By David Tanner, Land Line associate editor
A California toll road that was once hailed as a flagship for public-private partnerships is on the verge of being sold back to the public just months after emerging from bankruptcy. The South Bay Expressway in San Diego County has been operated by Macquarie Infrastructure Group of Australia and has never been profitable.
The San Diego Association of Governments voted on Friday, July 29, to purchase the 35-year lease for the expressway, also known as State Route 125, for $345 million according to the agency’s website. The agency will accept public comments on the proposal during a public meeting scheduled for Aug. 26.
South Bay Expressway cost $635 million in public and private dollars to build. But according to the San Diego Union-Tribune, the bankruptcy court from which the private operator had just emerged values the roadway at $287 million.
Macquarie has not profited from this particular roadway. When it was opened in November 2007, the South Bay Expressway was projected to lure 60,000 vehicles per day from Interstate 5 and other roadways connecting the Otay Mesa Port of Entry to State Route 54.
But just two years after opening, the South Bay Expressway was only realizing 22,600 vehicles per day. The operator filed for Chapter 11 reorganization in March 2010 in an effort to restructure $510 million in debts. The company emerged from the proceedings in April of this year.
The operator has used toll increases to offset financial losses across its network of toll road concessions around the country, but has recently lowered the rates on the South Bay Expressway to attract more traffic.
The most recent toll adjustment occurred June 1 of this year. Truck tolls had been as high as $11.25 for a full-length trip but have more recently averaged $8.
The San Diego Association of Governments is making its bid for the roadway “contingent on completing due diligence and conducting a public process” according to an agency spokesman.
The public meeting is scheduled from 9 a.m. to noon at SANDAG offices, Suite 800, 401 B Street, San Diego, CA 92101.
Send public comments including the agenda item, your name and organization to firstname.lastname@example.org at least a week in advance to be considered by the board of directors.
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Toll road builder files for Chapter 11