Sellers Get Back $100 Million in Toll Lanes Sale

Three companies that gambled to bring private toll lanes to Orange County will receive about $100 million from the deal and 90 of their employees will keep their jobs operating the 91 Express Lanes for their new bosses.

Financial representatives declined to reveal just how much profit they will recoup from the deal after they pay off various expenses that went into keeping the toll lanes afloat while it lost money for three of its four years.

“We made some money, yes, and we will be pleased with it,” said Mark Hasebroock, chief financial officer for the Omaha, Neb.-based California Private Transportation Co. “But it isn’t something that is a 500-foot home run for us.”

On Thursday, an Orange County nonprofit group of four businessmen officially announced plans to pay about $220 million for the 91 Express Lanes project, a 10-mile stretch of the Riverside Freeway opened in late 1995 as California’s first private toll road.

The sellers, a consortium of a Colorado telecommunications firm, a California construction company and the world’s largest toll-road operator, said they will use $120 million of that amount to pay off loans secured to build the lanes, which run between Anaheim and the Riverside County border.

The other $100 million will be divided among the three companies, which formed under the name California Private Transportation Co. One of its members, the French firm Cofiroute, will stay on and continue to manage the 91 Express Lanes for at least five years under a new contract.

The total cost of the bond issue is about $260 million, which includes a mandatory $26-million reserve fund and about $14 million in other closing costs. But the exact sales price will not be fixed until a Wall Street bond sale scheduled for Nov. 30, said Gary Hausdorfer, the former mayor of San Juan Capistrano and new chairman and president of the nonprofit group, called NewTrac.

Hausdorfer’s group will use the bond proceeds to buy the franchise agreement and assets from the California Private Transportation Co., which will continue to provide jobs to 90 workers.

The fact that the consortium stands to make money on the sale of the 91 Expressway Lanes means that other private toll road ventures may still be successful.

“This group is not selling because they’re not making money,” said Adrian Moore of the Reason Public Policy Institute. “Clearly they are. They’re going to sell it to cut their capital costs, the cost of their debt.”

Hausdorfer conceded as much during a news conference in Anaheim Hills on Thursday to announce its purchase. The nonprofit group will save money because it will not have to pay taxes, and it also qualifies for lower interest rates than private companies.

NewTrac will owe about $6.2 million a year repaying its debt--almost half the amount of debt carried by the private companies, Hausdorfer said. Because the group is a nonprofit, it cannot keep excess revenues. That means NewTrac will be able to give an estimated $6 million each year to transportation authorities in both Orange and Riverside counties for improvements such as a connector road to the Eastern toll road.

“That way [commuters] won’t bypass our toll road to get to their toll road,” said Jim Guthrie, a Riverside County construction company owner who will serve with Hausdorfer on the NewTrac board of directors.

Hausdorfer will serve as chairman and president of NewTrac, a salaried position, with a staff of four or five. Hausdorfer said his salary hasn’t been set yet, although board members will receive $1,000 for each board meeting they attend.

Three other business leaders will join Hausdorfer and Guthrie on the board of directors: S. Robert Kallenbaugh, president of the Irvine engineering firm of Robert Bein, William Frost & Associates; Lewis M. Webb, president of Webb Automotive Group and the former owner of several car dealerships in Los Angeles and Orange County; and a Riverside County resident who has not yet been selected.

The sale brings good and bad news for commuters. Starting in January, the carpool lanes will once again be free for cars containing three or more people, as it was from when it opened in December 1995 until January 1998. But commuters can brace for eventual rate hikes.

“We have no immediate plans to raise the tolls, but it is entirely possible,” Hausdorfer said.

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Times staff writer Megan Garvey also contributed to this report.