O.C.’s Tollway Operators in Driver’s Seat

Orange County’s toll-road operators thrive on congestion. The more jammed the public highways and the more miserable the commute, the more they can charge motorists to use their uncrowded 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 improvements 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 noncompete caveat means that Caltrans and local governments are largely powerless to ease congestion on public highways next to or within a few miles of Orange County’s toll roads.

So broad are these protections that the state could be prevented from making upgrades to accommodate motorists headed to a new airport at the closed 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 the point of near-standstill.

“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 down the gut of the Riverside Freeway and 51 miles of tollways operated by the Transportation Corridor Agencies. The $3.7-billion corridor-agency system includes the San Joaquin Hills, the Eastern, and the Foothill toll roads, 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 222 miles of freeways in the county, 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 an era when the state had little money to spend on freeway work. Supporters of the toll roads say the problems caused by the noncompete clauses are small compared to the congestion that would have clobbered existing freeways had the tollways not been built. Since 1975, Orange County’s population has jumped from 1.7 million to more than 2.8 million. The population of the Inland Empire has more than doubled.

To attract financing for new roads, public-private partnerships were developed in the late 1980s and early 1990s with agreements to guarantee the tollways some degree of success.

“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 officer. “There is still a shortage of state funds for highways.”

Kreutzen and other toll-road 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 move forward.

Questions Raised About Equal Access to Roads

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

“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 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 clogged Riverside Freeway.

Every day, 270,000 vehicle trips are made through this stretch of the Riverside Freeway, turning the road into a virtual parking lot during the morning and evening rush hours. The crush has been a bonanza for the 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 freeway improvements along 30 miles of the Riverside Freeway if the improvements threaten to take customers away from the toll lanes.

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, at which time the Express Lanes are to become public.

When Caltrans proposed widening the Riverside Freeway in the late 1990s, the toll-lane owners went to court and forced the powerful 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 conditions. Projections indicate that by 2015, there will be at least 400,000 daily vehicle trips through the corridor.

Monopoly or Friend of State? Courts to Rule

Last year, Riverside County sued the toll-lane owners and Caltrans, alleging the state violated the public trust and abandoned its responsibility to improve the Riverside Freeway. A few months ago, the city of Corona filed a lawsuit against Caltrans, seeking damages for traffic detouring through the town to avoid freeway traffic.

Riverside and Corona officials describe the toll owners as a monopoly that controls the fate of a public highway.

“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 contend they have a legitimate contract with Caltrans. The Express Lanes, they say, provided congestion relief at a time when state and local government had little money for freeway construction. Some studies indicate that the toll lanes have modestly reduced 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.

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.

OCTA would like 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 as well as La Paz Road and Oso Parkway. On the northbound San Diego Freeway, improvements would be 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 pact.

But corridor agency officials said the choke-point projects--when taken together--will essentially 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 toll road’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 agency and its agreement, which expires in 2020, is less restrictive than the Express Lanes’s 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.”

Drive to Future El Toro Could Be on a Tollway

OCTA’s choke-point project isn’t the only issue involving the corridor agency and its protection agreement. If the former El Toro Marine Corps Air Station is converted to a commercial airport, Caltrans officials said that improvements to freeways, such as Interstate 5 and the San Diego Freeway, could be affected.

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 airport, according to county plans, would handle 18.8 million passengers a year.

In its response to the county’s airport environmental report, Caltrans said in July that El Toro planners have underestimated the traffic the airport will create and that more improvements to freeways 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.

County officials planning the airport say their traffic forecasts are accurate.

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

The main freeway entrance to the airport, for example, 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.

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

“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 2000. “The rules for Highway 91 were not thought out as carefully as they might have been.”

Despite the problems involving the 91 Express Lanes, some transportation experts and high-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.”