Southwest LRT secures funding to apply for federal match

Date: Thursday, September 1, 2016

The Southwest LRT Project is officially moving forward, after securing the remaining local funding commitments this week. The Metropolitan Council, Counties Transit Improvement Board (CTIB), and Hennepin County Regional Railroad Authority each approved additional funding commitments to position the project to secure more than $900 million in federal funds for half the construction costs.

The Council voted Aug. 31 to authorize the future issuance of Certificates of Participation for $103.5 million. CTIB and Hennepin County each agreed to contribute an additional $20.5 million. These contributions will together fill a $144.5 million funding gap, made up by the remaining necessary state match of $135 million plus $9.5 million in local delay costs caused by the legislature’s inaction in May.

SW LRT Funding piechart.The Council will issue the certificates in July 2017, which gives time for the legislature to weigh in during the next legislative session, at which time the Council hopes it will vote to approve increased transit funding and make the certifications unnecessary. If the certificates are issued, the Council will finance $91.75 million of the certificates, while CTIB will finance $11.75 million.

As a result of this week’s actions, the federal government will now prepare to execute an agreement next year to pay half the project’s costs, which amount to nearly $929 million of the $1.858 billion project.

“We are close to completing the design and beginning to prepare final specifications for the blueprints for potential contractors to examine and prepare their bids,” said Met Council Chair Adam Duininck. “Restarting the project at a later date would have been nearly impossible, and abandoning the work would have jeopardized our relationship with the Federal Transit Administration. Quitting now would have left uncertain the fate of other regional transit projects such as the METRO Blue Line LRT Extension, the Gateway bus rapid transit line, and the entire transitway system.”

The local funding commitments were made following a public discussion on Aug. 25 called by Gov. Mark Dayton, where he expressed support for the option. As laid out at the meeting, without the stopgap funding, the project would have been forced to lay off 45 agency staff and permanently reassign 86 consultants, incurring $5 million in shutdown costs and likely permanently killing the project. To date, local partners have spent more than $140 million on design and environmental work.

“There was a huge show of support at that meeting, from business, labor, local elected officials, and communities of color, who together advocated for SWLRT,” said Duininck. “They understand that we need to expand the Green Line to connect people in St. Paul and Minneapolis, as well as those along the future Blue Line Extension, to the jobs-rich southwest communities. This line will connect people with jobs and provide another transit option for southwest commuters. It will also advance equity, providing transit options to the many people of color living along the corridor throughout Minneapolis, St. Louis Park, Minnetonka, Hopkins and Eden Prairie.”

(For details on the corridor’s diversity and population and employment growth, see “Southwest by the numbers” at the bottom of this article.)

Certificates of Participation function similar to bonds. Duininck says while they were not an ideal path forward, it was a better option than shutting down the project or facing additional delay costs, amounting to $1 million a week since the end of the previous legislative session.

“I remain hopeful that the legislature will act next year to approve a regional transit sales tax. This would not only make it unnecessary to issue the certificates, but would provide the capital and operating costs necessary for SWLRT and future transit investments,” he said.

Next steps

Project staff will work with regulatory agencies to obtain environmental permits for work, begin acquiring 154 private parcels for right-of-way, finish the designs, and plan for construction to start in the second half of 2017. The 154 parcels consist of approximately 130 acres for permanent acquisition and approximately 40 acres for temporary acquisition. No single-family homes, apartments or condominiums would be acquired. No land has been purchased yet.

  • November 2016 — FTA to approve entry into engineering phase

  • November 2016 — Council to award contract for 27 light rail vehicles

  • Early 2017 — Council to apply to FTA for Full Funding Grant Agreement (FFGA), the federal government’s contractual commitment to pay half of the project’s construction costs

  • First half of 2017 — Issue bid documents for the civil, systems, and operations and maintenance facility construction contracts

  • Mid-2017 — Receive FFGA

  • Second half of 2017 — Begin heavy construction

For the 14.5-mile, double-tracked Southwest LRT line, crews will build:

  • 15 new stations plus the foundation for a station to be built at a later time at Eden Prairie Town Center

  • 14.5 miles of new double LRT track

  • 3.5 miles of bridge structures

  • A little more than a half-mile of tunnels (one in the Kenilworth corridor of Minneapolis and one under Highway 62 in Eden Prairie)

  • 6.5 miles of retaining walls

Southwest LRT by the numbers

By 2040, the METRO Green Line Extension is expected to carry an average 34,000 riders a day. The Southwest Corridor is home to some of the fastest-growing employment centers in the Twin Cities and its population is growing and becoming increasingly diverse. See charts:

  Within ½ mile of Proposed Stations Minneapolis Central Business District Total Green Line Corridor*
2014 Employment 64,300 126,800 309,500
2035 Employment 80,900 145,300 377,700
Growth 2014-2035 26% 15% 22%
* Southwest Station to Union Depot Station
  Within ½ mile of New Stations Within ½ mile of Shared DT Minneapolis Stations Total Green Line Corridor*
2014 Population 35,800 16,400 129,600
2035 Population 55,800 35,600** 188,100
Growth 2010-2035 56% 117% 45%
* Southwest Station to Union Depot Station
** 2040

People of color comprise 27% of the corridor's population, compared with 24 percent for the region as a whole. Southwest LRT station areas with percentages of people of color higher than the regional average include:

  • Minneapolis: Target Field (37%), Royalston Ave/Farmers Market (41%) and Bassett Creek Valley (42%)

  • Hopkins: Blake (38%) and Downtown Hopkins (28%)

  • Minnetonka: Opus (26%)

  • Eden Prairie: Southwest (49%) and Town Center (49%)

According to Hennepin County’s Community Works 2013 Southwest Corridor Housing Inventory, more than half of the population within a half-mile of the line is age 35 and younger. This “millennial generation” is generally demanding more transportation options and prefers modes other than cars.

The project is expected to employ 7,500 construction workers with an estimated payroll of $350 million from 2017 to 2020, followed by six months of testing the system and the purchase of 27 new light rail vehicles before service begins in 2021.

By comparison, the Central Corridor LRT Project, which began carrying passengers in June 2014 as the METRO Green Line, employed 5,500 construction workers from more than 60 Minnesota counties and had a payroll of $250 million.

Posted In: Communities, Planning, Transportation

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