News:

The AARoads Wiki is live! Come check it out!

Main Menu

San Diego area tollway goes broke

Started by nexus73, August 05, 2011, 06:32:04 PM

Previous topic - Next topic

nexus73

http://www.landlinemag.com/todays_news/Daily/2011/Aug11/080111/080411-02.shtml

Traffic volume was about a third of what was expected.  The bankruptcy court valued the tollway at much less than it cost to build.  Now that the road heads back for public ownership, will the tolls continue?

Rick
US 101 is THE backbone of the Pacific coast from Bandon OR to Willits CA.  Industry, tourism and local traffic would be gone or severely crippled without it being in functioning condition in BOTH states.


J N Winkler

Fantastic news.  With luck this will encourage public agencies to stop chasing the toll road chimera and do the hard spadework required to develop broad-based user fees as revenue sources.
"It is necessary to spend a hundred lire now to save a thousand lire later."--Piero Puricelli, explaining the need for a first-class road system to Benito Mussolini

3467

No such Luck....read the posts in Midwest about the planned expansion of the Illinois Tollways.....far worse were the ideas from the reason foundation on Chicago Congestion....
At least the Illnois Tollway is a state agency with some public accountability and a track record
Reacting to the headline "House GOP plans massive ciuts to highways and Transit" The Illinois gov who once wanted to make the Tollways free said they seemed to be the only option

Brandon

Plus, 3467, projections for the I-355 extension turned out to be low.  It's already beating its projections for traffic.  In fact, for opening day, cars were 50-60 deep behind the work crews removing barriers (just like something out of the 1950s).
"If you think this has a happy ending, you haven't been paying attention." - Ramsay Bolton

"Symbolic of his struggle against reality." - Reg

oscar

Quote from: J N Winkler on August 05, 2011, 08:18:20 PM
Fantastic news.  With luck this will encourage public agencies to stop chasing the toll road chimera and do the hard spadework required to develop broad-based user fees as revenue sources.

I doubt the public agencies will change.  But with investors constantly taking haircuts when privately-run toll roads go bankrupt, some day they might hold out for higher returns, which would mean fewer toll roads get built.
my Hot Springs and Highways pages, with links to my roads sites:
http://www.alaskaroads.com/home.html

Brandon

Quote from: oscar on August 07, 2011, 09:45:41 AM
Quote from: J N Winkler on August 05, 2011, 08:18:20 PM
Fantastic news.  With luck this will encourage public agencies to stop chasing the toll road chimera and do the hard spadework required to develop broad-based user fees as revenue sources.

I doubt the public agencies will change.  But with investors constantly taking haircuts when privately-run toll roads go bankrupt, some day they might hold out for higher returns, which would mean fewer toll roads get built.

Maybe it'll just be the end of private toll roads.  The state agencies seem to do well in this regard, but then again, their toll rates are reasonable, unlike the private toll roads that have investors and shareholders.  The state agencies don't need to worry about profits, just maintenance, expansion, and paying off bonds.
"If you think this has a happy ending, you haven't been paying attention." - Ramsay Bolton

"Symbolic of his struggle against reality." - Reg

3467

I agree with you on both your comments. I just dont see a loser for teh Tollway in Northeastern Illinois( I really think they should do the mini-crosstown too)
I think the Orange county tollroads are doing OK Aren't they public?

J N Winkler

#7
Yes, the TCA (which owns the Orange County toll roads with the exception of the 91 Express Lanes, which were originally privately developed but are now owned by OCTA) is a public agency, and as far as I know they are in the black.  Public authorities do tend to depend on bonds rather than equity, so their main concern is debt service rather than the stockholders' profit expectations, and they can also use earnings from profitable routes to cover losses on unprofitable ones.  However, public ownership does not necessarily guard against financial problems.  NTTA got in trouble a few years ago and had a major slowdown in new construction when they bit off too much to chew buying prospective toll road corridors off TxDOT.  It is also not necessarily the case that public authority toll roads are cheaper on a per-mile basis.  By this standard a NTTA-owned toll road is about as expensive to use as a privately owned toll road.
"It is necessary to spend a hundred lire now to save a thousand lire later."--Piero Puricelli, explaining the need for a first-class road system to Benito Mussolini

Anthony_JK

It does seem like the publically run toll roads do seem be run more fiscally soundly than the fully private roads, probably due more to the democratic accountability of public agencies and the fact that because they depend mostly on public funding, they are much more careful and prudent with how they spend it.

I still prefer fully publically funded roads using gas tax and other user fees...but if tolls are necessary to build infrastructure, then so be it, I guess.


Anthony

oscar

Quote from: Anthony_JK on August 07, 2011, 07:03:47 PM
It does seem like the publically run toll roads do seem be run more fiscally soundly than the fully private roads, probably due more to the democratic accountability of public agencies and the fact that because they depend mostly on public funding, they are much more careful and prudent with how they spend it.

Maybe true for the newer public toll road agencies, that haven't had time for patronage and other wasteful practices to entrench.  But some of the older agencies in the Northeast could use privatization or other radical change, just to clear out accumulated inefficiencies.
my Hot Springs and Highways pages, with links to my roads sites:
http://www.alaskaroads.com/home.html

Scott5114

Plus, toll authorities can cross-pledge to allow weaker elements of the tollway system to be supported by stronger ones. OTA does this; the Chickasaw Turnpike is largely subsidized by the revenues from the Turner and Will Rogers Turnpikes. While this has obvious drawbacks (both practically and politically) it does allow for toll roads to be built in places where some kind of upgrade is needed, couldn't be sustained on individual toll revenue alone–a safety fix was badly needed for Scenic US-412 (then OK-33) around Locust Grove, OK, but the terrain was mountainous enough that building it as a free road was unfeasible, and projected traffic counts low enough that a toll road was as well. Cross-pledging allowed the road to go forward anyway.

But private toll operators usually only run one road, not a whole system like OTA or ISTHA does. They don't have the ability to cross-pledge.
uncontrollable freak sardine salad chef

3467

ISTHA Like OTA did cross pledge in the western end of the I-88 tollway but hasnt done it since.
There were two attempts to entice them (I-24 @ Chicago KC which followed another route that uses 88)  but were too short .
There is another attempt on US 20 and there is a thread in Midwest.
I really like that short little 2 lane road in OK.
Chicago and Indiana used their cash from the sales for other roads or othewr stuff(Chicago)
Did a California governmenal unit get and money for this in the first place? That would be another expense that a private route would have to cover ?

J N Winkler

Quote from: Scott5114 on August 11, 2011, 10:26:38 PMBut private toll operators usually only run one road, not a whole system like OTA or ISTHA does. They don't have the ability to cross-pledge.

Yes, that is true, but even if a private operator had multiple toll roads with the ability to roll over earnings from the more profitable ones to the less profitable ones, holding onto the less profitable ones would be considered unbusinesslike except in service of a larger strategic aim (such as maintaining a monopoly of some kind).  Businesses are expected to maximize shareholder value and that is generally understood to entail developing every single segment of the business as a "profit center" unless there is a compelling reason not to.  This is the reason private toll operators are keen to unload themselves of toll roads whose gross revenue stream won't cover debt service.
"It is necessary to spend a hundred lire now to save a thousand lire later."--Piero Puricelli, explaining the need for a first-class road system to Benito Mussolini

NE2

There may be useful parallels with the development of streetcar lines. In the late 19th and early 20th centuries, developers would build lines to serve the areas they were developing. After all the land was sold, the lines couldn't make a profit on their own, and were taken over first by local utility companies (though in many cases the utilities owned streetcar lines from the beginning of electrification) and later by the government (after a federal law was passed prohibiting joint ownership of utilities and streetcars).

Interurban streetcar lines were always a very speculative area, declining steeply in and after the 1920s. Some of the later abandonments were owned by then-steam railroads, initially bought to preserve a monopoly but later used to siphon off local passenger traffic to preserve the main line for freight and limited higher-speed passenger service. Most of the last interurbans to disappear (including one that still operates in northern Indiana, finally split into a separate freight company and passenger authority ca. 1990) had heavy freight business with which they subsidized passenger trains.
pre-1945 Florida route log

I accept and respect your identity as long as it's not dumb shit like "identifying as a vaccinated attack helicopter".

Alps

I think in this particular case, it's just too far away from anything. The economic bust most likely hurt, because development just about reaches out to CA 125, and likely would have filled in nicely with another 3 years of growth. As it stands, the improvement of I-905 makes it more attractive to continue west from that crossing as well as north via the pending 125 connection (I assume both will open at the same time). I noticed that even using local roads to bypass the toll road went fairly quickly with few traffic lights (several right turns, and permitted lefts on divided roads with light traffic). Yes, I would have saved 5-10 minutes on the highway, but when you're talking about delay avoidance, 5-10 minutes pales in comparison to what you might sit in on the 405 or 5, so it may be worth the $8 for the time. (At my current salary, 10 minutes is definitely worth $8, for example.)

Desert Man

Tollways cost money to use the roads. The FastTrak in Orange County and Ted Williams Parkway in San Diego are supposedly to be smooth ways to get around the rapid-growing suburbs of a large metropolitian area. The highways seem to be in scenic view parks or reserves. As recently as 30 years ago, these areas the roads crosses were still uninhabited wilderness devoid of any people.
Get your kicks...on Route 99! Like to turn 66 upside down. The other historic Main street of America.

Chris

I'm not surprised to see toll roads go bankrupt. It's is frequently overestimated how willing motorists are to pay tolls. They had some problems with this in Australia as well. You can toll roads when there is no alternative, as in New York City, San Francisco or the Chesapeake Bay Bridge. It's fairly easy to get from those new developments along the South Bay Expressway towards job centers by driving the east-west routes there for a few miles and get on the 805. If you want to go to the alternative border crossing into Mexico you may as well use California 905.

agentsteel53

what I hated the most about the 125 was one of the exit tolls requiring exact payment to be fed into a machine.  or: "who the fuck has precisely $2.50 in their wallet?"

I remember inserting a 10, losing $7.50 in the process, and driving off in a huff, wondering when they would get around to accepting credit cards.  there definitely were no warning signs anywhere on the road stating "we give you neither hope nor change."
live from sunny San Diego.

http://shields.aaroads.com

jake@aaroads.com

Riverside Frwy

The South Bay expressway was destined to fail. Just because it worked for Orange County, San Diego thought they could do the same. Unlike the OC, CA 125 does not bypass any heavily important congested routes like CA 73 and CA 241 does., and it doesn't have the wealthy demographic willing to pay tolls, especially when the alternatives aren't overly congested nightmares. Not only that, It connects to the Border! Nobody wants to pay to go to the border, especially when there are plenty of other crossings. It doesn't provide access to job centers or anything....just the border.

ARMOURERERIC

Another aspect that doomed the former owners: They had to pay property tax on the ROW, based on a top of market $750 Million in land/improvement value, when all attempts to have it reduced to $400Million failed, then came the bankruptcy filing.

Supposedly SANDAG was/is the the only bidder or highest bidder at, I think $350 Million, which was less than construction costs, and they will pay no property tax.  It is being billed as a big win here, because supposedly they can cancel $700 million in I-805 improvements and make up capacity be doing a less expensive widening on 125 and reduce tolls.



Opinions expressed here on belong solely to the poster and do not represent or reflect the opinions or beliefs of AARoads, its creators and/or associates.