LOS ANGELES - Local transportation officials reacted favorably yesterday to a federal judge's order that allows them to begin construction on both ends of the San Joaquin Hills toll road in California.
Although the judge on Tuesday temporarily blocked work on a middle segment, "the agency is very positive" that she allowed some construction to begin. said Walter D. Kreutzen, executive vice president of finance and administration for the San Joaquin Hills Transportation Corridor Agency.
An environmental coalition had asked U.S. District Court Judge Linda H. McLaughlin to halt construction on the 15-mile project while a legal challenge is pending.
The lawsuit filed by Laguna Greenbelt Inc. against the Federal Highway Administration, the San Joaquin agency, and others, questions the legality of various environmental approvals for the toll road.
McLaughlin's order grants a preliminary injunction blocking construction on a five-mile segment in the middle of the project. She is scheduled to hear motions for summary judgment in the case next February.
From the agency's standpoint, "the best [action] would have been no injunction," Kreutzen said. But the agency is pleased it can start construction at both ends, which require a lot of lead time because of planned links with existing freeways. "Those are the most severe critical-path items" from a scheduling standpoint. Kreutzen said.
The agency also can begin work to ease the project's impact on environmentally sensitive areas in those portions, he said.
It will probably take 30 days or so for the agency to determine the effect of the middle segment delay on the overall schedule. "Frankly, we don't know the answer right now," Kreutzen said.
He said. however. that the "financing plan took these potential delays into consideration" by incorporating contingency reserves and a two-year cushion of capitalized interest beyond the projected completion date in 1997.
The agency sold $ 1.1 billion of senior and junior lien toll road revenue bonds in March. The deal and the fact that the project was a start-up attracted market interest. Analysts and investors had to weigh the lack of a track record, plus construction and litigation risks. Some municipal analysts noted recently that the agency is entering a critical period for resolving project-related Iitigation, which can influence short-term trading decisions.
McLaughlin's comments indicate that she recognized potential hardships for the agency, bondholders, and workers if she did not allow any construction to proceed, said Mike Stockstill, the corridor agency's director of intergovernmental affairs.
"She mentioned ~balance' two or three times" in discussing the need to let work begin while also acknowledging the environmentalists' challenge, Stockstill said.
Spokesmen for environmental groups expressed partial satisfaction with the judge's decision because it delays work in specific areas of concern, including Laguna Canyon.
But transportation officials believe they will prevail, and said it was wishful thinking for opponents to hope the two segments will never be connected. "That's just not in the cards," Stockstill said. "We're committed to building this tollway from end to end."
The agency has generally emerged victorious throughout the laborious process of obtaining permits and overcoming litigation. Further challenges may well arise so the agency takes it "one step at a time," Stockstill said. But the agency's lawyers "felt very good" about the judge's comments and rationale on Tuesday, he said.
Andrea R. Bozzo, a senior vice president with Fitch Investors Service Inc., said, "I wouldn't see any reason to see it other than positive. That's a step in the right direction." Fitch rates the bonds BBB. Other agencies did not rate the issue.
