Minnesota’s $125 million interchange is not “Economic Development”


Strong Towns would like to welcome guest contributor, Nate Hood, who authored this post. Check out his excellent work on his blog at Thoughts on the Urban Environment.

Highway 169 and Interstate 494 can be one of the more frustrating intersections to navigate in the Twin Cities. During peak periods, it is either at a stand-still or creeping along slowly, and it goes without saying that something needs to be done. The question is, what something needs to be done?

The design currently under construction is a $125 million state-of-the-art interchange that consists of six roundabouts, ten runoff ponds, five new bridges, noise walls and the removal of stop lights. Proponents of the new intersection argue it will reduce congestion and be a beacon of much needed “economic development” while “saving lives, time and money while strengthening the economy of our state and region.”

Although well intentioned, the advocates couldn’t be more wrong as they have based their assumptions on what is essentially a set of faulty principles.

Over the past 60 years, the American road building status quo has operated under the assumption “if you build it, they will come.” And for the most part, this has happened. We built more roads and continued to see more congestion. Like a broken record, we fell victim to the fundamental law of road building that states more roads will beget more traffic. This theory has been particularly true for I-494 and H-169. At its present capacity, the interchange is overused and outdated. Yet the current interchange, which was built during the mid-1990s, is only outdated because of the development pattern we’ve chosen.

[Here is what it’ll eventually look like and here is a 3D fly-thru.]

Let’s take the two nearby suburban counties of Scott and Carver as an example. Scott County’s population boomed from nearly 58,000 in 1990 to 130,000 in 2010 and nearly all of it is car-dependent sprawl with only approximately 35% of residents working within the county. A similar story can be told with Carver County. Its total population increased from 47,000 in 1990 to around 91,000 in 2010 and, again, is primarily all car-dependent sprawl reliant on the metropolitan core for employment.

This leads me to my first point: most of the congestion on 494/169 exists for reasons other than engineering. It exists because we’ve built lots and lots of single family houses outside of the metropolitan beltway where people are reliant on driving long distances. Take a look for yourself: Scott County in 1991 versus 2009. This is precisely the type of development we’re likely to get out if we continue to subsidize massive road projects.

The structural problem in our road building system is that we’ve based these large financial decisions on faulty premises and inaccurate estimations. We’ve justified and enabled the subsidizing of less efficient forms of development through the aid of cost-benefit analysis. For example, the I-494/H-169 interchange looks great on paper at first glance. It’s going to create jobs, help the economy, save time, etc. Unfortunately, the reality is that it’s unlikely to do any of these things.

For starters, the project’s traffic projections seem to ignore the effects of higher gasoline prices and cultural shifts in driving habits. The Minnesota Department of Transportation (MnDOT) estimates an increase of 124,000 vehicle trips per day by 2030. These numbers are contrary to current trends. Between 2004 and 2007, vehicle miles traveled (VMT) in Minnesota have actually flat lined, and have been decreasing since 2007. VMT are likely to stay stagnant with higher fuel costs and financial constraints related to economic downturns.

Not only do policymakers need to more accurately link traffic growth estimates with current economic realities (such as the deflated housing market, depressed credit markets and stagnant suburban growth), but they also need to ask the question “Do we want to continue to subsidize more sprawl-inducing infrastructure?”

The cost-benefit analysis looks merely at numbers and makes no . In this case, the interchange project is said to have a 1.19 b/c ratio; meaning that for every dollar spent, there will be a benefit of $1.19. This savings would be remarkable if only it were true. Of the $198 million in “benefits,” $181.6 million is in the form of incremental time savings.

A previous Strong Towns post summarized the situation best:

There is no direct or indirect financial return to the government for this savings. Sure, the application argues that the “delays have a direct impact on the productivity of our local businesses and schools”, but nobody is arguing that this increased productivity will result in … million[s] in increased sales, income and property tax receipts. Or any real increase. The time savings is a purely social benefit for the people … who will now enjoy reduced travel times from the construction of the overpass.

This $181.6 million benefit is a “social benefit” – no money is actually being exchanged nor is government revenue increasing. And these small, incremental pieces of time savings do little to improve overall economic vitality. Improving an individual’s commute from, say, 1 hour to 20 minutes might spur growth, but improving the average daily commute by an estimated 5 minutes will not.

We are acting under the assumption that moving cars is of the utmost importance and that traffic must be moving at a consistently high speed at all times, no questions asked. MnDOT has identified H-169 has a “high priority interregional corridor,” meaning it must “function at a free-flow level of operation, with a minimum of 60 mph speeds and minimal conflicts and interruptions to traffic flow.” A considerable segment of Highway 169 cuts in relatively close proximity to many residential neighborhoods and commercial areas. Is it absolutely necessary for vehicles to be, at all times, traveling at 60 miles an hour minimum?

The weakest argument made is to improve “access for employees and visitors to the tribal casinos.” It’s hard to believe, and somewhat disheartening, that slightly improving a 30-plus mile round-trip car ride to a casino is now being considered a “significant long-term benefit.”

At the end of the day no matter how you break it down, the $125 million intersection is not economic development. In the short run, it will save time for those traveling during peak traffic hours; mainly those who have chosen to live far, far outside the city, in sprawling single-use, auto-oriented communities who drive heroic distances to work. Even under the best possible economic conditions, the $125 million interchange would be nothing more than another means of subsidizing suburbia.

Even if this intersection does make new suburban growth possible (which it won’t), it’ll be the type of development that is destructive to our current infrastructure and simply not needed. Minnesota doesn’t need another housing subdivision or big box store in Scott County.

Related Links:

  • Strong Town’s Costs and Benefits Three Part Series (one, two and three)