Foothill-Eastern Toll Road Driving Toward Largest Bankruptcy Since Detroit's: Report

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The Foothill-Eastern Toll Road, a.k.a. Route 241, is reportedly nearing the biggest default in the $3.7 trillion municipal market since Detroit's record bankruptcy.

Revenues and ridership chronically fail to meet projections--most certainly the ones politicians who said Orange County should be run like a business used to shove Lexus lanes down our throats years ago. Of course, like Wall Street looters, those same folks maintain their positions of power.

And like the Bruce Dickinson and the cowbell, these same Orange County political lifers and Transportation Corridor Agencies (TCA) staffers in Irvine say the prescription to cure this financial affliction is more toll road.

Comparing the financial state of the Foothill-Eastern Toll Road and the Motor City madness comes not from the dirty hippies and unwashed surfers who have banded together to save Trestles but that anti-capitalism tool known as Bloomberg Businessweek.

The report cites a consultant to California Treasurer Bill Lockyer's Debt and Investment Advisory Commission saying earlier this summer that the TCA risks default on $2.4 billion in debt. To put that in perspective, the 1994 Orange County bankruptcy, the largest U.S. municipal bankruptcy at the time, totaled $1.7 billion.

"The projections that were originally put into place when they issued debt didn't come to fruition," Howard Cure, director of muni research for Evercore Wealth Management LLC in New York, tells Bloomberg reporter Stephen Merelman.

That echo year hear? It's what the Weekly has been reporting for years--to choruses of denials from toll-road boosters.

"Built into this kind of project is the expectation that they can improve the amount of traffic and the collection of tolls," Cure reportedly continued. "When you fall behind early on, it just makes the problem that much worse."

And it has driven down the value of the bonds that were issued to build the blasted thing and driven up requests by the TCA to refinance its debt and ask for extensions on repayment obligations, Merelman observes.

Lisa Telles, the delightful TCA spokeswoman, reportedly tells the Bloomberger that the collapse of Southern California's housing market is to blame for revenue and ridership projections failing to be met, not the overly great expectations.

As I try to wrap my head around new toll road lanes historically creating new homes and traffic rather than taking care of the existing bottlenecks, Telles is claimed to go on that when the housing bubble burst inland homes lost value, Orange Countians lost jobs and the toll roads remained lightly traveled.

"If people are nervous about losing their jobs, they are more careful about their expenses and are willing to sit in traffic rather than pay a toll," she reportedly said by telephone.

Marilyn Brewer, the former Republican state assemblywoman out of Newport Beach who asked Lockyer to review the TCA finances, also talked housing in her reported insights to Merelman.

"The TCAs are like a homebuyer whose house is underwater and they want to extend the loan in order to save it," she reportedly said. "It's the result of bad decisions they've made in the past. This is like the third time they've gone to the well. In three to five years, they're going to be asking for another extension."

Clang that cowbell, boys.

Email: mcoker@ocweekly.com. Twitter: @MatthewTCoker. Follow OC Weekly on Twitter @ocweekly or on Facebook!


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19 comments
serbialaw1
serbialaw1

Not only did the geniuses of the TCA screw up their ridership projections, but when they first grappled with the problem, they decided to...wait for it...raise the price of the tolls.  As such, I wonder how these buffoons ever got put in charge inasmuch as they couldn't even pass Econ 101. 

909Jeff
909Jeff

I'm not sure how this happens in a state like CA afterall we keep electing highly intelectual democrats who have been promising to cure our ills for years... And we keep on voting for them... Again and again... Maybe one day... just Maybe!   

JBinOC
JBinOC topcommenter

Love the quote from Marilyn Brewer, who spoke the plain truth.  


There's an old theory, btw, that the reason affluent people are affluent is, because, they are as thrifty as fuck.   Let's picture two hypothetical families who live up there: the Penningtons of Foothill Ranch, and the Changs of Portola Springs.  Do they strike you as toll road users?  Or as the types who will throw a shoulder at you while picking through the designer jeans table during Nordstrom's semi-annual sale? 

Question: if there is a loan default, any chance they'll just say the hell with it and open all the toll roads to everyone?  If so, you may witness a scene not visible since Main Street in Huntington Beach after the end of the U.S. Open of Surfing. 


Marc Morin-Lebel
Marc Morin-Lebel

The 241 toll road--along with the other tolls--seems to be a two-edged sword. On one hand, the expense of taking the road, can take a bite out of one's pocketbook. On the other hand, because of the expense involved, there aren't as many drivers as compared to the freeways, thus making for an easy, relaxing commute, with reduced drive time.

mbjones
mbjones

Bruce Dickinson and cowbell?  Coker, Coker, Coker.  <shakes head>  The more cowbell skit was with Blue Oyster Cult (Don't Fear the Reaper) and Bruce Dickinson is in Iron Maiden.  How the hell can you get those two mixed up?

1JAG
1JAG

None of this surprises ANYONE who has had contact with this group. The scale in which their management wastes money SHOULD be criminal (including ridiculous salaries/ perks)! From the beginning these people have been living high on the hog and who is there to keep them in check? They've had an unlimited trough to draw from for so many years. Their ego's won't allow them to see or think like us mere mortals. Lets hope they are declined more bail out money/time and maybe get some responsible leadership but, I wont hold my breath.

gregdiamond
gregdiamond

Props to the Weekly for their reporting on this issue.  More on the 405 Lexus Lanes, please!

EA Prieto
EA Prieto

Lets see, pay to take the 241 so it can lead you from one clogged part of the county to another clogged part of the county. Stupid is as stupid does.

Aimee Monahan
Aimee Monahan

Because NOBODY uses it! it's the road to nowhere.

Andrew Cusumano
Andrew Cusumano

if they did something like that, it would almost definitely provide the knowledge pertinent to rectifying their failing business model. your hypothetical problems are just varying degrees of the same problem; when the cost is higher than people are willing to pay, the demand for a toll road falls, and there is NEVER going to not be traffic on the 91, so it's just a matter of figuring out how much people are willing to pay (within limits, of course). a couple free uses would give people the knowledge of how pleasurable skipping out on the god forsaken 91 is and, through that knowledge, they can survey the users in an attempt measure that pleasure in the form of a newly proposed toll road fees,

18usc241
18usc241 topcommenter

From 1997 to 2002 I lived about 2 minutes away from the 241 and Antonio Parkway in RSM. I would need to get to Stanton everyday where I was making good money as an engineer(to OC law enforcements dismay) . If I had used the 241, I would've saved a good bit of time everyday. But it would have cost about 8 bucks every day. I just couldn't see spending that money everyday. I always thought that there should have been more experimentation with pricing in favor of the customers. There was definitely a price point that would have provided the correct incentive. But it never happened. I could have afforded to spend the money but it just seemed incorrect to do so.

Brennan King
Brennan King

They should offer a month of free use of the road without tolls. That would determine whether the problem is lack of traffic demand or cost.

Brainwashed_in_church
Brainwashed_in_church topcommenter

Very disappointed with the Toll Roads interface with the public. 

Did you know there is NO WAY to calculate what the toll you would pay to drive any stretch on the toll road? That's right. There used to be a toll calculator on their website but it is gone. There is a rate card but it doesn't provide the formula for calculating tolls. It just provides a table of fees associated with toll interchanges. It's not as simple as get on at Alton pay $X, get off at Oso, pay $Y.

You call their customer service and even the $9/hr bimbos answering the phone don't know how to calculate the tolls. they'll put you on  to talk to a $12/hr supervisor and come back five minutes later.

Like I wrote,  very disappointed with the Toll Roads interface with the public.


canycany
canycany

@909Jeff 

Oh stop with the dem slapping. 

The OC Board of Supervisors who approved the toll projects in OC, against the wishes of the public I might add, were ALL republicans.

Do your frigging homework.


canycany
canycany

@909Jeff 

Oh please! Every single person that originally voted to allow these debacles sat on the OC Board of Supervisors and were/are Republicans.

Do your frigging homework.


chilehead
chilehead

@mbjones Christopher Walken's character in that skit was "THE Bruce Dickinson".  They kind of made a big deal about it in the skit for the first several minutes.  Look it up, it's still on youtube.

ianchin
ianchin

@18usc241 you're bang on and this goes for all of the toll roads, where tolls simply don't properly match driving distances and are often punitive. 90 cents for .25 miles on the 261 from Jamboree to Irvine Blvd? No wonder it bottlenecks at Jamboree every afternoon. 

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