Charleston County files suit over I-526 funding, asks court to make state bankroll entire project
The decade-long saga to complete Interstate 526 from Citadel Mall to James and Johns islands is now going to court.
Charleston County has asked the S.C. Supreme Court to find that the State Infrastructure Bank and the S.C. Department of Transportation have breached a contract with the county and should be ordered to pay for the entire $750 million project.
The legal move, filed Thursday, is the latest wrinkle in the long-running effort to complete the last 10 miles of the road best known as the Mark Clark Expressway.
County Council Chairman Vic Rawl said the lawsuit will give the court a chance to bring clarity to a project that has remained in limbo for years.
“Are we stopping negotiations? No, we're not," Rawl said. "Do we wish to try to resolve this dispute as soon as possible and get this project back on track? Of course.”
Back in 2007, the bank committed $420 million for the project, but the estimated price tag has almost doubled since then.
Last year, the bank asked Charleston County for a solid plan on how that $300 million-plus funding gap would be closed. County Council responded with a resolution pledging its full faith and credit and citing several possible sources for the money. But that move didn't convince the bank, which voted in May 2016 to unwind the project.
Since then, state and local officials have discussed what should happen next. County and state officials met behind closed doors earlier this month to try to resolve the impasse, with no success.
The lawsuit caught some by surprise, as County Council never voted to go to court. Rawl said Friday council members reached consensus on the decision to bring suit after talking about the project behind closed doors. State law allows public bodies discuss legal and contractual matters in private, but any resulting action is supposed to be voted on publicly.
State Sen. Sandy Senn, a Republican whose district includes much of the I-526 path, said she she thought the discussion on the project would continue at the bank board's next meeting in a month or two.
"Rather than wait, it looks like we pulled the trigger," she said. "That surprised me a little bit, but at the same time, I want to get the show on the road.”
While County Council didn't endorse the legal move in public, some members, including Councilman Joe Qualey, agreed with it.
"Someone needs to bring clarity to our relationship with the State Infrastructure Bank as it relates to the original contract,” Qualey said.
The project has also stirred deep divisions between those who see it as a crucial link in the county's road system and those who see it as a low priority project that would fuel suburban sprawl on Johns Island.
The county took the unusual step of asking the S.C. Supreme Court to accept the case in its original jurisdiction — rather than filing first at the circuit court level. If successful, the move could lead to a speedier resolution.
What the county wants from the court
The Charleston County lawsuit against the state over the Interstate 526 project asks the S.C. Supreme Court to:
Declare the bank can't unilaterally terminate the agreement to complete the highway.
Keep the bank from suspending funds for the project.
Declare that the bank can't release the $420 million committed in the agreement for other state projects.
Award damages of $750 million to the county for breach of contract.
Award the county $117 million as restitution for the local match spent on state roads.
Charleston Mayor John Tecklenburg signed an affidavit in support of the county's legal move — and of the Supreme Court tackling the case first.
"If this matter has to wind its way through the lower courts, it can be expected that the current shortfall of $330 million will only increase, thus jeopardizing the practical and fiscal feasibility for a county to complete the project, even one as financially sound as Charleston," Tecklenburg said.
Kiawah Island Mayor Charles Lipuma also signed an affidavit with nearly identical language. The county's legal action had been anticipated for some time: Both mayors' affidavits were dated in November.
Dana Beach of the Coastal Conservation League — possibly the highest profile opponent of the project — said the $420 million in dispute could be better spent on smaller projects to provide traffic relief.
He cited improving Johns Island's Main Road as one such example and noted the legal action will tie up money that otherwise could be spent on such work. He called the lawsuit a waste of taxpayer money and a “foolish and unnecessary action.”
Beach noted that even if the county were to get the bank's remaining chunk of the original $420 million, the question remains about where it would find the remaining $300 million.
“The county has made an effort to fund it and failed,” he added.
State Rep. Leon Stavrinakis, who helped strike the original 526 deal when he was on County Council, said the lawsuit "represents a catastrophic failure of the public by Charleston County Council and the State Infrastructure Bank."
Officials with the State Infrastructure Bank, including its new chairman, Spartanburg lawyer John White, did not return messages left Friday. S.C. Department of Transportation spokesman Pete Poore said Friday the agency has no comment on the lawsuit.
Bart King of Charlestonians for 526 said something needs to be done about traffic west of the Ashley River, and completing I-526 is the answer.
“We are fed up with the traffic," he said. "Every day my commute gets longer and longer.”
Growth on James and Johns islands has created traffic problems that can’t be fixed by improvements to the existing roads, he said, adding, “We’re glad to see that this is finally happening. I am happy this can end up in the courts so we can see a resolution on these issues and get the completion finalized.”
Brad Taggart, also of Charlestonians for 526, said he is glad that the county has sued the SIB.
“We were hoping that the county would up the ante and at least pressure them with the threat of legal action,” Taggart said. “I think they might be persuaded to do the right thing.”
The first planning for the Mark Clark-Interstate 526 project began in 1960, and construction began in 1979. The James Island connector opened in 1993, and the county, Infrastructure Bank and Department of Transportation signed their intergovernmental agreement in 2007.
As part of the deal, Charleston County agreed to contribute $117 million on other roadwork that the state otherwise would be expected to pay for, such as widening Johnnie Dodds Boulevard in Mount Pleasant and Harborview Road on James Island. That was done as part of its original 2006 half-cent transportation sales tax. Voters approved an additional half-cent tax last year.
The county's lawsuit also asks the Supreme Court to find that the county is entitled to damages totaling $750 million, "which is the estimated cost to complete the extension project."
The lawsuit also asks the court to prevent the bank from committing any of the $420 million to other projects, and it seeks restitution for $117 million, the amount of the county's match.