Finance & Commerce: Gateway BRT left out of special session bonding bill

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.

Leaders of East Metro Strong — a transportation advocacy group focused on Ramsey, Washington and Dakota counties – called out lawmakers in a letter this week for a “missed opportunity.”

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.


An urgent need in the East Metro: better transit


The education nonprofit company ECMC announced last week that it is moving 500 jobs from Oakdale to downtown Minneapolis to “attract and retain workers.”

In an interview with the Minneapolis-St. Paul Business Journal, the company’s CEO said, “Obviously Minneapolis is a far larger labor market.”

Let’s think about what that means.

Does downtown Minneapolis have a “larger labor market” because Hennepin County has more people? No. Combined, the East Metro counties of Dakota, Ramsey and Washington have the same number of residents as Hennepin County: 1.1 million. Both regions are served by ample highway networks.

There’s one major difference: Downtown Minneapolis has a larger labor market because it’s better served by transit.

Leaders here in the Twin Cities and around the country have been stressing the need for transit to connect people to employers. The co-chairs of the Itasca Project Transportation Task Force said in 2012, “Employers in Minneapolis, St. Paul and our suburbs are telling us with increased urgency that transit is a necessary component for their future growth.”

Last week, the Washington Post reported that Marriott International plans to move its transit-inaccessible international headquarters, with 2,000 jobs, to a new location on transit. Other suburban employers are also blunt about their needs. “You’ve got to think mass transit,” said the CEO of Choice Hotels. “I can’t compete unless they can get to us without driving.”

The East Metro has responded to this need by studying options for new transitways in the Gateway, Rush Line, Red Rock, Riverview and Robert Street corridors. The furthest along is Gateway; its communities have all endorsed the Gold Line, which would bring high-quality all-day transit to employers along I-94 between St. Paul and Woodbury.

To continue to respond to the urgent need for quality transit, what else should we do? The Legislature is hearing bills to fund next steps for East Metro transit, including planning the Gold Line and Red Rock specifically. The Legislature should pass those bipartisan bills authored by Rep. Kelly Fenton, Sen. Karin Housley, Rep. JoAnn Ward and Sen. Susan Kent.

And the Legislature should make sure that when design of East Metro lines is done, a funding source is in place to build them.

It’s important to understand that East Metro transitways like the Gold Line are not only about connecting people to jobs in St. Paul. East Metro transitways are also about serving people and employers throughout the East Metro.

As Ramsey County Commissioner Jim McDonough puts it, “the health of St. Paul depends on the health of surrounding communities.” A large employer shouldn’t have to move to downtown Minneapolis or downtown St. Paul for quality transit. If they do, we will have a weaker East Metro and a weaker region, even if we don’t lose a single job in the process.

The good news is that the corridors in which East Metro transitways would run have jobs and residents now, and room for many more. The East Metro transitway study areas contain 600,000 residents and 11,000 employers. That’s 54 percent of the residents and 62 percent of the jobs in just 17 percent of the East Metro’s land area. That’s a large labor market, ready to be connected with transit.

If we connect those people and jobs with transit, we will prosper. And if we do not, people and employers will move away — to places with more and better transportation options. And those places may not always be here in Minnesota.

Matt Kramer is president and CEO of the St. Paul Area Chamber of Commerce. Lisa Weik is a Washington County Commissioner and chair of the Gateway Corridor Commission. Together they co-chair East Metro Strong, a public-private partnership of businesses, cities and counties working together to bring balanced transit investment to the East Metro and catalyze job growth and economic development opportunities.


Will Schroeer, Executive Director