Costs and delays mount for downtown L.A. subway link

A $1.4-billion downtown subway project designed to seamlessly connect three of Los Angeles County’s far-reaching rail lines has been hailed as the missing link in Metro’s expanding mass transit network.

But before tunneling has begun, the Metropolitan Transportation Authority is reporting cost overruns and schedule delays on the 1.9-mile Downtown Regional Connector.

Complications with the relocation of electricity lines and other underground utilities have eaten through about half of the project’s $92.7-million reserve for unexpected cost increases, a fund that was supposed to last five more years.

The problems could delay the regional connector’s projected late 2020 opening date by at least six months, according to a new Metro analysis. The report indicates the estimated $1.42-billion price tag for the subway connection needs to grow by $130 million, or 9%, to cover the added expenses and replenish the reserve fund.

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It’s not uncommon for the price tag of major public works contracts to rise. But experts say cost overruns so early in the process do not bode well for the four to five years of heavy construction to come on a line that will snake from the 7th Street subway station north of Staples Center to the eastern edge of Little Tokyo, near Union Station.

“Frankly, construction authorities have ample experience with this,� said James E. Moore II, a USC professor who studies engineering and transportation. “There are always unexpected costs — so much so that one could argue, they shouldn’t be unexpected.�

It would probably be wiser for Metro and other agencies to budget larger reserves for unforeseen contingencies at the front end of projects, Moore said. “But there’s always pressure to forecast a somewhat optimistic cost,� he added, “because it makes approving the project more palatable.�

The cost overruns come at a sensitive time for Metro, which is in the middle of an unprecedented boom in rail construction. Five separate rail projects are in progress, including lines to Santa Monica, Inglewood, Azusa and L.A.’s Mid-Wilshire district.

The downtown subway is seen as the linchpin of this network, allowing passengers to seamlessly move through downtown without changing trains. Right now, for example, passengers coming from Long Beach must get off the Blue Line and transfer to the Red Line, then the Gold Line, to reach Pasadena or East L.A.

The revised budget and schedule projections for the connector were disclosed as Metro considers asking voters to approve another half-cent tax increase that could raise an additional $120 billion for transportation projects.

Metro officials acknowledge the early difficulties on the connector, but point to their successful completion of major transit projects stretching across the county.

“These kinds of stumbles that we’re having here are very common in construction projects, but especially when you’re doing it in a huge business area, in a downtown environment,� said Metro spokeswoman Pauletta Tonilas. “It’s not a surprise that we’ve hit some bumps in the road.�

Major transportation projects in Los Angeles, both highway and rail, have tended to go over budget. In the 1990s, the $4.7-billion Metro Red Line subway from Union Station to North Hollywood was plagued with cost overruns and delays, partly caused by a sinkhole in Hollywood.

The Expo Line from downtown to Culver City cost $978 million, about 52% more than its original $640-million price tag. And the infamous 405 Freeway widening is facing cost increases beyond its current $1.1-billion budget as Metro works to settle claims filed by the contractor.

In the Metro report, staff noted the regional connector’s original budget of $1.36 billion was “set very early in the process� because the agency was seeking to “expedite� the approval of federal funding.

Indeed, early last year, the Federal Transit Administration provided $893 million in grants and low-interest loans, covering more than 60% of the project cost. In return, Metro agreed that the regional connector would begin carrying passengers by May 29, 2021.

That date gave Metro about five months of wiggle room in the construction schedule for unplanned delays.

Now, meeting the May 2021 deadline looks unlikely, the report says. The connector could open 10 months late, although the proposed $130-million increase could help reduce delays.

Missing the May 2021 deadline raises the possibility that $587million in federal funding for the connector could be jeopardized, and call into question future federal funding, staff said.

“We don’t anticipate any issues with the FTA funding,� Tonilas said in an interview. “The FTA has a vested interest in the projects that they fund just as much as we do.�

Mentioning the possibility of delayed or revoked funding in the staff report, she said, was “in the spirit of full disclosure.�

Where the money would come from to fund a $130-million cost increase is still uncertain. Restrictions included in two of the special voter-approved sales taxes used to fund Metro ban use of the revenue for subterranean projects. Metro staff has recommended cutting funding or delaying a future highway or transit project, but has not specified which.

The regional connector will add three new train stations in downtown Los Angeles: at 1st Street and Central Avenue, 2nd Street and Broadway, and 2nd and Hope streets. Officials say the connector is expected to increase rail ridership by 17,000 boardings a day.

Like all such projects, construction began with the relocation of power, gas and telecommunications lines to make way for tunneling equipment.

That can be one of the costliest and most unpredictable parts of major public works projects. Crews often discover deteriorating wires, old wells and below-ground remnants from long-gone structures.

“If you’re condemning land in a remote area of the Central Valley, the risks of utility problems are low,� said USC’s Moore. “If you’re digging up streets in downtown Los Angeles, be prepared for a circus.�

Crews had planned to leave electrical lines underneath 2nd Street and Broadway rather than move them out of the way, Metro staff said. But the deteriorated condition of lines required that they be replaced, at an added cost of nearly $27 million.

Since Metro selected a contractor, the agency has made nine changes to the contract, totaling $35.7 million more, staff said.

In the internal report, Metro staff said they would work with federal officials to conduct a “detailed risk assessment� of potential future costs and delays for the regional connector.

And by 2018, the report noted, Metro may need to seek “additional funding resources� for the project.

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