Opponents of Toll Lanes Sale Trying Last-Ditch Maneuvers

Critics of a $274-million transfer of the Riverside Freeway toll lanes to a nonprofit group are planning a last-minute assault to try to derail the deal.

“We need to block this thing, hold it up somehow, until we can have a thorough examination,” Riverside County Supervisor Bob Buster said Friday. “We need to assure ourselves that this is not some sweetheart deal, paying an exorbitant price to these sellers.”

Buster plans to ask fellow Riverside supervisors on Tuesday to go to court to prevent the sale of up to $274 million in bonds to finance the sale. He also wants to send letters asking Gov. Gray Davis and local lawmakers to intervene.

Buster and others are suspicious of ties between the consortium of companies that want to sell the toll lanes and NewTrac, the nonprofit group willing to buy the lanes.

Documents show that the current toll lane owners, the California Private Transportation Co., came up with the concept of selling its franchise agreement to a nonprofit group, then identified candidates to serve as the nonprofit’s board members. The companies then loaned the nonprofit $1 million in seed money.

“Is that really an arm’s-length transaction? I don’t think so,” said Robert A. Wolf, state transportation undersecretary for former Gov. Pete Wilson. “The law says it has to be arm’s length.”

About two years ago, NewTrac officials asked Wolf and others in the Wilson administration to bless the plan. Wolf and Dean Dunphy, then secretary of business, transportation and housing, refused their consent, saying the deal wasn’t in the public interest.

In October, Caltrans director Jose Medina endorsed the transfer to NewTrac.

The group plans to issue bonds Wednesday, and the closing will be later this month.

NewTrac’s chairman, Gary Hausdorfer, said Friday that the California Private Transportation Co.’s broker, Lehman Bros., initiated the deal but that Hausdorfer was responsible for choosing the Orange County and Riverside County businessmen who constitute the board of directors.

“Lehman Brothers brought the seller to me,” Hausdorfer said. “They came to me, and I picked the board members.”

Hausdorfer insists that NewTrac is paying the appropriate price for the toll lanes franchise. Revenue projections show that the toll road will bring in enough to pay off the bonds and that there will be enough left over to make road improvements along the Riverside Freeway corridor.

Buster, the Riverside supervisor, isn’t so sure.

“Millions of toll lane users and commuters will be hurt by unnecessarily higher tolls and congestion if the California Private Transportation Co. is being paid more than the actual market value of the franchise,” he said. “Riverside County needs to assure that this sale gets the public scrutiny that it demands.”