Project: South Bay Expressway

1.0 Synopsis

The South Bay Expressway (SBX) project is a 9.2-mile extension of SR 125 in Southern California that spans from SR 54 at its northern terminus to just north of the Mexican border at is southern terminus. Construction of the $730 million (in 2013 dollars) project began in May 2003 and the road opened to traffic in November 2007, approximately one year behind schedule. The South Bay Expressway was pursued as a public-private partnership (P3), made possible by California’s AB 680, P3-enabling legislation passed in 1989. It was the first public-private partnership in the state of California, and the first toll road in San Diego County.

By connecting the only commercial port of entry in San Diego to the regional freeway network, the South Bay Expressway project completed the missing link in the regional freeway network that had been part of planning documents since the 1950s. The project also was built to accommodate future population and commercial growth in the area, and to reduce congestion in both the suburbs of San Diego, such as the City of Chula Vista, and along other north-south corridors, such as I-805. Development along the South Bay Expressway corridor has primarily been residential; however, this project created an estimated 332 jobs in the restaurant, self storage and package delivery sectors.

2.0 Background

2.1 Location & Transportation Connections

The South Bay Expressway (SBX) project is located entirely in San Diego County. It is one of the three north-south corridors that runs through the county: SR 125, of which this project was the final segment, I-5, and I-805. The SBX project connects Otay Mesa—the county’s largest industrial zoned area—with downtown San Diego, the City of Chula Vista, and the border with Mexico. The SBX project intersects with major east-west corridors, including SR 905 and SR-54; north of the SBX project, SR 125 intersects with SR 94, I-8, and SR 54.

San Diego International Airport, the primary commercial airport serving the San Diego region, is 16 miles from the SBX. Additionally, Brown Field Municipal, which accommodates general aviation aircraft and military operations, is within two miles of the SBX. Several bus lines that are part of the San Diego Metropolitan Transit System (MTS) intersect or run parallel to the SBX. The MTS includes approximately 100 bus lines, as well as four light rail lines, and freight operated by the San Diego & Imperial Valley (SD&IV) Railroad and the Pacific Imperial Railroad, Inc. (PIR). 

2.2 Community Character & Project Context

Between 2002 and 2012, the total local population for the Cities of San Diego and Chula Vista combined increased from 1,396,596 to 1,590,778 (+14%). Over the same period, the populations of both San Diego County and the state of California increased by 10%. The total local employment increased from 618,032 to 646,654 (+5%) from 2002 to 2012. The total employment in San Diego County increased by 7%, and the total state employment also increased by 7%. Per capita income at the local level increased from $22,929 to $30,589 (+33%), while per capita income in San Diego County increased by 36%, and state per capita income increased by 43%.

The City of Chula Vista is primarily a bedroom community for San Diego, the major employment center in the area. According to representatives of the City of Chula Vista, approximately 70% of the residents of Chula Vista work outside of the city.  Of this percentage, approximately 30% commute to an industrial zone in between the city’s southern limit and the Mexican border, and the balance commute to San Diego. The key industries in San Diego include manufacturing (particularly manufacturing tied to the city’s port, such as shipbuilding and repair), the military and homeland defense, and tourism. The San Diego area has the world’s largest concentration of military personnel and several military installations. Staples of the tourism industry include the San Diego Zoo and Sea World. Additionally, the border between San Diego and Tijuana is the world’s busiest border crossing.

3.0 Project Description & Motives

The SR 125 corridor first appeared in planning documents in the late 1950s. The portion of SR 125 that comprises the SBX was the last portion of this corridor to be completed. Due to lack of funding options, the SBX was pursued as a public-private partnership (P3), made possible by California’s AB 680, P3-enabling legislation passed in 1989. The SBX project was the first P3 pursued under this legislation, and was also the first toll road developed in San Diego County. The project was fully financed by the private partner, South Bay Expressway, L.P., comprised of Macquarie 125 Holdings Inc. and Macquarie Infrastructure Partners LLC, and included a 35-year concession period, after which time the facility would be transferred to Caltrans. Construction of the $730 million (in 2013 dollars), 9.2-mile extension of SR 125 from SR 54 to just north of the Mexican border began in May 2003 and was opened to traffic in November 2007, approximately one year behind schedule.

The “Gap and Connector” project, a 3.2-mile project developed with public funds that connects the SBX to the balance of the corridor and freeway system, was developed during this same period. Less than three years after the SBX opened to traffic in March 2010, the private partner South Bay Expressway, L.P., filed for bankruptcy, primarily due to outstanding legal claims and associated litigation costs, but also due to lower-than-expected toll revenues. Following the bankruptcy proceedings, the South Bay Expressway was purchased by San Diego Association of Governments (SANDAG) in July 2011 for $344.5 million ($2011) in cash and debt. SANDAG began operating the toll road in 2012 and reduced tolls by up to 40%.

The primary motivation for the South Bay Expressway project was to complete the planned, missing link in the regional freeway network that had been part of planning documents since the 1950s. It connects the only commercial port of entry in San Diego to the regional freeway network. The project was also intended to accommodate future population and commercial growth in the area, and to reduce congestion in both the suburbs of San Diego, such as the City of Chula Vista, and along other north-south corridors, such as I-805. 

4.0 Project Impacts

4.1 Transportation Impacts

4.2 Demographic, Economic & Land Use Impacts

The area immediately surrounding the SBX, including the City of Chula Vista, is primarily a bedroom community for San Diego, the area’s major employment center. In recent years, the City of Chula Vista has seen high levels of residential growth, made possible by the construction of the South Bay Expressway. The city adopted a growth management ordinance in 1987 that allowed the city to impose a building moratorium in the early 2000s when area roadways were reaching capacity. Without the congestion relief that the SBX provided on I-805, the City of Chula Vista would not have allowed additional residential development. Residential developments constructed after the opening of the SBX that are directly attributable to the project include San Miguel Ranch, Rolling Hills Ranch, East Lake Woods, East Lake Trails, East Lake Vistas, Otay Ranch, and Sunbow. Together these developments total 5897 single family developments and 4,622 multi-family developments as of October 2017.

The impact of the SBX on commercial development has been more mixed. Some area officials argue that the expressway has been more of an impediment than an asset to area businesses, as it is the only toll road in the county. Representatives of Chula Vista specifically cite the Otay Ranch Town Center, located at the intersection of the SBX and Birch Road, as one major area destination that views the toll road unfavorably.

Some area development, however, can be directly attributed to the SBX. Unused land that was intended for the roadway was returned to the City of Chula Vista by Caltrans, and has been used for 15 acres of self-storage units. This development is directly attributable to the SBX and is responsible for creating 209 new jobs. Additionally, UPS located an approximately 160,000 square-foot distribution center adjacent to the SBX to leverage the connectivity that SR 125 provides, according to interviewees; 96 jobs associated with this development are directly attributable to the SBX project. Several fast-food restaurants have opened at various intersections with the SBX and have created 27 new jobs, which are directly attributable to the roadway.  The total number of new jobs attributable to the SBX is 332.

5.0 Non-Transportation Factors

The opening of the South Bay Expressway coincided with the Great Recession in 2008; the area surrounding the corridor, including Chula Vista and Otay Mesa, were some of the hardest hit areas in the region. The economic downturn had a significant negative effect on area communities and resulted in unemployment levels as high as 18%. However, some actions taken by area cities, including the City of Chula Vista, helped to complete the SBX project as anticipated. As the SBX project was a public-private partnership, cooperation with local governments was needed to help with acquiring needed right-of-way and designing of interchanges. Additionally, the City of Chula Vista provided incentives for commercial and industrial land uses to attract businesses to the area prior to, and in conjunction with, the development of this project including through modifications to their transportation development impact fee (TDIF), which assesses fees to new development to help pay for transportation improvements.

6.0 Resources

6.1 Citations

1. US DOT. (2017). Project Profile: South Bay Expressway (Formerly SR 125 South Toll Road) [Online]. Available: https://www.fhwa.dot.gov/ipd/project_profiles/ca_southbay.aspx
2. Metropolitan Transit System. (2016). About MTS [Online]. Available: https://www.sdmts.com/about-mts
3. Advameg, Inc. (2017). San Diego: Economy [Online]. Available: http://www.city-data.com/us--cities/The-West/San-Diego-Economy.html
4.  “South Bay Expressway,” Project Finance Advisory LTD, San Francisco, CA
5. SANDAG. (2012, Nov. 9). Transportation Committee Agenda: State Route 125 Quarterly Status Report [Online]. Available: http://www.sandag.org/uploads/meetingid/meetingid_3234_15197.pdf

6.2 Interviews

Organization, Name, Title

SANDAG, Ray Traynor, Director of Operations

SANDAG (previously Caltrans), Charles “Muggs” Stoll, Director of Land Use and Transportation Planning

Otay Mesa Chamber of Commerce, Alejandra Miery Teran, Director

City of Chula Vista, Eric Crockett, Director of Economic Development

City of Chula Vista Public Works Department, Frank Rivera, Principal Civil Engineer

Footnotes

Case Study Developed by University of Maryland