Buying Toll Lanes Might Be Way to Go

After agreeing to pay $4 million in public funds to a private toll-lane operator for the right to widen the traffic-clogged Riverside Freeway, Orange County transportation leaders now say they must buy the tollway or risk being nickeled and dimed for years to come.

The Orange County Transportation Authority board agreed this week to pay the $4 million to the owners of the 91 Express Lanes for the right to improve a 1,000-yard stretch of the freeway where traffic bottlenecks just east of Coal Canyon Road.

The owners of the toll lanes--which run down the middle of the freeway for 10 miles--have the state-granted power to challenge improvements to the Riverside Freeway or be compensated for the possible loss of paying customers.

Even though they agreed to the $4-million payout, OCTA officials say they’d rather buy the entire toll operation than spend millions each time they want to reduce congestion on one of the busiest state highways in Southern California.

“There’s the frustration of having to shell out money whenever we need to make an improvement,” said Cypress City Councilman Tim Keenan, vice chairman of the OCTA board. “If we could get control of the Express Lanes, the dominoes would fall.”

Transportation officials face a similar situation in other areas of Orange County, where OCTA could be forced to compensate operators of the Eastern, Foothill and San Joaquin Hills toll roads. The Transportation Corridor Agencies, which oversees the operation of these turnpikes, also has a protection clause that could force OCTA to pay for the right to improve freeways near the toll roads.

The $4-million payment to owners of the 91 Express Lanes marks the first time such a compensation clause has been exercised. Keenan and his OCTA colleagues say the only way to avoid more payments is to purchase the tollway.

Although OCTA has no immediate plans for widening the freeway, authority officials say there is the potential for future projects because of the region’s explosive population growth, particularly in the Inland Empire.

Standing in the way, however, is the 30-year franchise agreement between Caltrans and the California Private Transportation Co., the owner of the turnpike.

The contract grants the Express Lanes the right to veto freeway improvements and new road construction if those projects threaten to take away motorists, who pay up to $8 for a round-trip during rush hour. The agreement covers 30 miles of the Riverside Freeway from the Los Angeles-Orange county line to Interstate 15.

Supporters of the tollway say that without protections from competition, no private company would have been willing to build the Express Lanes.

The same reasoning is behind franchise agreements with the TCA--a governmental body that operates 51 miles of toll roads. Although the agency does not have veto power over nearby highway projects, it must be compensated for potential losses of business.

OCTA officials say the agency’s agreement might force OCTA to hand over tax dollars just for the right to undertake five chunks of roadwork along the San Diego and Santa Ana freeways.

Of the two tollway systems, the most controversial agreement involves the 91 Express Lanes, which opened in 1996. Although the four-lane turnpike has provided some relief to motorists, critics say it is a stumbling block for future attempts to reduce congestion.

Riverside County has gone to court to overturn the tollway’s protection agreement with the state. The lawsuit, which could go to trial later this year, claims the agreement is unconstitutional.

On a second front, OCTA is trying to buy the lanes to regain government control of the Riverside Freeway. Negotiations are set to begin in the weeks ahead and price will be a key factor. There has been speculation that the lanes are worth $200 million to $300 million. They were built for $135 million.

For now, the only way for a public agency to get around the agreement is to compensate the owners of the Express Lanes for customers who might shift to the free lanes if traffic conditions are improved.

For OCTA’s current bottleneck project, authority and Express Lanes engineers calculated what they thought would be the potential loss in tollway traffic from adding a sixth lane on the westbound side of the highway. The lane would extend 1,000 yards east of Coal Canyon Road.

After negotiations, they settled on a $4-million loss in business for the tollway. The total cost of the project, including the payment, is about $12 million.

“This is proving to be a very costly way to go,” said Riverside County Supervisor Bob Buster, an opponent of the Express Lanes. “To have an impact on the 91, OCTA has to either purchase the lanes or buy back the franchise bit by bit.”

Buster said Orange County should consider joining the Riverside lawsuit or at least monitor its progress before making a commitment to buying the turnpike. If Riverside County prevails, Buster believes the purchase price might be far lower than what Orange County is able to negotiate.

OCTA officials say there is a good possibility of closing a deal if buying the lanes turns out to be cheaper and more effective than doing a series of small projects to relieve congestion. They also say the lawsuit could take five to 10 years to resolve.

OCTA board Chairman Todd Spitzer, who is also a county supervisor, contends the authority has considerable leverage against the Express Lanes to keep the asking price down. Pressure is coming from Riverside’s lawsuit, he said, as well as from anti-toll road sentiment and a proposal to build a highway through the Cleveland National Forest to better connect the counties.

“We have the clout to get them to the table,” Spitzer said. “We are not going to be taken by these folks. I’ll be first to walk away if they are going to exploit us.”

Although they are willing to discuss a possible sale with OCTA, the managers of the Express Lanes contend the cheapest and quickest way to improve the freeway is to extend their pay road into Riverside County. They say they are also willing to negotiate other highway projects that could further relieve congestion on the Riverside Freeway.

For the lane addition, “We were able to reach a compromise that everyone is happy with,” said Greg Hulsizer, general manager of the Express Lanes. “The $4-million payment recognizes the importance of our franchise and the need to make improvements to the 91.”