC operates.

That means it's possible Virginia could owe millions of dollars, which would be money taken away from necessities funded by public tax dollars.

There are hundreds of pages of legal jargon, amendments, and dozens of exhibits in the contract between the state and Elizabeth River Crossings. It was negotiated back in 2011 under then-Governor Bob McDonnell to build, operate, and maintain the Midtown and Downtown tunnels and the MLK Expressway.

“There's a lot going on in this contract,” legal analyst Ed Booth explained a section mentioning "alternative facilities. “That's a defined term in the contract and it means a number of things. But one thing that it clearly means, because it's also defined in the contract, is an expansion of the Hampton Roads Bridge Tunnel.”

SEE ALSO: Hampton Roads Bridge-Tunnel expansion bigger than expected

We now know that the HRBT expansion is happening, which triggers another part of the contract.

“It's a compensation event, which is another defined term,” Booth said. “A compensation event basically means that if there's construction of an alternate facility, then the state could be responsible for paying compensation.”

Booth believes negotiators for ERC thought ahead.

“Built into this contract is the idea that if they lose money, the taxpayers are responsible,” he added.

13News Now took the contract to the man now responsible for executing the Commonwealth's budget to ask if this seems like a good deal for the taxpayers.

Secretary of Finance Aubrey Layne said it is not. He explained how the process would work.

“They would make their claim and it's a pretty high bar they have to prove that their revenues have been impacted,” he told us.

Because of the contract language, tolls on the HRBT expansion might be a mitigating factor. Layne believes the HOT lanes don't eliminate the possibility of a payout, but they could substantially reduce what damages ERC can claim.

We asked how he will be able to craft a budget if he doesn’t know exactly how much the state is going to owe.

“Until we actually have a claim, it will not impact the budget,” Layne responded. “Once it becomes a real claim and it looks like we're going to have to pay, we'll have to deal with it.”

Layne will likely suggest the money come from transportation funding. It could also come from the general fund, which pays for things like education and public safety.

“Whether it's one million or more than that, it will be taking something from something else,” he projected.

That possibility will last decades. The stipulation lasts the entirety of the contract, which is 58 years.

13News Now wanted to know if Layne would include this clause in a contract negotiated today.

“Absolutely not,” he answered.

Hindsight is 20/20, but Layne thinks the idea we wouldn't need new crossings in Hampton Roads for almost six decades, was probably short-sighted.

“We will protect the citizens as much as we can, but the contract is the contract,” he added.

A spokesperson for ERC sent us a statement in response to our questions.

"According to information published by VDOT, the Hampton Roads Bridge-Tunnel project is not expected to be complete until sometime in 2024,” Caryn Durham wrote. “ERC's attention remains focused on the near-term including continuing to operate and maintain a safe facility, improve customer service, and increasing the saturation of E-ZPass in the Hampton Roads Region."

2011 ERC Comprehensive Agreement by 13News Now on Scribd

ERC Tunnel Contract Definitions by 13News Now on Scribd

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