In wake of ballooning costs, even Southwest LRT backers ask: ‘Is it worth it?’

MinnPost photo by Peter Callaghan
Met Council Chair Adam Duininck: “When I say that all options are on the table I mean that.”

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 Fuhrmann 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.

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.

Fuhrmann — 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, Fuhrmann 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.

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Comments (27)

  1. Submitted by David Markle on 04/28/2015 - 12:08 pm.

    David Markle

    Hey, another great job by our unelected, unaccountable, unresponsive Met Council, huh? But I do appreciate Callaghan’s good articles.

    • Submitted by Nick Magrino on 04/28/2015 - 05:06 pm.

      Well, Hennepin County picked the route, not the Met Council. Comments like this highlight some of the existential risk here–people all over Minnesota are rabidly looking for red meat and drawing conclusions about the entire idea of mass transit in the Twin Cities, and this has all turned into the half-off lunch special at Fogo de Chao.

  2. Submitted by Jay Willemssen on 04/28/2015 - 01:12 pm.

    Quite the full-court press against SWLRT the past 2 days

    MinnPost sure is giving a lot of ink and prominence to this. Perhaps it would have been better presented as one article, seeing how little detail there was in the previous piece.

    Still haven’t seen what amount the Feds will be picking up at the new cost estimate or discussion about why the contingency fund went up so much – about 1/4 of the increase in the total estimate.

    Always suspected that the moneyed “liberals” west of downtown would find a palatable, passive-aggressive method to try and scuttle the project or at least the current alignment. Seems I was prescient.

    • Submitted by Sally Darg on 04/28/2015 - 04:03 pm.

      newsflash

      Dose of reality…. most of the “moneyed liberals” west of downtown aren’t close enough to the corridor to care about this train. Seriously. There’s a big bunch of us that have to go to work every day, are republican or independents, and still have to make house payments on our little, tiny, houses. Don’t generalize – it results in incorrect conclusions.

    • Submitted by Michael Hess on 04/29/2015 - 08:35 am.

      so you think…

      So you think shadowy moneyed “liberals” west of downtown somehow fixed the engineering reports or polluted the soil. If this cost overrun is what scuttles the project it will be attributable to the poor due diligence of the Met Council and not any local objections to the line, the Met Council and city governments have already shown they are uninterested in people who object to the line have to say.

  3. Submitted by Richard Adair on 04/28/2015 - 01:47 pm.

    Value of transit

    Just because this line’s in trouble from a value standpoint, let’s not go overboard. We are going to need mass transit as the metro area grows to 4 million people. The mistake here seems to have been underestimating the cost of abandoning the HCRRA corridor west of Hopkins and instead choosing to run the line south (through wetlands and across multiple freeways) to serve the Golden Triangle and Eden Prairie Center.

    How about terminating SWLRT in Hopkins and adding bus rapid transit along Hwy 169 to Eden Prairie? This could save around $600 million, provide a reasonable ratio of benefit to cost, and get a lot of commuters to work without using Highways 7, 212, 62, 100, 394, 494, or 35W. Cheaper than building an equivalent amount of highway capacity, as the right of way is already owned by Hennepin County.

    • Submitted by Matt Brillhart on 04/28/2015 - 03:58 pm.

      Nailed it. Spot on analysis and great solution too!

      “The mistake here seems to have been underestimating the cost of abandoning the HCRRA corridor west of Hopkins and instead choosing to run the line south (through wetlands and across multiple freeways) to serve the Golden Triangle and Eden Prairie Center.”

      Well said! While the Kenilworth segment was quite the boondoggle in its own right and increased the project cost by perhaps $200MM alone, it seems to have reached a good compromise that allowed the line to move forward.

      I suspect we have not even seen the last of cost increases in the portion west of Shady Oak Station in Hopkins/Minnetonka. That entire stretch creating a new path through wetlands, polluted land, etc. seems now to have been looked at through extremely rose-colored glasses.

      Your proposed solution is also a good one:
      “How about terminating SWLRT in Hopkins and adding bus rapid transit along Hwy 169 to Eden Prairie?”

      How about it Hennepin County? Shakopee and Scott County are just beginning a study of freeway BRT on 169. Met Council is participating in the study as well.

      We should take a serious look at ending SWLRT in Hopkins. There is no reason a Southwest extension couldn’t happen in the future as greater transit demand develops. An excellent interim solution could be to buy out Hopkins Honda and use that property as a massive park & ride lot for both Southwest and as transfer point with the Hwy. 169 BRT line. In the future, as Southwest LRT is extended further south and west, the P&R could be downsized and redeveloped into one of the greatest TOD sites in the region, adding hundreds of new residents to Hopkins, right on top of their station.

      • Submitted by Chris Shepard on 04/29/2015 - 03:54 am.

        Commuter Rail Option

        Rather than BRT from Hopkins, how about commuter rail (Northstar-style)? Using existing industrial rail could drop costs even further, and could potentially extend service much farther than Eden Prairie.

        • Submitted by Matt Brillhart on 04/29/2015 - 10:59 am.

          Commuter rail was studied – see SWLRT Alt “1A”

          Commuter rail was studied very early in the SWLRT process. Additionally, light rail was studied in the existing corridor through EP instead of turning south through Mtka, Golden Triangle, etc. (where the current cost increases lay). Problem is it doesn’t really go anywhere useful. Sure, the corridor eventually lines up with Chaska, etc. but you miss the populated and job-rich areas of EP on the way there. It is pretty sparse and residential through Mtka & northern EP. For my money, I’d rather have useful BRT on 169 (something which we are already studying anyways and SCOTT COUNTY would help pay for!!) rather than a “SouthStar” commuter rail that travels further to unpopulated areas.

  4. Submitted by Mike Davidson on 04/28/2015 - 02:41 pm.

    Time For a New Route

    As someone who has always thought the expansion of the light rail lines into the suburbs is a great idea, I have to say perhaps it’s time to rethink it. Beyond the ballooning cost you’ve got communities in St. Louis Park who have fought tooth and nail to put this project on hold because they just don’t want the line going through their neighborhood. Fine, to heck with SLP let them rely on buses and cars. I think an easier – and far more affordable – solution to expanding the lightrail is a NW line along the I94 corridor toward Maple Grove.

    • Submitted by Jesse Langanki on 04/28/2015 - 06:28 pm.

      blue line

      The blue line extension was originally intended to go to Maple Grove, but residents there didn’t want it. Hopefully on the future it can be forked so one terminus runs to Brooklyn Park and a second branch runs to Arbor Lakes.

  5. Submitted by Mike Downing on 04/28/2015 - 02:50 pm.

    LRT makes no sense with our population density. LRT needs to be viewed as a redevelopment project not a transportation project. When it is viewed as a redevelopment project for the inner city, the scope will be much smaller and the cost will be much smaller.

    We have barely increased our road capacity by 30% but our population has tripled in the last 45 years. Met Council and our MN Legislature will focus our limited resources on road & bridge capacity when they understand this.

  6. Submitted by Matt Bowers on 04/28/2015 - 03:38 pm.

    Roads and Bridges?

    Planning for the Southwest LRT started in about 2010–the first formal proposal date was August, 2010. In the that time. MNDOT has been spending about a billion dollars a year on roads and bridges–and that does not count the Stillwater bridge or county/municipal projects. We will be spending another billion dollars this summer. That comes to about $6 billion plus the Stillwater bridge–almost $7 billion.

    We have spent enormous sums on roads and bridges over the years but it never seems to be enough. We have not even started building the SWLRT and we complain that it is too expensive.

    As to “our limited resources”–when we punish politicians for making a sensible vote on increased gas taxes, we have only ourselves to blame.

  7. Submitted by Tom Melchior on 04/28/2015 - 03:55 pm.

    Population growth

    The TC metro has NOT tripled since 1970. 7-County metro population in 1970: 1,874,502 (U.S. Census). In 2013 (Met Council estimate): 2,950,885. This is a 57% increase in 43 years.

  8. Submitted by Jay Willemssen on 04/28/2015 - 04:25 pm.

    +43% = “tripled”?

    “We have barely increased our road capacity by 30% but our population has tripled in the last 45 years.”

    Minnesota population
    1970: 3,804,971
    2015: 5,483,681 (est)

  9. Submitted by Jesse Langanki on 04/28/2015 - 06:24 pm.

    No

    The chosen route is mediocre to begin with. Paying a premium price is no longer worth it. There are better, denser, cheaper cooridors for more transit investment such as I-394.

  10. Submitted by David Greene on 04/28/2015 - 11:18 pm.

    Don’t Panic

    The media hysteria surrounding this is unreal.

    As an engineer I can assure readers that large projects always go through cost fluctuations. Engineers are tasked with finding solutions within budget and other constraints. You start with your initial design, which is usually the highest-cost option and then refine it to lower costs. I have every confidence they’ll get the cost down. Whether it will go down enough, we shall see.

    But it is WAY premature to talk about abandoning the line, changing modes and routes and so on. Give the engineers time to do their work and then we can make decisions given options.

    And while Fuhrman is right that the increase is larger than on our other LRT projects, it is not atypical for projects around the country. Two LRT projects in Maryland at the same design stage as SWLRT had even larger cost increases and they are still moving on.

    • Submitted by Jesse Langanki on 04/29/2015 - 08:10 am.

      I don’t think it’s about panicking, but it seems as if all the studies that pointed to this route being the best possible use of limited transit dollars should be reviewed. This line has managed to alienate just about everyone involved, and each time an “agreement” is reached somebody is unhappy. The number of compromises has just become too much. If today was day one of the project and we knew all the concerns we now know, would we even start down this path?

      • Submitted by David Greene on 04/29/2015 - 03:31 pm.

        Route

        Note that the part of the route causing the latest cost increase is not at all controversial. Changing the route through Minneapolis would save the cost of a tunnel (less than this latest increase) but would add the cost of an additional, likely more expensive tunnel, not to mention much more utility work and increased operations costs.

    • Submitted by Bill Schletzer on 04/29/2015 - 08:13 am.

      Don’t panic?

      The project was initially sold at about a billion. We are up to 2 billion now and still a long way from a start. “You start with your initial design, which is usually the highest-cost option and then refine it to lower costs.” I have never heard of a large public works project that wound up costing less or even as much as the initial cost used to sell it to the public. Fluctuations go up and down. These are steady increases and should have been predicted. Either the engineers are incompetent or the project leaders chose to hide this information. This increase is not atypical because there is a culture of lying about public works projects by politicians

    • Submitted by Michael Hess on 04/29/2015 - 08:43 am.

      confidence

      Your confidence may be misplaced. It appears the team is discovering issues incrementally and there is a good chance this is not the last time. Key steps they skipped which may have avoided some of the lawsuits they have faced in Mpls and Minnetonka may have surfaced these issues earlier.

      • Submitted by David Greene on 04/29/2015 - 03:35 pm.

        Steps?

        What missed steps?

        Almost all of the cost increase came from testing that could not be done until they had an initial design.

  11. Submitted by Joel Stegner on 04/29/2015 - 11:51 am.

    Transit as a percentage of total transportation costs

    Is it getting too high? To determine that, we need to see some data, rather than speculation by people who have an ax to grind. There is also an assumption that we can continue to dump more buses onto already clogged highways as a solution. What percentage of suburban commuters are taking the bus to work? Double the number, and it doesn’t solve the congestion problem.

    Experience has shown that high income people vastly prefer light rail to buses, and if they don’t have it, they will continue to drive in greater,greater and greater numbers. Sooner rather than later, we will have nightmarish commutes that will have huge economic impacts on our metro area, not to mention our quality of life. And the longer it takes, the more it will cost.

    Perhaps it is time to do what many cities have done. Used existing transportation corridors for light rail and accelerate the building out of a complete system. Our timid approach, when our first two lines have greatly exceeded expectations without a complete system to rely on, is resulting in too little, too late and no sense in what this could do to make the Twin Cities a truly major league city,or better yet, a city that competes with the best cities in Scandinavia or Switzerland.

    • Submitted by Jay Willemssen on 04/29/2015 - 03:08 pm.

      Twin Cities mass transit spending in context

      This may not be the exact data you’re looking for, Joel, but it gives some sense of how prioritized mass transit in the Twin Cities is.

      There are 44 US urbanized areas with over 1 million people. The Twin Cities ranks 16th.

      Using NTD data, one can calculate inflation-adjusted mass transit spending (including fare and other non-governmental revenue) per capita over the latest 10 year period (2004-2013).

      Six urbanized areas that are smaller than the Twin Cities spent more per capita, in descending order of spending per capita:
      Salt Lake City
      Denver
      Baltimore
      San Jose
      Portland
      Pittsburgh

      Seven urbanized areas with more people than the Twin Cities spent less per capita, in descending order of spending per capita:
      Dallas
      Miami
      San Diego
      Atlanta
      Phoenix
      Houston
      Detroit

      It’s pretty clear the former group of areas, as a whole, are more in line with the culture and economy of the Twin Cities than the latter.

  12. Submitted by Jim Million on 04/29/2015 - 02:38 pm.

    Infeasibility Study?

    Mr Callaghan: “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.”

    Mr. Duininck: ‘ “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.” ‘

    Is this proposed inverse re-assessment of project feasibility in fact an Infeasibility Study?

  13. Submitted by Joseph Stans on 05/03/2015 - 07:56 am.

    this took less time than I thought

    I never expected the rail system to be built and it very probably will not be. When you cut project loose so it can be fondled by every loose cannon, bridge club, garden society and mindless organization that might possibly be affected it is a dead duck. Between the NIMBY’s and the armchair engineers and those that retired lately and really have nothing productive to do, there is a mass of bumbling idiocy to overcome and not enough money to do it.

    I was hoping that pragmatic Minnesotans would learn form other metropolitan areas abut, sadly, no luck.

  14. Submitted by Curtis Johnson on 05/03/2015 - 12:20 pm.

    SW LRT line

    This fuss is, at some level, laughable. Politicians and resistors slow the process down then act shocked that costs rise. As to the heavy state weigh-in on the supposed dilemma, the state’s share even of the now larger total is about half what was spent to replace the Wakota bridge over the Mississippi. If this were not ‘transit,’ the media coverage would not be so intense.

    And might someone ask a legal expert when the predictable lawsuits would end if this project is killed. Over too many years developers have been told this would happen. Property has been bought, plans invested in. Does anyone think those folks will sigh and say “Oh, that’s too bad.”

    The media can play a powerful role here by setting aside the theatrical politics and asking the right questions. If the budget needs trimming, explore seriously the Adam Platt suggestion: shorten the line, keeping it inside the beltway.

    Curtis Johnson

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