Project: Richmond, Virginia, I-295 Beltway

1.0 Synopsis

The Richmond metropolitan area grew at a phenomenal rate during the 1980's, while I-295 was under construction. The bypass, completed in 1992 at a cost of $450, forms a 53-mile beltway around the city which has shaped the region's growth. The response of each of the submarkets within the study area to the opportunities posed by the new beltway reflects the range of supply and demand conditions. Access to I-295 is considered to be a critical factor in most location decisions that are discussed in the case study. Direct interstate access is considered to be among the deciding factors for developments catering to non-local markets for which there was national competition. Developments catering to local markets (retail, distribution, and housing) would likely have located on one of the radial routes elsewhere in the market area if the beltway had not been built. The net employment impact of I-295 is estimated in the region of 25,000 jobs.

2.0 Background

2.1 Location & Transportation Connections

I-295, a 53-mile bypass of the cities of Richmond and Petersburg, provides north-south, east-west, and cross-directional bypasses for traffic on both I-95 and I-64. It forms a beltway that stretches three-quarters of the way around Richmond's outer suburbs. I-295 was originally designed as a bypass around the congestion of I-95. Its main impact, however, has been to link Richmond's outer residential suburbs which were developing along disconnected radial routes. The highway also facilitates access from Richmond's outer eastern suburbs to Richmond International Airport.

Previously disjointed suburbs in Henrico, Hanover, Chesterfield, and Price George Counties were connected by the new transportation corridor. Prime commercial sites with high traffic counts were created along the new stretch of interstate, creating opportunities for commercial development in outer locations. Before I-295 was built, suburban housing had begun to push out of Richmond along radial routes. I-295 connected these outer dormitory suburbs, providing new sites for employment-generating commercial development in the vicinity of the 17 interchanges that ring the outer beltway route.

2.2 Community Character & Project Context

While Richmond continued to lose population and jobs, overall growth in the metropolitan area was overwhelmingly positive. From 1979, when construction of the bypass started, until 1998, six years after it was completed, the populations of the four counties traversed by I-295 (Henrico, Hanover, Chesterfield, and Price George Counties) grew by 55%. Although there was a 10% drop in the number of city residents during that period, there was a net gain of over 200,000 residents, amounting to a net increase of 32% in the total population of these five jurisdictions. Population growth in the study area was slightly above the state average growth for this period. (State growth was largely driven by the development of Northern Virginia, which expanded to accommodate growth in the Washington, D.C. metropolitan area.)

During this same period, jobs in the four-county study area grew by over 117%, more than twice the state average rate. Jobs in the city of Richmond declined by over 15%, but there was an overall increase of 166,000 jobs in the metro area, a 40% increase in the region's employment base. Nearly one-quarter of this job growth has been within the study area. Capital income in the study area increased by 46%, compared to a state average increase of 29%.

3.0 Project Description & Motives

I-295 was conceived as part of the 41,000-mile National System of Interstate and Defense Highways, which was approved in 1956. Construction of I-295 began in 1979 and was completed in 1992 at a cost of $450 million (nominal $). The bypass was originally intended to form a continuous outer beltway with Route 288, which was just completed in 2003, connecting with I-95 just south of Route 5. However, the need to skirt Civil War Battlefields, military bases, and wetlands resulted in the bypass being routed 22 miles south of the initially-planned connection with I-95. This explains the ?dog-leg? shape of the outer beltway.

4.0 Project Impacts

4.1 Transportation Impacts

4.2 Demographic, Economic & Land Use Impacts

Employment and shopping centers were created on the large new greenfield sites near the interchanges along I-295. The new beltway enabled a new lifestyle allowing commuters to travel between suburban residences, workplaces, and the entertainment venues that began development on the outer beltway. This rendered traditional downtown areas in the Tri-Cities Area (Richmond, Petersburg, and Hopewell) increasingly irrelevant to the typical suburban lifestyle.

The I-295 beltway created new development sites which shaped economic growth within the Richmond metropolitan area and counteracted the pattern of other development. Before the beltway, most of the development pressure had been in west Richmond. East Richmond, on the other side of the James River, was more rural and was regarded as a less desirable location. I-295 facilitated a swing in the momentum of development to the north and to the east of the James River.

Although development has been strong throughout the study area, it has been uneven. Development patterns at the interchanges have responded to diverse market conditions within each submarket area. Development patterns reflect the distinctive supply and demand conditions of these areas, and a variety of planning initiatives for economic development.

If I-295 had not been built, the local-serving developments (retail, distribution) would probably have been located further out on one of the radial routes. However, the scale of these developments may not have been as large but smaller and more numerous. Non-local serving developments, such as those occupied by multi-national companies consider freeway access to be a critical factor. Examples of such developments in the corridor include the Rolls Royce plant and the BRAC expansion of Fort Lee both of which are now under construction in Prince George County. National and international (in the case of Rolls Royce) competition for these investments was intense and direct site access onto I-295 has been a critical element in assembling successful bids for such investments. Together, these projects are expected to create about 8,500 jobs. It is estimated that, out of the total of nearly 75,000 new jobs that were created in the project area after I-295 was completed, some 25,000 jobs can be attributed to the project.

5.0 Non-Transportation Factors

In nearly all cases, I-295 was one of a number of key factors in decisions to locate development projects at interchange sites. The fundamental drivers of these decisions were demographic, economic, regulatory, and political factors that spurred growth of the Richmond metro area during the late twentieth century. Foremost were population growth, real estate market conditions and planning practices. Henrico County got a large share of the development because it has the strongest real estate market conditions and because it has planned proactively for large-scale development by assembling and providing utilities to sites at key interchange exits. Even in the decisions to locate the Rolls Royce and the BRAC expansion in Richmond ? for which there was national competition were driven by other factors. However, the highway was a necessary component of each deal.

6.0 Resources

6.1 Citations

1. Economic Development Research Group, Economic Impact of Freeway Bypass Routes in Medium Sized Cities, extracted from the report: Economic Impact of I=73 Alignments on Roanoke, Va., September 2000.
2. Hanover County, Virginia, Economic Development Strategic Plan, Revised Nov 2002.
3. Basile, Bauman Prost & Associates, Strategic Economic Development Plan for Prince George County Virginia, June 2007.
4. www.roadstothefuture.com www.interstate-guide.com www.vaeng.com www.discoverrichmond.com www.gatewayva.com www.economicexpert.com en.wikipedia.org www.leapmodel.net www.meadowville.com www.rolls-royce.com www.henrico.com

6.2 Interviews

Organizations

Hanover County

Tri-Cities Area MPO

Henrico County Economic Development Authority

Chesterfield County Planning Department

Price George County

Richmond Regional Planning District Commission

Henrico County

VDOT

Footnotes

Case Study Developed by Economic Development Research Group, Inc.