The Supreme Court of Virginia on Thursday unanimously rejected a legal challenge to the Midtown tunnel P3 project, clearing the way for tolls to begin February 1.

The decision spelled the end of a lawsuit by residents and business owners who had hoped they could stop the tolls, which they viewed as unfair, illegal and harmful. The court case began in July 2012, when the group sued the Virginia Department of Transportation and its private partner, Elizabeth River Crossings, over the terms of their mega contract.

Elizabeth River Crossings, formed by Skanska Infrastructure Development and Macquarie Group, signed the P3 contract in December 2011.

The Supreme Court concluded that the tolls are user fees and not unconstitutional taxes, as a Portsmouth judge had ruled last spring. The Court also concluded that the tunnels are part of an integrated network and that users will receive a benefit not shared by the general public.

Gov. Bob McDonnell applauded the court decision, saying in a statement that it will allow work to continue on the Midtown Tunnel expansion project. He said it also confirmed that the state law governing public-private projects is a critical tool to get otherwise impossible projects done by drawing on private-sector capital and innovation.

In May, Portsmouth judge James A. Cales had ruled that the General Assembly had exceeded its constitutional authority by giving "unfettered power to the Department of Transportation to set toll rates without any real or meaningful parameters."

He also ruled that there were no "reasonable alternatives" for motorists who did not want to pay the tunnel tolls. Now, the Supreme Court disagreed, saying there were reasonable alternative, without explanation.

Elizabeth River Crossings, the project concessionaire, has continued with construction of the project while the fate of the tolls was hung up in the courts.

VDOT contributed about $420 million to the project, while Elizabeth River Crossings has committed $272 million in private equity for the 58-year contract.

The project involves construction of a second Midtown tube to relieve some of the worst congestion in the region, rehabilitation of the Downtown and Midtown tunnels, extension of a freeway in Portsmouth and the private maintenance and operation of the roads until 2070.

The project's costs have already surpassed $687 million, according to Elizabeth River Crossings' September report to investors.