Meet the $4.7 Billion Birmingham Highway Only Cronyism Could Build

It is really a testament to how dominant the highway industrial complex has become that we even have to talk about Birmingham’s Northern Beltline, a $4.7 billion outerbelt first proposed in the 1960s. But with backing from big companies that would reap windfall real estate profits from the highway — and with a U.S. Senator working to secure federal funding — this boondoggle might actually get built.

This 1960s-era outerbelt proposal Birmingham is pursuing would cost $4.7 billion. Image: ##http://blog.al.com/spotnews/2012/04/questions_persist_as_northern.html##Birmingham News##

The six-lane, 52-mile highway would be fantastically expensive for any state. Even on a per mile basis — $90 million — it is extravagant, making it one of the country’s most expensive highway projects, and by far the priciest one in state history.

To make matters worse, by any measurable outcome the project wouldn’t be all that useful. Regional transportation officials have estimated that this project would reduce congestion on existing freeways by a mere 1 to 3 percent. That’s a big part of the reason, when those planners ranked the 50 most important transportation projects for the Birmingham area, the Northern Beltline was ranked a lowly 36th. (All the remaining 49 projects, by the way, could be completed for $1 billion less than the total cost of the Northern Beltline.)

Even as a job creator — its ostensible purpose — the Northern Beltline underwhelms. A study commissioned by the Coalition for Regional Transportation, a pro-highway non-profit, estimated the project would produce 70,000 jobs and $7 billion in investment. But Chattanooga’s Ochs Center for Metropolitan Studies [PDF] says that study — completed by the Center for Business and Economic Research — was seriously flawed.

“The CBER data confuse permanent jobs with jobs available in any one year and rely on outdated Federal Highway Administration data,” said Ochs Center authors Ken Chilton and Peter B. Meyer.

Chilton and Meyer, on the other hand, estimate the project could produce as few as 2,800 jobs during any of the project years. That equals one job per $456,000 invested.

Plus, Chilton and Meyer say the CBER study examined only benefits of the Beltline and ignored its costs, and that it examined those benefits only against the “build nothing” alternative.

Ochs, meanwhile, estimates the project would attract only 372 businesses and 6,527 residents. Even that paltry influx could occur only after significant additional cost to taxpayers, because sewers need to be built in the undeveloped area the highway would serve.

That led Chilton and Meyer to conclude: “This project would be a poor investment of limited taxpayer dollars given its enormous cost and over-inflated economic benefits.”

“When you look at all the other transportation needs, all the other projects create jobs,” said Gil Rogers, an attorney for the Southern Environmental Law Project, an opponent of the Beltline. “Let’s find the projects that will create the most jobs and take the least amount of time.”

Some of the major landowners around Birmingham's proposed Northern Beltline, including U.S. Steel (land holding shown on the map in red) and the Drummond Company (yellow), are also the project's biggest supporters. Image: Birmingham News

Still, the Northern Beltline is a cause célèbre of the local business community and touted as an economic development opportunity. And — here’s the real kicker — of all the projects destined for delay and eventual abandonment, this is a project that might actually happen. Local officials recently applied for a construction permit, though a lawsuit challenging the environmental assessment is pending.

Rogers says he thinks project proponents believe that if they can “get a shovel in the ground,” it will make the project more difficult to stop. And they are planning to begin with a distant, disconnected segment that would only have any transportation value if the project could be completed — a real gamble in today’s transportation funding climate.

“It just seems very speculative to embark on a project like this,” without all funding in place, Rogers said. “The funding that they have would only build a road to nowhere.”

Supporters say the project would be paid for fully by the federal government, because of a program called the Appalachian Development Highway System. The current transportation bill, MAP-21, eliminated that as a stand-alone program, but in its new form, it can fund qualifying projects with absolutely no local match. Alabama received just $109 million from the fund in 2012. At that level of support, opponents point out, the project would take 43 years to complete.

But one thing this project does have going for it is a handful of powerful supporters. Alabama Senator Richard Shelby has been helping secure federal funds. The Coalition for Regional Transportation, which spun off from the Birmingham Business Alliance, is leading the charge locally.

The Coalition is supported by companies that will see the value of their real estate holdings skyrocket if the highway is built. Paul Vercher, vice chairman of CRT’s board of directors, works for U.S. Steel, the largest landowner along the corridor. The Drummond Company, another major landowner, is also represented on the board.

The group spent roughly $112,000 building support for the highway in 2011. That work included gathering statements of support from 39 local communities — but Rogers says they presented these communities with information about the project’s benefits and nothing about costs. The Coalition for Regional Transportation has also refused offers by Rogers and other opponents to hold public debates.

“A beltway just seems like a dinosaur approach to modern economic development challenges,” Rogers said. “Like most other cities around the U.S., Birmingham has some old interstates that need maintenance and rebuilding. There are some real opportunity costs to pursuing the Beltline.”

  • $90 million/mile! That’s almost as much as BART, and not nearly as useful. 

  • A $4.7 billion transit system would attract national headlines declaring a “major investment” in the city’s downtown core.

    But a $4.7 billion highway project? Meh.

  • T0wnp1ann3r

    I don’t know how active they are today, but USX Realty Development (US Steel’s real estate development division) actively improved land, built schools, and ran roads through virgin land in order to sell off buildable lots. This was back in the 90’s and early 2000’s. Trace Crossings and The Preserve in Hoover are 2 examples. My high school was built by them. They have a lot of land, deep pockets, and (at least in the past) an aggressive strategic plan to bring in money. They don’t play around.

  • truthbetold

    This road has nothing to do with traffic and is a prime example of abuse of eminment domain.  If US Steel and Drummond want so bad, they should be paying for it out of their own gold lined pockets instead of using federal dollars that the federal government does not have.  And they had better anti up for the sewers as well because JEFFCO is bankrupt.  A road costing $90 million per mile is ludicrious.  And these groups pushing this thing are only doing so because of their large donors.  Same thing goes for Shelby and Bachus.  Take a look at whoo their top campaign contributors are. 

  • Behold the pork – Billions of taxpayers dollars showered upon the crony contractors of the State Senators.  It’s astonishing to contemplate that even despite the study that yielded this project is a steaming pile of fail, it will still go forward nonetheless.

  • The research is a little contradictory because in reality the land likely will NOT skyrocket in value. This is because people are not interested in living in that part of the city in spite of its abundant natural beauty. A 6 lane I-65 north of the city has seen very little development to this day, in stark contrast to the south segment. There is no reason to believe that a beltway skirting the same area will be any different. The projection of only 6500 new residents along a 52 mile stretch proves the point (contrast that with the 57 mile Washington Beltway.) That the highway fails to connect with the increasingly vital I 20 corridor is the essential point that makes the highway of little value.

  • Info

    What an appropriate and accurate headline — the “$4.7 Billion Birmingham Highway Only Cronyism Could Build”. 
     
    Let’s not leave Alabama’s Congressman Spencer Bachus off the list of those engaged in this cronyism project. He has worked far too hard not to receive his share of credit for pushing this irresponsible federal highway project.  In fact, he is largely responsible for getting those statements of support.  He actually wrote to area mayors and commissioners asking that they endorse the Northern Beltline and even sent a copy of a resolution for them to sign. Talk about political pressure!! 

  • Anonymous

    $90 million a mile, and I can’t find money for a speed hump in my town.

  • Nathanael

    Isn’t Jefferson County, Alabama the one which is on the verge of going bankrupt due to financing deals with Goldman Sachs and other banks…. related to its SEWER SYSTEM?

    So in fact the sewer lines will certainly not be extended to this area, because the sewer system is already bankrupt.

    This makes this extra specially useless, *even as a land development scheme*.

  • From Birmingham here. Brilliant summation of the issues.

  • Poewaldrop

    The northern beltline would bring some of the overcongesting in south of Birminghem to the north of the county.  When the transportation is facilitated, the population will migrate out of the congestion but people are not going to move to an area that is not easily accessible.  We all witness to the fact that the southern part of the county and northern Shelby County is a headache to travel through–most time consuming.

  • Mickey-Dee

    The population of Jefferson county swarmed to the south after the completion of the southern beltway. With the addition of the Memphis direct route ( I-22), the northern part of Jefferson county will grow. This lack of a peripheral beltway has handicapped Birmingham’s growth potential for years. It’s far over due.
    Of course, to be fair, the problems in Birmingham have more to do with it’s horrible reputation and it’s lack of competent leadership. The city should allow a metro wide vote when it comes to electing leaders. The mistrust and anti-Caucasian bias that drives the political scene will always cripple the city. It has been one crooked mayor after another and the city council is even worse.
    Alabama’s most productive and populated area depends on a healthy Birmingham. Right now, it’s as sick as it can be without kicking the bucket. A northern beltway could help the area to get back in its feet and attract new businesses and people to the area.

  • Mickey-Dee

    No one was interested in building or living south of birmingham until the 459 southern beltway was completed. That area exploded on completion. It was empty expanses of nothing. I remember 280 in the 80’s. Nothing but Lloyd’s and a gas station.

  • Michael Eric Dale

    There were other reasons for shifts in city population besides a beltway. The southern area had always been the most desirable part of town with the best suburbs so it is only natural that population would continue in that direction. What you do not recall is that there had been a moratorium on development in that area for years because of sewer issues. It happened that those were resolved at about the same time the new beltway opened. Suddenly, development that had been off limits became feasible. That brings up another question. Who will pay for the non-existent sewer and non-existent roadways to serve any new development? It certainly will not be the county or state.

  • Michael Eric Dale

    The development was more the result of the lifting of a years-old sewer moratorium than 459- there WAS interest, it just was not feasible. I am not totally against the idea of a northern bypass, I just fail to see how the alignment is going to benefit anyone, including the landowners.

  • jimmymartin

    I beg to differ with you. When the southern half oc Birmingham’s bypass was completed in 1985 or ’86, there was nothing south of Birmingham except a liquor store on Hwy 280 and Lloyd’s Restaurant. There was no Galleria, no ball park, no new schools, and no subdivisions anywhere. You must not have been here then or you would know how much growth I-459 brought to the area. This same growth will occur in north Jefferson County when the northern half of a long-planned Interstate is completed.

  • jimmymartin

    Hey- there was one liquor store too! LOL

  • Michael Eric Dale

    Then why is there no growth along an expanded I65 all the way through Blount County that has been in place for 15 years? Much of the development you cite was already under construction or planned. Galleria opened in 1986 but was being planned in 1974, along with a competing mall where Collonade is presently located. Certainly the beltway had something to do with those plans, but population had been heading in that direction for years. That cannot be said for the northern areas of the metro area.

  • JimmyMartin

    Attn: Michael Eric Dale Mickey-Dee! Sorry, your argument does not make sence! First, until completion of I-459, there was an acess problem to areas south of town and thus it had not gown before! Secondly, until John Harbert gave Hoover land to build new schools and the Baron’s Ballpark off Hwy. 150, there was no reason to move into the area. Plus, when the City had those under construction and Harbert sold the property surrounding them to developers, there hadn’t been subdivisions to move into.

    You stated “The southern area had always been the most desirable part of town with the best suburbs so it is only natural that population would continue in that direction.”. Again, there were no developments and thus no suburb in the area until I-459 was completed! I worked at Harbert back then and obviously know the facts better than you.

    I would give you more facts but thing the ones I gave should interest you in learning a little history before your next post.

  • Michael Eric Dale

    And again the reason there were no significant developments at that time was the sewer moratorium that was resolved at about the same time as 459 opened. Why would a beltline have been required for neighborhoods to develop along 280? I worked at an architectural firm that was designing a mall for the Collonade property in 1974. Would there have been a developer seeking to build a mall where there were no people? Certainly not. There were already people in neighborhoods that adjoined 459 in Irondale, Mountain Brook, Altadena, and Hoover.

    By contrast, what development is being considered in the area where I 422 will adjoin I 65? None, you say? Where are the people today in relation to an expanded I 65 that has been in place for 15 years? There is great access to the north county and soon there will be direct access to the northwest. Why have developers not followed? Because people, in general, are not and have not been interested in the area.

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