South Bay Expressway

Sale of the South Bay Expressway tollroad (CA125) to the San Diego Association of Governments (SANDAG) went to financial close at the multi-city/county agency offices December 21 and SANDAG officially became the owner and operator of the facility today (Dec 22). Purchase price was $341.5m and SANDAG bought from the financial institutions left with its residual value after a bankruptcy last year.

SANDAG (San Diego Association of Government) is finalizing a deal to buy the bankrupt South Bay Expressway (CA125) with a strategy of lowering tolls to attract more traffic away from the crowded 805 freeway that runs parallel.

The San Diego Association of Governments (SANDAG) is buying the South Bay Expressway from the post-bankruptcy South Bay Expressway LLC for $345m, about two-thirds what it cost to build.

The SANDAG board agreed in principle to the purchase Friday but will discuss financing of the purchase at their next meeting scheduled for August 26. There have to be public hearings and a final decision by about November.

The South Bay Expressway is set to come out of Chapter 11 bankruptcy after a settlement with creditors. CEO Greg Hulsizer says the tollroad concessionaire on the eastern side of San Diego is now on a sustainable financial footing. Under the terms of the settlement the pike's debt has been reduced from around $530m to $288m and outstanding claims by builders have been resolved.

South Bay Expressway (SBX) or CA125 in the San Diego area has now creditcard machines operating at all their toll points. The self-swipe card machines, unusual on American tollroads, were all working by last weekend. And SBX have recently announced toll changes, both increases and promotional 3-month decreases.

South Bay Expressway (SBE) company filed for a reorganization in Chapter 11 US bankruptcy this week, writing off around $200m in shareholder equity. The equity held by Macquarie Atlas Roads in Australia and previously Macquarie Infrastructure Group had been heavily written down since the pike opened in November 2007 and was valued at zero ($0.00) in the financial reports from June 2009 onward.

The South Bay Expressway (SBX), Macquarie's first foray into the US toll business continues to be a bear for the group. Data released to the Sydney Stock Exchange show traffic in the latest quarter (2009Q3) down 13.6% on the prior corresponding period of 2008 for average daily transactions of 22.5k, v 26.1k in the tollroad's first year.

South Bay Expressway (CA125) east of San Diego California is increasing FasTrak transponder tolls for cars by roughly 10% but increasing cash tolls by 20% or more. Tolls for cars to go the 16km (10 mile) length of the tollroad from State Route 54 (CA54) to Otay Mesa Rd go from $3.50 to $3.85 with a FasTrak transponder but from $3.75 to $4.50 for cash.  Those are tolls of about 39c/mile with a  transponder and 49c/mile by cash.

The South Bay Expressway (SBE) in the eastern part of the San Diego area opened Monday (Nov 19) after ceremonies the prior Friday. The tollroad 15km (9.3mi) long has had what is described in local reports as "light to moderate" traffic this week. Forecasts have been that average daily traffic will settle early in the range 30k to 40k.

George Washington, Ho Chi Minh, Charles de Gaulle and Churchill all knew it for war and politics. And for roads Kent Olsen and Michael Schneider of Parsons Brinkerhoff and then Greg Hulsizer with Macquarie at the South Bay Expressway.

Tenacity, sticking at it, staying there fighting, and surviving after your opponents have wearied is often the key to success.