Estimated costs have skyrocketed 54% to 77% in one year for a new light rail maintenance facility to be built by Sound Transit in Federal Way or Kent.
Deputy Sound Transit CEO Kimberly Farley described how unrelenting pressures are continuing to drive up cost estimates to significantly higher levels during a Jan. 7 remote Sound Transit Board Executive Committee meeting.
Farley said that real estate and construction market conditions are driving up the costs of future projects, including light rail extensions to West Seattle, Ballard and the Tacoma Dome and a new operations and maintenance facility.
The estimated cost increase for the light rail extensions to West Seattle and Ballard are more than 50% higher than the 2019 estimates. For the Tacoma Dome, it’s up at least 10%.
“For the Operations and Maintenance Facility South, the latest estimates for the multiple options under review predict an increase of 54% to 77%, with the latter being necessary to build on the (former) Midway Landfill (in Kent) if that alternative is chosen at the end of the current environmental process,” according to Sound Transit.
Cumulatively, the increased cost estimates for the agency’s projects amount to between $4.8 billion and $6.2 billion.
While estimated construction costs are up as Sound Transit learns more during the project development process, the largest single cost driver is the need to acquire right-of-way while real estate prices continue to rise unabated, even during the pandemic as new development occurs near projects, according to the agency.
Three parcels near the West Seattle Junction offer one example impacting the West Seattle extension. These parcels, which are being redeveloped into a mixed-use site with 306 apartments, were initially estimated at $76 million to acquire, but are now estimated to cost over $250 million, including relocation of 306 households, according to Sound Transit.
The updated 2020 estimates that will be independently reviewed include increases over the 2019 estimates at all three sites under consideration for a light rail maintenance facility, necessary to help handle additional vehicles that will serve an expanded line, including a 7.8-mile extension to open in 2024 from SeaTac to Federal Way:
• South 336th Street, Federal Way, near I-5, which is the location of the Christian Faith Center Church and school.
2020 estimated cost: $1.1 billion
2019: $759 million
2015 ST3: $649 million
• South 344th Street, Federal Way, near I-5, which is an industrial area, includes several businesses: Garage Town, which offers private custom storage facility; an RV storage facility; and Ellenos Yogurt Factory.
2020 estimated cost: $1.1 billion
2019: $800 million
2015 ST3: $649 million
• Midway Landfill, Kent, west of I-5. The landfill has been closed since the 1980s and is owned by Seattle Public Utilities.
2020 estimated cost: $2.4 billion
2019: $1.3 billion
2015 ST3: $649 million
The estimated increases of $478 million to $1.1 billion for the design options at the former Midway Landfill site have higher construction costs than the other sites due to unique requirements to address ongoing ground settlement at the landfill and the complex structures required to support building on top of a Superfund site.
The cost increases from when voters approved the ST3 measure in 2016 are 273% for the Midway site and 80% for the two Federal Way sites.
All three sites are being studied for the maintenance facility that needs to be built to service and store more than 140 light rail vehicles, according to Sound Transit. The facility requires at least 30 acres and would employ an estimated 300.
The draft environmental impact statement about the three sites is expected to be released in the first quarter of 2021 after an initial release date of November 2020 was delayed.
“Advancement of the design involved further analysis and identification of Sound Transit’s long-term systemwide operational needs,” according to Sound Transit. “The outcome of this analysis added facilities to support the entire light rail system and refined the configuration of the site. As a result, we found that a larger site is needed to accommodate a much larger total building square footage (50% larger) as well as additional tracks. Additionally, to minimize the increased site size, stormwater collection vaults are used to address site drainage.”
The board is expected to pick a preferred site for the maintenance facility later this year. The agency had planned to open the facility in 2026, but that date is expected to pushed out a year or two.
Sound Transit said that projects currently in construction continue to advance within their current budgets and schedules, having already absorbed these challenging market factors. By 2024, Sound Transit remains on track to launch light rail service to Northgate, Tacoma’s Hilltop neighborhood, Bellevue, Redmond, Lynnwood and Federal Way. These expansions will nearly triple the length of the region’s light rail system from 22 miles to 62 miles.
The cost of the Federal Way Link extension is $3.1 billion. Sound Transit is paying for that project with federal grants; through Sound Transit dedicated sales, rental car, motor vehicle excise and property tax revenues and with loans to be repaid by Sound Transit tax revenues.
In 2021, the Sound Transit Board will continue a realignment process to adjust plans and schedules for projects not yet under construction in response to the COVID-19 pandemic’s revenue impacts as well as these cost estimate increases. They expect to make final capital program realignment decisions by summer 2021.
Cumulatively, the cost estimate increases described and included within the finance plan total $7.9 billion in 2019 dollars and $12 billion in year-of-expenditure dollars on current project schedules. They contribute to an overall $11.5 billion affordability gap, which is 10.9 percent of the agency’s Long-Range Financial Plan through 2041 as the board moves forward with its realignment process.
The first emphasis in working to close the funding gap is securing additional financial capacity by seeking increased federal and state funding and employing every creative means that can be identified.
The board’s options for addressing whatever gap remains include delaying the delivery of projects to provide longer periods for revenue collection; delivering projects in phases; and reducing project scopes.
The board also retains the most extreme option, which it has not yet discussed, of suspending or deleting projects if deemed necessary to best realize the region’s critical transit needs within the parameters provided by voter-approved plans.
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