Sic Transit Gloria : Fresh Thinking Can Bring Rail Answers to L.A.

With less visible impact than an earthquake or a riot, Los Angeles recently received news that it won't be like Tokyo, New York, London and other great cities.

The Metropolitan Transit Authority publicly faced the fact that the money won't be there for a 30-year, $180-billion grand plan that was to have strung rail lines and subways all over the Los Angeles Basin, giving the area a transit system like those of most other great urban centers.

Instead, Los Angeles will struggle in the next 20 years to build some subway and rail lines, to add some bus lines and a lot of high-occupancy lanes to the freeways--always facing the risk, according to official estimates, that by 2015 travel speed in the metropolis could be down to 10 m.p.h.

The original transit plan, which was predicated on high levels of sales tax revenues, had to be cut back because the recession sharply reduced revenue estimates. So last week, the MTA introduced a substitute plan to spend $65 billion over 20 years on transit for the area.

Some projects were shortened--a San Fernando Valley subway line runs only to the 405 Freeway, not to Warner Center--and some projects were postponed, perhaps permanently. The latter include rail lines running from Downtown to Glendale and through the Crenshaw district.


But even the new plan is dependent on federal funds and other contingencies at a time when it's unwise to count on public money for any purpose.

The city is in peril. And what will save it is "fresh thinking that sees transportation in a larger context of residential and work patterns and air quality," says David Abel, publisher of Metro Investment Report, a newsletter of regional projects.

As it happens, fresh thinking is going on. A major hope is that the Los Angeles area can become a laboratory for developing new ways to finance, build and operate transportation. They will include toll roads, congestion pricing--you pay more to travel in rush hour--using funds raised from tolls to finance bus and shuttle service, and special mortgage rates for homes near transit lines.

All those ideas and more were brought up at a recent Metro Investment seminar for local businesses affected by MTA's new realities, from construction companies to banks to consulting engineers.

And the region has moved beyond the idea stage. The nation's first privately financed toll road--a four-lane express highway--is now being built on the median of the 91 (Riverside) freeway as it crosses a stretch of Orange County from Fullerton to Yorba Linda.

Traveling the toll lanes will cost 25 cents most times, but at peak hours it will be $2.50 for the 10-mile trip. There will be no toll booths. Tolls will be charged electronically through vehicle plates via sensors. Disabled drivers and vehicles with three or more passengers will travel free in the toll lanes, which are being built under an experimental state law.

"No 18-wheelers will be permitted on the road, but we expect Federal Express and UPS vans and taxis, as well as cars and buses," says Gerald Pfeffer, managing director of California Private Transportation Co., which will build and operate the road for its backers: Peter Kiewit Sons Inc., the Omaha-based construction company; Cofiroute Corp., a unit of a French road builder, and Granite Construction Co. of Watsonville, Calif.

The investors are putting up $19 million, and the additional $101 million is being financed by Citicorp, French banks and the Cigna insurance company. The investors hope to make 17% a year on capital employed, and in 35 years they will hand ownership of the lanes to the state of California.


It's important to note that California 91 "will use differential pricing, a form of information, to make more effective use of the road," says Robert Poole Jr., president of the Reason Foundation and an expert on privatization. "From now on, we won't simply build more freeways, but we can expand effective capacity by peak-hour pricing, just as the telephone company does."

More such ideas will be tried, here and in other cities, because the new reality is that public money won't be there. Even gasoline tax revenue will decline as clean air standards and electric cars reduce fuel consumption. In fact, there are six private road projects under way in Washington state, and Seattle wants to become a pioneering center of privatized transport.

But the Los Angeles area, given its great size, has more potential projects to work on--and more of a stake in becoming a transit laboratory.

Local companies lost prospective business when the MTA's original $180-billion transit plan was scrapped. "Less work will make it harder for Los Angeles manufacturers to make transportation equipment a leading local industry," says economist Allen Scott of UCLA. Already, local engineering firms are seeking business in other areas because of diminished prospects here.

But that's where fresh thinking is needed. It should be entirely possible to build or extend rail and subway lines through private financing. After all, the New York and London subway systems were built originally by private finance.

"Rail transit seems not to make economic sense given the population density in the Los Angeles area," says UCLA's Scott. "But longer-term, transit draws its own density. That's why (Collis P.) Huntington built the Pacific Electric--to draw residents to his Huntington Beach development."

Politicians and planners in the West San Fernando Valley, Crenshaw, Glendale and elsewhere, take note: Scott's message is not about transit but about overall economic planning. The great transit systems of other cities were built not for convenience, but to get working people to and from their jobs. That's why transit, especially in poor neighborhoods, is so vitally linked to jobs. And why New York, London and Tokyo function decade after decade without gridlock.

Los Angeles may never be like those cities, but with fresh thinking about transportation, and financing and information, as key components of a local economy, it can yet be something more: a font of new ideas for a 21st Century world.


Paying for Public Transit

Not surprisingly, given their love of the automobile, Southern Californians rank fairly low in mass-transit spending. Annual per-capita outlay for public transportation (both operating and capital expenses): San Diego*: $97 Orange County: $97 Houston: $161 Dallas: $203 Los Angeles: $252 Denver: $504 Chicago: $542 Philadelphia: $551 Miami: $741 New York: $800 San Francisco: $1,154 Washington: $1,478

* San Diego figure is from 1992; all others are from 1993.

Source: Transportation Department, Commerce Department

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