by Cali Owings, Finance & Commerce
June 17, 2015
The proposed Gateway Corridor bus rapid transit project from downtown St. Paul to Woodbury now faces $17 million per year of inflationary costs if the line isn’t able to secure state funding for further engineering.
While Minnesota lawmakers tackled a lengthy to-do list during the one-day special session last weekend, they didn’t approve a $3 million bonding request to plan the 12-mileBRT project, also known as the Gold Line. Before the project can get approval from the Federal Transit Administration to enter the project development phase, it must have the funding on hand for the next two years of engineering and environmental study, expected to cost $25 million.
The lack of state funds could set the project back and cost an additional $17 million per year due to inflation, according to a letter from East Metro Strong co-chairs Washington County Commissioner Lisa Weik and St. Paul Area Chamber of Commerce President Matt Kramer.
In an interview, Weik said the recent cost overruns for the Southwest Light Rail Transit project may have “spooked” lawmakers from making a transit investment in 2015, though the projects are quite different. The current cost estimate for the Southwest project is nearly $2 billion or $341 million over budget.
The Gateway project is estimated to cost $485 million. Buses are planned to run in their own dedicated lane along Interstate 94, similar to the dedicated guideway for light rail tracks.
While lawmakers were curious about the bus project and how the mode would work, there wasn’t much opposition to the idea, Weik said.
The funding proposal for the project was put forward by a bipartisan cohort of east metro lawmakers. The timing of the cost increase for Southwest LRT was unfortunate for the Gateway project and its prospects for state funding, Weik said.
“My feeling is that Gateway was inadvertently in the shadow of the cost overruns of Southwest LRT,” she said.
State Sen. Susan Kent, DFL-Woodbury, chief author of the bonding proposal for Gateway, said she was frustrated because the project had support from Republicans in the area – including Rep. Kelly Fenton, R-Woodbury, who sponsored it in the House and co-author Sen. Karin Housley, R-St. Mary’s Point. The St. Paul Area Chamber of Commerce, the Woodbury chamber and Maplewood-based 3M Co. also expressed support for the project at the Capitol.
“If anyone calls it controversial, I want to know who they are talking to,” she said.
Rep. Paul Torkelson, R-Hanska, who chairs the House Capital Investment Committee, said the bonding bill was fairly small so even projects that had support didn’t make the cut. Torkleson said lawmakers went with projects that were going to move forward “fairly quickly” and tried to avoid funding projects that needed planning dollars. He said he didn’t see a direct relation between the Gateway project’s bonding request and the Southwest cost increases, since they are so different.
Lawmakers were careful about not including too many transportation projects in the bonding bill because it would take pressure off the need for a long-term transportation package, said Erin Campbell, a lobbyist with Messerli & Kramer who talked about the session Wednesday at a Counties Transit Improvement Board meeting. The project was also a casualty of general opposition to transit – including BRT, she said.
“I think that what you saw was some blanket opposition to transit, not just rail,” Campbell said. “It didn’t matter that it was BRT, it didn’t matter that it was in a partially-GOP district [or] that it was supported by the chamber.”
During the planning stages for a transit line, funding is typically split between the Counties Transit Improvement Board, the counties where the project is located and the state. Federal money doesn’t become available until a project has cleared years of planning hurdles. The state has already contributed $2 million of its $5 million share for the project development phase. The project has already secured the other $20 million in funding commitments from the counties and CTIB.
To fight off cost increases and a schedule delay, Gateway backers are exploring other sources of funding – including money from the Metropolitan Council – to fill out the funding commitment, Weik said.
She’s also looking into whether the FTA would accept a letter of intent from a state agency for the remaining $3 million. Gateway planners expect to seek FTA approval this fall to enter project development.
Kent said she was hopeful one of those funding sourceswill help bridge the gap until the state commitment can be secured. A long-term transportation and transit funding solution, which also wasn’t passed this year, could eliminate the need for many projects to seek bonding dollars, she said. The state is still an important partner, though it doesn’t have reliable funding mechanisms for transit.
“Part of the point here is to have some of these federal transit dollars come to Minnesota and the east metro,” she said. But first the FTA needs to see a local commitment, she said.
The bus rapid transit project has been in the works since 2009 and planners will finish a Draft Environmental Impact Statement later this year. After the environmental review is completed, the Gateway Corridor Commission plans to hand the project off to a state agency for the project development phase and final environmental assessment. The line is currently scheduled to open for service in 2022.