would be built in three segments—rather than all at once—under a new plan that garnered initial approval Wednesday.
If all goes as Toll Roads staffers plan, the final engineering and construction could begin in as little as a year on a four-mile, $206-million stretch from Oso Parkway to G Street, slightly north of Ortega Highway in San Juan Capistrano.
Transportation Corridor Agencies Chief Tom Margro said that designing and building the 241 tollway extension in phases would allow the agencies to move forward on the long-stymied project.
“We will continue to develop an alignment to connect to I-5—we still have the long-range goal in mind and are working hard to accomplish it as well,” Margro told the TCA Board of Directors' Operations and Finance Committee Wednesday.
Will approval from the committee, the entire TCA Board of Directors will consider the new plan at its next meeting.
Project opponents worry that though this segment of tollway had not been contentious in the years-long debate to quash the 241’s proposed path through , it would create momentum to finish the rest of the road.
“It may create momentum that is hard to stop,” said Damon Nagami of the Natural Resources Defense Council, who attended the Wednesday meeting.
Director Peter Herzog of Lake Forest said he was all for the project, though he and some other directors urged staffers to see if they could find an engineering solution to extend the first phase farther south to connect to more well-traveled thoroughfares.
Director Sam Allevato of San Juan Capistrano said he was not averse to the segmented plan, but he abstained in the vote to approve it because he wanted to “obtain the consensus of my colleagues” on the San Juan Capistrano City Council.
He said, however, the TCA would have to do a good job selling its plan to segment the 241 extension to the public.
“The community may or may not be given information that is not in favor of this strategy,” he said. “So we need to get out ahead of this with a vibrant message.”
TCA Director Beth Krom of Irvine, the board’s lone dissenter against chopping up the project into segments, said she didn’t like building a chunk of road when the final alignment hadn’t been figured out yet. Furthermore, she questioned the accuracy of the projections of toll revenue—crucial to convincing investors to lend the TCA money for the project.
“To this day, we don’t have a single traffic projection that has proven accurate,” Krom said. “If you do this little segment, and you finance $200 million… and the traffic projections are not correct… I think the chances of ever getting funding for this agency again are small.”
Financing
Tony Hughes of Barclay’s Capital, which has handled several billion dollars worth of past TCA financing, proposed two possible ways for the agency to borrow money to get the initial segment built, both with drawbacks.
The first would be to issue bonds that would be paid off only after the TCA paid off its other lenders. Because of this, the interest rates on the new bonds would be higher, meaning the TCA would ultimately have to spend $268 million for a $206-million project.
The other scenario would allow the TCA to borrow cash to pay off existing bondholders, but the agency would then have to rely on revenue from existing toll roads to pay for construction of the new 241 segment. Toll revenue has been coming in under projections, TCA officials said at the meeting.
Timeline
If all goes according to TCA staff’s plan for the first 241 extension segment, consultants over the next year will hash out preliminary engineering, get environmental permits updated, set up the financing vehicles, assess endangered species habitat in the construction area and other preliminary work.
The Operations and Finance Committee approved spending $3.87 million this year to accomplish this, which will still need approval by the board as a whole.
David Lowe, TCA director of design and construction, said that staff could have all the necessary permits and clearances by October of next year for the board to approve construction, which would start late in 2012 and be done sometime in early 2014.
