Caltrans using suits to fund roads

Desperate to raise cash to make room for more cars on the freeways, California’s main road-building agency is wielding an unexpected weapon: the state’s environmental laws.

Caltrans, long foiled by lawsuits accusing it of recklessly plowing over the habitat of endangered species, polluting the air and contaminating waterways, is now filing its own legal challenges. Using a law that says developers must mitigate the impact of their projects on highways, the agency is suing cities and builders for money to fund freeway expansion and other improvements that relieve congestion.

Developers say the suits are extortion: Pay the state’s ransom or see projects bogged down in litigation indefinitely. Local governments complain that the state is trying to grab funds that should be going to their streets and to enviro-friendly transportation projects.

The state has challenged, or threatened to challenge, major projects in Sacramento, Fresno, Irvine and elsewhere, leading to settlements such as a $1.1-million agreement in Monterey County. In Fresno, builders have paid millions in fees over the past year.

“It is very apparent that these lawsuits have become nothing more than a fundraising source for Caltrans,” said Rex Hime, executive director of the California Business Properties Assn.

The agency’s moves come only months after voters approved $20 billion in borrowing for transportation projects. Experts have cautioned that the state needs to spend many times that sum to substantially improve traffic conditions.

Adding a carpool lane to a 10-mile stretch of the 405 in Los Angeles County, for example, will cost taxpayers more than $1 billion. Meanwhile, California’s population is growing rapidly, which means more cars on the road in the coming years.

“Caltrans is recognizing we need to be more strategic and smarter” about raising funds for freeways, said Gregg Albright, a planning official at the agency. “There just isn’t enough of a revenue stream otherwise. The consequences of not doing this are significant.”

Albright said Caltrans has had the authority to force developers to pay impact fees for decades but has opted not to use a heavy hand. The agency slowly began to change its policy a few years ago and in recent months has become considerably more aggressive.

“Developers should contribute their fair share,” Albright said.

The agency’s push has drawn a backlash from building and taxpayer groups, who are lobbying Gov. Arnold Schwarzenegger to stop the lawsuits. They call the impact fees illegal taxes.

The groups say the fees are being demanded arbitrarily, from some and not others; that local taxes have already been increased to raise money for freeways; and that Caltrans lacks legal authority to make its demands.

They say Caltrans is suing, or threatening to sue, over projects that could actually get Californians off the freeways.

Among those projects are a handful of skyscrapers going up in a patch of downtown Sacramento. The buildings will include luxury condos, a hotel, offices and shopping. The idea is to transform a section of town dominated by outdated state buildings into a vibrant urban neighborhood linked to the rest of the city and region with public transit and bicycle paths.

Nearby, the city hopes to transform a 240-acre Superfund site -- an old rail yard -- into a community with 10,000 homes, as well as restaurants and shopping and entertainment complexes. It would be one of the nation’s largest such projects on once-contaminated urban land.

City officials say the plans epitomize smart growth. The projects would give residents an alternative to the sprawl of the Central Valley by allowing them to live, work and play downtown and, presumably, reduce their presence on local freeways.

Caltrans applauds that. But agency officials note that all the construction would occur at the intersection of several major highways. It is undeniable, they say, that traffic on those roads would increase when residents from other parts of town drive to the development to shop, dine or work -- and when people living there go elsewhere.Caltrans has extracted $75,000 in impact fees so far from the developer of a single office tower who agreed to pay rather than fight a protracted legal battle. The agency says the money will be used to install metering lights on a freeway onramp.

City officials say Caltrans has indicated that it expects to also collect fees -- possibly totaling in the millions -- from the other developers in the area. The money would be used to make improvements that would ease congestion on I-5, which runs right through town.”The city believes that what Caltrans is asking ... is unlawful,” said city attorney Eileen Teichert.

Irvine is where the dispute over fees began, in 2003, when Caltrans filed suit over plans to develop the former El Toro Marine base into a park that would include new homes and stores -- the state’s first such lawsuit in two decades. The state argued that the project’s environmental impact reports underestimated the number of car trips the development would generate.

A settlement was reached within a few weeks that will allow Caltrans to collect substantial fees if the project is approved.

In Monterey County, Caltrans is suing to force the builders of the largest proposed development in county history -- a mix of homes, retail space, a golf course, schools and even a wastewater treatment plant -- to bankroll what could amount to millions of dollars in improvements to the 101 Freeway.

Last year, the state used the threat of a lawsuit in the area to get the developer of a shopping center in Salinas to pay for $1.1 million worth of work on that freeway. In Fresno, some officials are frustrated a year after they settled a lawsuit with Caltrans that resulted in a $170,000 fee against the developer of an apartment complex. Since then, says Councilman Jerry Duncan, developers in his city have paid millions in similar fees to fund construction on Routes 99, 41 and others.

But the state is going easier on neighboring cities, Duncan said. He cited a church in Fresno that had to pay $3,000 to expand its Sunday school, while a large Target shopping center a mile away in Clovis paid nothing.

He called Caltrans’ actions “completely unfair.”

Agency officials note that cities around Fresno have in fact contributed millions to state highways. They also say some developers are hit up for more than others because their projects cause more congestion.

Urban planners are reluctant to take sides.

“This is one of those troubling issues where both sides are right,” said Richard Little, director of the Keston Institute for Infrastructure at USC. “Everything the cities are saying is true. These types of developments should be encouraged.

“But the people who are going to occupy them won’t stay there all the time,” Little said. “They eventually do leave the reservation. And they will use the freeways.”

Builder and taxpayer groups sent a letter to the governor several months ago comparing Caltrans to radical environmental groups that drag developers into court in hopes of delaying projects indefinitely, and asking him to pull the plug on Caltrans litigation. The governor declined, but his office told the groups that Caltrans would file lawsuits only when justified.

“We don’t want to stop projects,” said Caltrans’ Albright. “We want to avoid the collapse of a highway system that supports the economy.”

evan.halper@latimes.com