In Wake Of Ballooning Costs, Even Southwest LRT Backers Ask, “Is It Worth It?”

In Wake Of Ballooning Costs, Even Southwest LRT Backers Ask, “Is It Worth It?”

A new $2 billion price tag has led Gov. Mark Dayton and Met Council Chair Adam Duininck to call for a rethinking of the project — or even abandoning it.

Protests, lawsuits and changes in federal funding formulas couldn’t do what updated engineering studies might — kill the proposed expansion of the Green Line known as Southwest Light Rail Transit.
 
That updated engineering, made public Monday, has identified so many new must-dos that the project’s costs have jumped from $1.65 billion to $2 billion, making it perhaps both unaffordable and politically unpalatable. In addition to the cost hike of 20 percent, project managers also put back the completion date from 2019 to 2020.
 
The changes have led Gov. Mark Dayton and his Metropolitan Council Chair Adam Duininck to call for a rethinking of the project, with all options being considered — including abandoning it.
 

“When I say that all options are on the table I mean that,” Duininck said. “We have to take a pause and figure out how to proceed because this project is on uncertain ground right now, The question we have to ask ourselves is, at $2 billion is there a cost benefit there, is it worth pursuing at that price?”
 
If it is not worth pursuing, Duininck said, then the region will have to decide, “then what?” As a supporter of regional transit and the project, Duininck admitted that the news was discouraging. “It feels like a setback,” he said.
 
“It gets your attention, but it also can be an opportunity to talk about whether the corridor is the right corridor and whether that service is the right service for the area and whether the region has a commitment to transit in general.”
 
Dayton reacted to the engineering revisions with some anger, describing himself as “shocked and appalled.”
 
“The continuing escalation of the costs to design and build this line raise serious questions about its viability and affordability,” Dayton said in a statement released Monday morning, shortly after the Met Council announced the news. The governor said he wanted the council to look at all other means of providing increased transit service to the southwest section of the Metro and compare those modes with SWLRT.
 
And he had harsh words for the Met Council staff running the project. “The Board must also make a thorough evaluation of the capabilities and competencies of the Metropolitan Council staff to manage a project of this magnitude. I certainly will not recommend that any additional public money be committed to the project until I am satisfied that its cost can be justified and properly managed.”
 
Series of problems led to cost hikes
It turns out, though, that it was not one problem that increased the costs but a series of them: some environmental, some engineering and some relating to safety. The deeper analysis identified more wetlands and floodplains that must be protected, additional issues with soft soil conditions and contamination, additional retaining walls as well as the need for additional safety gates and bells at intersections of rail and existing roads. The project staff even decided on more extensive ventilation for the planned tunnel in the Kenilworth Corridor in reaction to the fatal January fire in a Washington, D.C. Metro tunnel.
 
The Met Council broke down some of the major cost increases:
 
Construction costs:

  • $32 million for additional retaining walls, excavation, pile and shoring;
  • $23 million for added costs for Kenilworth Tunnel foundation and ventilation;
  • $21 million  for increased costs of the operations and maintenance facility building;
  • $13 million for added safety at crossings. 

Non-construction costs:

  • $45 million-$50 million for costs of the one-year delay;
  • $33 million for additional land purchases;
  • $85 million for increased contingency reserve
  • $19 million for additional train sets the review shows are needed to maintain the service levels promised.

One change that raised eyebrows was the report that 99 additional businesses would have to be relocated as part of the project. How could planners not see that many businesses? Yet SWLRT project director Mark Fuhrman said that just two locations — a technology incubator with two dozen businesses inside and a mini-storage facility — make up the bulk of those businesses. Both are in Hopkins.
 
The news came as the project was on something of a winning streak. It had received consent from Hennepin County and all the cities along the 16-mile route between Target Field Station in Minneapolis and Eden Prairie. It was included in President Obama’s transportation budget, and the Federal Transit Administration had increased the rating for the project. It had also resolved objections and a threatened legal challenge by the Minneapolis Park & Recreation Board.
 
Hikes 'not on par' with those of other projects
But the new revelations come at a critical juncture. The final chunk of state funding — a chunk that just climbed from $120 million to $145 million — is tied up in the transportation budget battles in the Legislature. Dayton included the final funding but House Republicans have not. The Met Council is awaiting a ruling from U.S. District Judge John Tunheim on a challenge from the Parks and Lakes Alliance, a neighborhood organization opposed to the route segment between Cedar Lake and Lake of the Isles. And a supplemental draft environmental impact statement that will be released in late May could identify more problems that could take additional money to resolve.
 
The change in the price tag also provides ammunition for those who think transit costs are already too high as a percentage of regional transportation funding. During debate Monday on the Senate’s transportation budget, Republican Sen. Julianne Ortman made reference to the budget increase before saying: “You can’t raise enough sales taxes to pay our portion of those costs nor would you ever want to. It will never provide value.”
 
A statement released by Mary Pattock, spokeswoman for the Lakes and Parks Alliance, said the increases validate the group’s lawsuit. “We knew from the get-go there were environmental problems, and sued because the council failed to share the environmental impact statement with city leaders before forcing them to give municipal consent — as required by law. For many months the public has been tying itself in knots over this project  — which is, at $2 billion, the costliest public works project in state history — and has not been well served by the secrecy surrounding it.”
 
This project has already seen significant price increases, growing from $1.25 billion when this alignment was first chosen as the preferred alternative, to $1.55 billion and then $1.65 billion. Met Council staff estimates that $59 million has been spent so far on the project. How similar service would be provided to the same southwest part of the region with other modes of transit is complicated by the fact that much of this corridor uses existing rail right of way. In contrast, both existing light rail routes are primarily along existing roads where bus rapid transit could have been an alternative.
 

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If the region decides to move ahead with SWLRT and a review does not find significant cost savings, the increases would have to be absorbed by the four project funders. The federal government is set to cover 50 percent of costs; the Counties Transportation Improvement Board will pay 30 percent; and the state of Minnesota and Hennepin County Regional Rail Authority will pitch in 10 percent each.
If the project goes ahead but with substantial changes to what was approved by local governments, a new round of municipal consent would be required.
 
Fuhrman — who also led the Green Line project between downtown Minneapolis and Union Depot in St. Paul, and the Northstar commuter rail line between Big Lake and Minneapolis — said more-detailed engineering work can identify increased costs. But he said the changes found for SWLRT are “alarming” and not on par with what happened with other projects he has worked on.
 
If there is any good news, Fuhrman said many of the new issues identified in the pending EIS have already been included in the updated project budget.
 
The SWLRT line would be the region’s longest and most complicated, in addition to being its most expensive. The Blue Line (then known as the Hiawatha), a 12-mile line between downtown Minneapolis and the Mall of America, opened in 2004 with 17 stations and a cost of $715 million. The Green Line, connecting the downtowns of Minneapolis and St. Paul, opened in 2014 with 18 stations over 9.8 miles at a cost $957 million. The proposed extension of the Blue Line to Brooklyn Park will cover 13 miles, have 10 or 11 stations and is projected to cost $1 billion. It is set to open in 2021, if approved and funded.