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Douglas T. Holod

Sticker shock: LRT line in doubt

The future of the Southwest Light Rail Transit line from Minneapolis to Eden Prairie is uncertain now that the project cost has ballooned to nearly $2 billion.

The Metropolitan Council announced earlier this week that results of further tests and engineering now peg the project’s cost at $1.994 billion — a $341 million increase from the previously reported cost. The 16-mile Southwest line was already the region’s most expensive transit project to date, but costs have risen due to poor soil conditions and project delays. The Green Line, between Minneapolis and St. Paul along University Avenue, was completed last June for nearly $1 billion.

In response to the rising costs, Gov. Mark Dayton prompted the Met Council to explore other options for providing transit to the southwest metro.

An additional $292 million in local funding would be needed to move the project forward at the current estimate. That number includes $121 million that the Met Council was seeking from the state to cover 10 percent of the project under the previous estimate. The other local funding partners had already approved funding for the project.

The new cost estimate is a result of more detailed engineering and environmental tests, as well as a delayed environmental review which pushes the anticipated project completion date from 2019 to 2020. Most of the cost increase — $207 million — is driven by construction elements of the project including the need to build 80 percent more retaining walls, contaminated soil remediation near the operations and maintenance facility in Hopkins and systems for the Kenilworth tunnel area.

The remaining $134 million in increased costs includes a greater number of property acquisitions and business relocations, the purchase of three additional light rail vehicles to meet service projections and the delayed opening.

The overall cost estimate includes about a 27 percent contingency for unexpected costs and change orders.

In a statement Monday, Met Council Chair Adam Duininck said the cost increase presents a “significant problem” for the project partners and taxpayers and that “all options are on the table.”

“As we weigh our options, I have directed our engineers and contractors to pursue every possible efficiency to achieve cost savings,” Duininck said.

Many of the project backers received the new estimate over the weekend, including Dayton.

In a statement Monday, the governor said he was “shocked and appalled” to learn of the cost increases.

“The continuing escalation of the costs to design and build this line raise serious questions about its viability and affordability,” he said.

He said the Met Council should quickly review other options for providing transit to the southwest suburbs and compare it to the Southwest LRT project. The governor also said he wouldn’t support additional public funding for the project until “its cost can be justified and properly managed.” He called into question the Met Council staff’s ability manage the project.

Hennepin County Commissioner Peter McLaughlin, who chairs the Counties Transit Improvement Board, said Monday that the cost increase is a huge problem to work through, but he remains a believer in the project. He hopes to be able to push the costs down. The board is expected to pay 30 percent of the project’s capital cost with sales tax revenues. Its members have been critical of the project’s cost in the past and suggested cutting certain elements — like the final station at Mitchell Road in Eden Prairie.

“Just as we did on Hiawatha and Central, we took a sharp pencil to those projects to make sure that the costs stayed within reasonable bounds,” he said. “We’ll take a sharp pencil to this too.”

When you visualize the route, as the Met Council has in a video on its website, it’s easy to see how the project is more expensive than the region’s two previous lines, McLaughlin said. Though the Southwest line doesn’t include downtown areas, which are expensive because of utility relocations, there are many grade-separated crossings, wetlands and other design challenges on the route.

With any transit project, McLaughlin said there are “half a dozen places where you could bail out,” but he emphasized creative problem-solving to resuscitate Southwest.

“It would be a shame to lose this element in the system,” he said.

McLaughlin said he didn’t have suggestions yet for where the costs could be reduced or how the additional costs will be split among the funding partners because the information was so new.

The Federal Transit Administration is expected to pay for 50 percent of the capital cost. The largest local funder is CTIB, with a 30 percent share, and the state and Hennepin County each pay 10 percent.

The new estimate is the latest in a string of challenges for the line, which is currently involved in two federal lawsuits. An updated supplemental environmental impact statement, set to be published in mid-May, could highlight other environmental issues that would drive up the project’s cost.

To date, $59 million has been spent on the line, according to the Southwest project office.

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