BRADENTON, Fla. - The Route 460 Funding Corp. of Virginia plans to use extraordinary redemption provisions to call $293.3 million of revenue bonds now that the state has executed documents terminating the project.
In a notice to bondholders on April 24, the corporation said that the Virginia Department of Transportation's notice canceling the $1.4 billion toll road set in motion timelines for the bonds to be called prior to maturity.
VDOT said that its design-build agreement between Route 460 Funding Corp. and US 460 Mobility Partners LLC would terminate simultaneously by June 15.
"Funds to accomplish an extraordinary redemption following a termination of the comprehensive agreement by VDOT for its convenience are derived from termination compensation amounts to be paid by VDOT to the corporation," the notice said.
Virginia terminated the contract with the developer after spending about $300 million on the project, which never received the required environmental clearance from federal agencies.
In 2012, the corporation issued $231.6 million of current interest bonds and $61.76 million of capital appreciation bonds to fund a portion of the project.
The corporation said that VDOT will determine the amount of the termination compensation that will be necessary to redeem the bonds, and that the bonds could be called for redemption as early as Aug. 1, according to the notice posted on the Municipal Securities Rulemaking Board's EMMA filing system.
Virginia Transportation Secretary Audrey Layne said in mid-April that the state would try to recoup the payments already made to US 460 Mobility Partners for the planned toll road in southeastern Virginia.
The state paid $240 million to US 460 Mobility Partners and VDOT spent about $43 million before work was halted on the project.
The contract was awarded in late 2012 by the administration of Gov. Bob McDonnell for the design and construction of a highway that would parallel the existing Route 460 from Suffolk to Petersburg.
McDonnell said the toll road would provide greater access for truck traffic to the state's seaports and serve as a secondary hurricane evacuation route for the Hampton Roads area.
Gov. Terry McAuliffe, who was elected in November 2013, suspended work on the toll road in March 2014 after the U.S. Army Corps of Engineers said the state was proceeding at its own risk until the environmental permitting process was completed.
