Read the full editorial here:
http://www.signonsandiego.com/news/2011/aug/15/out-of-bankruptcy-a-steal-for-taxpayers/
SANDAG has taken steps to buy the SR125. This editorial asks appropriately challenging questions, but sees the wisdom the Board of SANDAG moving on this opportunity to purchase the road.
Comments 14
I guess I still don’t get it. Why does the region benefit from picking this road up for $300+ million? It is not like they can take SR125 away. Let it revert to private ownership and, most importantly, keep SANDAG OUT of the hassles that go along with trying to set tolls. Least the board forget, you wasted HUNDREDS of hours dealing with the Coronado Bridge toll issue. Just wait for the 8 hour meetings every time a future board considers ajusting the tolls as you try to deal with maintenance issues or pushes to unionize your toll takers. Don’t violate a core conservative principal – if the private sector can (and they do all the time) operate a line of business government should tread very very carefully.
I appreciate your concerns, but here’s another core conservative principle…
Don’t have the government spend 700 million tax dollars to build freeway lanes that the government can buy for $350 million tax dollars. (No need to do the planned 805 managed lane improvements as the 125 is a replacement)
It’s called maximizing taxpayer bang for the buck, and improving the regional transportation system which is a critical component of economic vitality and a core SANDAG mission.
Honestly that still doesn’t make sense. 125 was there yesterday and will be there tomorrow. They are not going to SHUT the 125 down. The capacity is still the same. I don’t see how SANDAG owning the lanes maters…unless…..
The argument is that the TOLLS ARE TOO HIGH – that there is a different price between what maximizes corridor capacity vs. what is the best price for ROI for operator. But then you have to add together the COST of purchasing AND the opportunity cost for setting tolls at a price lower than what is the most profitable level.
And the property tax and tax free bond arguments are also kinda weird – as a resident I frankly am not really happy about a taxpaying business being taking over by a non-tax paying government entity.
Oh and be ready. Since SANDAG will now own 125 and will have a vested interest in not canabalizing those tolls, get ready for decades of fun fights over improvements on the 805 corridor.
Sorry friend,
Nobody was “taken over” by SANDAG. This was a post bankruptcy negotiated buy/sell agreement.
Also, the I-15 managed lanes have congestion based variable tolls on the two managed lanes in either direction.
SANDAG operates those lanes and set the tolls. No big drama ensued.
The SR125 could be operated the same way and already uses the same technology, or the tolls could simply be lowered to increase and induce use of the road.
These are decisions the Board will make in the future at public meetings after analysis shows the likely impact of the options if chosen.
This, of course all depends on if SANDAG completes the transaction.
Taken over? Sure, you are buying them. Just like when Google today, “took over” Motorola Mobility.
I-15 comparisons a bit misleading. Coronado Bridge more appropriate. Why, because unlike I-15, where “free but congested” options sit side by side, 125 in places over 5 miles from 805. You don’t think the residents of Otay Ranch are going to push for lowest tolls possible? Ditto Mayor of CV? And of course the board will make it – and they would be saints if they did not feel pressure from those that will get a concentrated benefit (in this case residents of eastern CV) while imposing a diffuse cost (the subsidy) on the rest of us.
You still didn’t explain on how changing who owns the toll road somehow increases capacity.
OK, I’ll give it one more try…
The SANDAG prepared 2030 and 2050 RTP anticipate building additional lanes on the 805 to relieve future demand. This will cost about $700,000,000 to do and displace MANY property owners.
SANDAG is currently in the process of building two diamond lanes on the 805 for which SANDAG received a $100,000,000 grant and no property needs to be taken.
Now then: INSTEAD of the future additional lanes on the 805 (which were actually two lanes that were to be able to be moved based upon demand) we can purchase four lanes on the SR125 for half the cost.
Furthermore, if demand grows, it will likely be in the area by the 125, not the 805 which is pretty built out, and future growth can be planned for the 125 right-of-way which is wider thanthe 805 and has less likelyhood of requiring property condemnation.
Additionally, SANDAG could recieve up to $60,000,000 in tolls between now and when the franchise agreement terminates.
And did I mention the anti-competition clause that goes away (another 40 million dollars) if SANDAG owns the road? It’s in the franchise agreement as well.
There are hundred$ of million$ of pragmatic reasons for SANDAG to do this deal in the best interests of the taxpaying public, and really only dogmatic reasons to oppose it.
Jerome, here’s where we think the confusion lies: The “purchase four lanes on the SR125 for half the cost” part —
-The SR125 lanes currently exist, correct?
-If SANDAG doesn’t purchase them, don’t they still exist?
-If they had continued to be operated privately, then what was the need for the additional 805 lanes?
-Are you saying that unless SANDAG purchases the SR125 lanes, no private entity will operate them?
Thank you T.A. for being much clearer than I. Now one interesting nugget (which actually makes a lot of sense) is that Right of Way on 125 corridor could be considerably cheaper than 805 thus providing greater flexibility to the agency – though it would likely not need that MUCH before the toll road reverts to public ownership around 2038.
Dear T.A. and Erik,
In fact they do exist, and that’s part of the draw. SANDAG projects that the demand will require improvements to the 805 at a cost of about 700 million dollars.
If SANDAG owns and operates the 125, because of SANDAG’s lower cost of operation, SANDAG can improve the performance of that asset and in conjunction with the diamond lanes about to be built in the same corridor on the 805 will provide the same capacity at far less cost to the taxpayer.
Make sense?
Jerome,
Starting to. The key thing as I read your explanation seems to be the lower tolls SANDAG is forecasting that they will have to charge vs. what they believe a would-be operator would charge. Lower prices=more use=relief on 805 and greater performance on the entire corridor.
But then I go back to my original post
You have to have a way of adjusting tolls that reduces political pressure. I know you don’t have much of it in Encinitas but talk to your friends in San Diego about the politics of street meter parking for how difficult it is to alter subsidies over time. This is even more of an issue since you have entities like the Otay land owners that can bring pressure to bear. A dollar wager that within 5 years they will be down talking about that the road should be “free” since that would create even more use and take even more pressure off the 805.
Point well taken, wager not taken 🙂
A sincere Thank You to Councilman Stocks, Erik and
Thor’s Assistant for the educational thread on how
local state roads are maintained
This is Rostra at its best: a good 2-way debate that is
polite, vigorous and generates more light than heat.
Boring! Where’s the hate? 😉
Let another private operator buy the SR125. It will be free in 28 years.