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A map of the “diverging diamond interchange” planned for Exit 16.

The Vermont Supreme Court has decided that gas station magnate Skip Vallee can have his day in court to argue why a Colchester traffic project should not receive an Act 250 permit.



The dispute is over a project the state’s transportation agency, VTrans, has proposed to relieve congestion and improve safety on the Route 2/7 corridor in Colchester near Interstate 89 — an area notorious for its traffic.

VTrans has bundled together the creation of the state’s first “diverging diamond interchange” — a configuration that allows traffic to briefly switch sides — with improvements to connecting roads needed to open a gas station at Costco.

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While the Friday decision upholds the project’s stormwater permit, the state’s highest court concluded that the environmental division “erred in dismissing Vallee’s claims” under Act 250’s water pollution criterion.



The Supreme Court acknowledged that the District 4 Environmental Commission, Chittenden County’s Act 250 review panel, had already rejected Vallee’s claims that the project would result in undue chloride and phosphorus pollution.



But as the environmental court’s review of the Act 250 permit must start anew, the lower court has to allow Vallee to have a hearing to make his water pollution claims, according to the Supreme Court decision.



VTrans filed its original application for an Act 250 permit for the project in 2013. The plan has been staunchly opposed by R.L. Vallee Inc. and Timberlake Associates, owners of nearby gas stations.



Last year, the environmental court upheld decisions by the state’s Agency of Natural Resources and the District 4 Environmental Commission to grant VTrans the permits it needs for the overhaul of the I-89 Exit 16 interchange in Colchester.



The high court, in its decision Friday, said it had not received any evidence to reverse the lower court’s decision to grant VTrans’ stormwater permit.



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In a prepared statement, R.L. Vallee Inc. said that this summer has seen a “record number of beach closures” from phosphorus runoff.



The percentage of early season reports this year in the state’s cyanobacteria bloom tracker classified as high and low alerts was the highest it’s been since data was recorded.

“We are pleased that the Supreme Court affirms our position that Act 250 is central to addressing this issue and stands as a bulwark against the permitting pressures of an out-of-state multinational corporation,” R.L. Vallee Inc. said in the statement.

Costco has filed an Act 250 permit amendment to open the gas station during off-peak hours before the road improvements are made. Vallee and Timberlake have also been opposing that permit amendment.



Michael LaCroix, project manager for VTrans, did not immediately respond to a voicemail seeking comment on Friday afternoon.



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