Disney Garage Funding Plan Faces Challenge : Transportation: Federal officials question the facility’s value. Money for major freeway work is now under scrutiny.

ANAHEIM — The planned construction of a giant parking garage across from Disneyland has threatened federal funding for a major transit project linking the San Diego and Costa Mesa freeways.

Federal officials are challenging the Orange County Transportation Authority’s decision in 1993 to include the seven-story parking structure in the $424-million transit project, which would connect the two freeways with car-pool lanes and new ramps.

In a series of letters obtained by The Times, the Federal Transit Administration has questioned the value of the Disneyland garage to transit commuters. The administration further expressed concern that building the garage has caused local transit officials to scale back plans to expand bus and other services included in the original transitway project.

“By deferring park-and-ride lots and bus expansion, much of the transit benefits of the original proposal would be postponed indefinitely,” the federal agency said in a January letter to local transportation officials. “If OCTA remains committed to including (the garage) in the proposed federal project, please provide FTA with an analysis of the transit benefits.”

The dispute started in December, 1993, when, nine months after federal officials had approved in concept the transitway project, the local authority unexpectedly added the Disney garage to the project at an additional cost of $223 million.

Before adding the parking facility to the project, the authority had hoped to receive $318 million in federal funds to pay for the highway improvements, which, besides the car-pool lanes and ramps, also consists of park-and-ride facilities and the purchase of 361 express buses.

Besides federal money, funding from Measure M and the state would go toward the project.

Local transit officials wanted to use $131 million of the $318 million in federal funds toward the Disney garage. However, surprised federal officials said they expected the $131 million to be used for constructing park-and-ride facilities and the purchase of buses--not a garage.

The local agency, considering the garage as a transit facility complete with express bus service and park-and-ride spaces, thought it belonged as part of the “San Diego/Costa Mesa Freeway Transitway” project.

However, earlier this year the federal officials balked at the garage having been added to the project, and suddenly questioned the project’s overall value.

The federal agency noted that of the 12,000 spaces in the garage, only 1,000 would be available for commuters, and in a letter last month to the country transportation authority objected that the garage appears to be intended “primarily for Disneyland.”

U.S. officials also charged that adding the garage had forced local transportation officials earlier this year to downsize or delay plans for the highway improvements.

On Tuesday, transit administration spokesman Brian Cudahy in Washington said the revised transitway project, which includes the garage, “will have to be reviewed.”

Cudahy said that federal officials are reviewing whether the local transportation agency’s request for $318 million in federal funds is too high and should be reduced, considering that the agency wants to use part of the money for the garage.

“It was a project that already had a shape and dimension to it, and all of a sudden the dimension changed,” Cudahy said. “This is something that we have to deal with.”

In a series of letters beginning in January, federal transit authorities questioned the local transportation agency’s plans to make the parking structure part of the transitway project.

“Based on the information you (OCTA) have provided, the newly proposed project is not as attractive a transit project as the previous project,” FTA Regional Administrator Stewart F. Taylor said in a Jan. 24, 1994, letter to the local transportation agency.

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Last month, Gordon J. Linton, administrator of the federal transit agency, was more blunt in a letter to the local transportation authority. “The key factor is that FTA can only support a viable transit project,” Linton said.

In an April 12, 1994, letter to the local authority, Taylor said federal officials would need more information about the “redefined project” before agreeing to approve federal funds for the transitway.

“FTA needs additional project justification and financial information on the redefined project in order to rate the proposal for (federal funding),” Taylor said.

Lisa Mills, chief deputy at OCTA, denied Tuesday that the transitway project has been fundamentally changed because the garage was added to the project. The structure is planned for Clementine Street, between Freedman Way and Katella Avenue.

But she did acknowledge that funding problems caused by the poor economy have forced the authority to eliminate permanently one of three ramps from the transitway and defer the purchase of 151 express buses for the lanes after deciding to build the garage.

In addition, the county transit agency has postponed by eight years to 2008 the construction of 7,759 park-and-ride spaces to be used by transitway users.

“The reason is that circumstances have changed since the plans (for the transitway) were developed in 1989,” Mills said. “The revenues we projected to receive from sales tax went down. We were expecting significant growth in ridership, but we hit the recession and that went down as well.”

Mills said the agency still plans to follow the original plan for the transitway but on a “different implementation schedule.”

“We will continue to meet our (construction plans), albeit on a different timeline because of the factors I mentioned,” Mills added.

She said that OCTA officials have explained the situation to federal officials in two meetings earlier this year.

“We still expect to get the $318 million we asked for. The FTA doesn’t make funding decisions. That’s done by Congress. True, the FTA does make funding recommendations and administers the funds, but we still expect to receive the money we asked for,” Mills said.

She said that the local transportation agency’s decision to include the Disney garage in the transitway project has generated confusion in Washington. Local officials estimated the cost of the garage at $223 million--more than half the cost of the original transitway project--and said they expected to receive $131 million in federal funds for the garage alone.

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“It’s included with the transitway in terms of a funding request to Congress, but we’ve separated the two projects,” said Mills.

According to Mills, local officials expected to use $131 million of the $318 million they hoped to get in federal funds for the Disney garage. However, federal officials said they expect the $131 million to be used for constructing park-and-ride facilities and the purchase of buses.

“Our position is that we expect to make up the $131 million in long-term revenue from the parking garage, which we will then use to build the park-and-ride facilities and buy new buses,” Mills said.

However, federal officials remain opposed to the garage, and questioned the local transportation agency’s ability to finance the construction of the transitway and garage at the same time.