Tollway Owners in Driver’s Seat

Orange County’s toll road operators thrive on gridlock. The more congested the public highways and the more miserable the commute, the more they can charge motorists to use their less-crowded pavement.

They even have special agreements with the state to keep it that way for decades to come.

Under so-called noncompete clauses, toll road operators can veto improvements to public highways--such as new lanes--if the work would threaten to take customers away from the pay-as-you-go roads.

In growing metropolitan areas with bumper-to-bumper traffic that begins to thicken before dawn, the restrictions mean the California Department of Transportation and local governments are largely powerless to ease congestion on public highways that run close by Orange County’s toll roads.

So broad are these protections that the state could be prevented from making freeway improvements to accommodate motorists headed to a proposed commercial airport at the former El Toro Marine base. An effort to eliminate major freeway choke points in the heart of Orange County could be in jeopardy. And widening the Riverside Freeway, one of the most congested highways in the state, is virtually impossible for another 29 years or until traffic thickens to near-gridlock.

“Not everyone is happy about them,” said Cypress City Councilman Tim Keenan, a member of the Orange County Transportation Authority board of directors. “Toll roads are an evil necessity. They were an innovative solution to build freeways, but the burden of their success should not fall on all the drivers in Orange County.”

Orange County has more toll roads than anywhere else in California. There are 10 miles of pay lanes along the center of the Riverside Freeway and 51 miles of tollways operated by the Transportation Corridor Agencies. The $3.7-billion, corridor-agency system includes the Eastern, Foothill and San Joaquin Hills tollways, as well as a short stretch of Laguna Canyon Road.

The protection agreements with the state could stand in the way of widening at least a third of the county’s 222 miles of freeways, including 30 miles of the Riverside Freeway and stretches of the Santa Ana and San Diego freeways through central and south Orange County.

The advent of the toll roads and the protection clauses date to another era when the state had little money to spend on freeway work. Supporters of the tollways say the problems caused by the noncompete clauses are small compared to the congestion that would have overwhelmed existing freeways had the roads not been built. Since 1975, Orange County’s population has jumped from 1.7 million to more than 2.8 million. The Inland Empire’s population has more than doubled in that time.

To attract financing for new roads, public-private partnerships were developed in the late 1980s and early ‘90s with special agreements to guarantee the tollways some degree of success so investors would be willing to buy bonds or lend money for the projects.

“These highways would have never been built or never built in the time frame we built them in,” said Walter D. Kreutzen, the corridor agency’s chief executive. “There is still a shortage of state funds for highways.”

Kreutzen and other tollway operators point out that despite the protection agreements, some public transportation projects are still possible. Rail service, carpool lanes for three or more people, interchange improvements, and safety and operational improvements can still go forward, he said.

But skeptics remain, including state Atty. Gen. Bill Lockyer. More than a decade ago, Lockyer, then a state senator, warned his colleagues that restricting highway improvements and new road construction to accommodate toll roads could come back to haunt California.

“What we now have is a two-tiered system: a road system for the wealthy and a deteriorating one for the rest of us,” Lockyer said. “The toll road is just a polite form of highway robbery.”

The most controversial protection clause involves the privately owned 91 Express Lanes that run for 10 miles from northern Anaheim to the Riverside County line. The $130-million project opened in 1995.

Since then, the toll lanes--two in each direction--have offered paying motorists relief from the crowded Riverside Freeway.

Every day, 270,000 trips are made through this stretch of the 91, turning the freeway into a virtual parking lot during the morning and evening rush hours. The crush has been a bonanza for California Private Transportation Co., which operates the private lanes. Tolls have been hiked seven times in five years, and still two of the four private lanes are reaching capacity in the evening. Express Lane commuters now pay more than $8 a day for a round trip at crunch time and log about 33,000 daily vehicle trips.

Under its pact with Caltrans, California Private Transportation Co. can veto highway improvements along 30 miles of the Riverside Freeway if the work threatens to take customers away from the toll lanes.

Tollway Becomes Public in 2030

The “zone of absolute protection” extends from the Los Angeles County-Orange County line to Interstate 15 in Riverside County, just past Corona. The franchise agreement expires in 2030, when the Express Lanes are scheduled to become a public highway.

When Caltrans proposed widening the Riverside Freeway in the late 1990s, the tollway owners went to court and forced the agency to abandon the project.

Under terms of the eventual settlement, the state can add public auxiliary lanes on the east side of the freeway when vehicle trips reach 370,000 a day, a 37% increase over current volume. Projections indicate that by 2015, there will be at least 400,000 daily vehicle trips through the corridor.

Last year, Riverside County sued the tollway owners and Caltrans, alleging that the state violated the public trust and abandoned its responsibility to improve the Riverside Freeway. A few months ago, the city of Corona filed suit against Caltrans, seeking damages for traffic detouring through the town to avoid congestion on the Riverside Freeway.

Riverside and Corona officials describe the tollway owners as a monopoly that controls the fate of a public highway. They say major improvements to relieve gridlock on the Riverside Freeway can’t be made until the tollway owners’ franchise is canceled.

“The agreement has allowed a private company to put a stranglehold on the Riverside Freeway,” said Jeffrey V. Dunn, an attorney for Riverside County. “You can’t put a company’s profit above public welfare.”

California Private Transportation Co. officials say they have a legitimate contract with Caltrans. The Express Lanes, they say, provided congestion relief when state and local government had little money for freeway construction. Some studies indicate that the toll lanes have modestly reduced average travel times on the freeway.

“There are no projects on the drawing board and there’s no money to fund them if there were,” said Greg Hulsizer, general manager of the Express Lanes.

Plans to Reduce Congestion at Risk

But there are plans on the drawing board in the center of Orange County that could be at risk. Officials at the Transportation Corridor Agencies in Irvine are evaluating whether an OCTA plan to reduce congestion at five choke points on the San Diego and Santa Ana freeways will conflict with the protection agreement for the San Joaquin Hills Tollway.

The OCTA wants to widen offramps and bridges, add short auxiliary lanes and improve intersections at freeway interchanges. The work on Interstate 5 would be at Alicia Parkway, La Paz Road and Oso Parkway. On the northbound San Diego Freeway, improvements would be made at Sand Canyon Avenue and Culver Drive. Auxiliary lanes also would be added to Interstate 5 and the San Diego Freeway from Sand Canyon Avenue to Alicia Parkway.

The proposals represent “operational” improvements, OCTA officials said, which are exempt from the corridor agency’s protection contract.

But corridor agency officials said the choke-point projects--when taken together--essentially will add a fifth lane to Interstate 5 and the San Diego Freeway. Potentially, they contend, the improvements could draw motorists away from the San Joaquin Hills Tollway, which already has had financial setbacks. Last year, the tollway’s bond rating was downgraded because of lower-than-expected revenue.

James D. Brown, the corridor agency’s director of engineering and environmental planning, said a preliminary analysis shows that the choke-point projects would have a “negative impact” on the San Joaquin Hills Tollway. He could not say how much the tollway would be affected.

Under the tollway’s franchise agreement, improvement projects on competing public highways must compensate the corridor agency for lost revenue to make sure the agency can repay its bonds. The agency is a nonprofit government entity and its agreement, which expires in 2020, is less restrictive than the Express Lanes’ protection clause.

“We are not here to stop projects,” Brown said, “but we need a safety net to keep potentially competing projects from irreparably harming our financial obligations.”

The OCTA’s choke-point project isn’t the only issue involving the corridor agency and its protection agreement.

If the former El Toro Marine base is converted to a commercial airport, Caltrans officials said, freeway improvements could be affected by the restrictions.

If an airport is built, El Toro is expected to draw about 140,000 vehicle trips daily by 2010, a full decade before the corridor agency’s franchise agreement expires. The proposed airport, according to county plans, would handle 18.8 million passengers a year.

In its response to the county’s environmental report for the airport, Caltrans said in July that El Toro planners have underestimated the amount of traffic the airport would create and that more freeway improvements should be considered.

Caltrans officials said the corridor agency’s protection clause might drive up the cost of improvements if the agency needs to be compensated for lost revenue.

“Any project has noncompete impacts, but it is hard to say what the impacts are at this point,” said Jim Beil, a Caltrans deputy district director in Irvine. “They need to be evaluated on a case-by-case basis.”

County officials planning the airport said their traffic forecasts are accurate, and that meetings will be held to reduce any friction between the corridor agency and Caltrans.

The potential for conflict is small, they said, because the airport would increase traffic on the Eastern and Foothill toll roads, resulting in more revenue for the corridor agency. Most of the road improvements, planners said, probably would occur on the Foothill Tollway, not Interstate 5, and the San Diego Freeway.

The main freeway entrance, for example, to the proposed airport is planned for the toll portion of Laguna Canyon Road, meaning those headed to the airport on a freeway may end up paying a toll to get there.

Commission Rewrites Franchise Agreement

Because of the controversies surrounding protection clauses, the California Transportation Commission has rewritten the franchise agreement for California 125, an 11-mile toll road expected to open in San Diego County by 2005. The contract will permit the expansion of nearby freeways.

“We forced the removal of those things that have made the 91 such a challenge,” said Robert Wolf, a Riverside County real estate developer who served on the transportation commission for eight years until December.

“The rules for [the 91 Express Lanes] were not thought out as carefully as they might have been,” Wolf said.

Despite the problems involving the Express Lanes, some transportation experts and ranking government officials have not ruled out the use of protection clauses to help build future highways when government funding is limited.

“We need to come up with formulas to reimburse franchise holders for additions to public roads,” said Bob Pool, director of transportation studies at the Reason Public Policy Institute.

“We can allow relief on public highways, but it shouldn’t be at the expense of those who have good-faith contracts with the state.”