Councilman Huizar: Downtown Los Angeles streetcar project moving forward despite funding controversy

LA Streetcar

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Image depicting a proposed streetcar to run in downtown L.A.

UPDATE 6:45 a.m.: Councilman José Huizar along with other streetcar advocates hosted a community meeting Monday night to reassure residents that the downtown streetcar was still pushing forward. Recent reports have shown the initial costs of the streetcar may have been grossly underestimated, but Huizar maintains these new numbers are “worst-case scenario.”

The councilman said although they may have “jumped the gun” by releasing updated estimates for the project, he wanted to be “open, honest and transparent.” 

Shiraz Tangri is general counsel for Los Angeles Streetcar, Inc. – the non-profit pushing for the Downtown streetcar. He said they expect the project to cost between $153 and $162 million, plus utilities. He said they should have a more accurate estimate of utility costs by early next year. Some reports put the cost at more than $300 million.

Tangri said utility relocation cost estimates are extremely high because they haven’t figured out alternatives – yet.

“They’re based on the cost of if we had to do really substantial utility relocation where we’re relocating water lines and other major utilities all throughout the route,” Tangri said.

Many of the utility problems could be avoided through design changes, or may be paid for by the City instead of the streetcar project, he said. One of their biggest priorities over the coming months will be to figure out a more realistic cost estimate of the overall project, Tangri said.

And regardless of cost, streetcar supporters continue to tout its economic benefits to all of Downtown Los Angeles. City officials say the project will create thousands of new jobs and bring $1.1 billion in new development to the area.

PREVIOUSLY: Downtown Los Angeles streetcar: Public to be updated on progress after funding controversy

Downtown L.A.'s streetcar project has been chugging uphill in recent months. Discrepancies in the project's budget have led to increased scrutiny of the overall plan. So Monday at 6 p.m., Los Angeles Streetcar, Inc. — the group advocating for the project — will be hosting a community meeting at LAPD headquarters.

In addition to a question and answer session about the streetcar project, Councilman José Huizar  – who represents the area – is scheduled to speak. The goal is to address the project's environmental process, local and federal requirements and upcoming milestones.

This comes after reports that the streetcar faces a multimillion dollar gap in funding. James Lefton, executive officer for transit services at the Los Angeles Department of Transportation (LADOT), told KPCC in September that the streetcar could face an $86 to $181 million shortfall.

According to the Los Angeles Times, the cost could go as high as $327 million, and the large gap may not have been a surprise to city officials.

The streetcar's initial estimate of $125 million didn't include accurate costs for utility relocation — like moving underground water pipes and electrical lines – to make way for the streetcar. It also didn't account for inflation. Two factors that have caused the budget to more than double, by some estimates.

And now, funding for the project may be at risk. About $62.5 million is slated to come from Downtown property owners, who voted in favor of a parcel tax that would fund a portion of the streetcar's design, engineering and construction costs. But the other $75 million was to come from a Federal Transportation Administration grant. In order to get that money, the rest of the project's funding must be secured — a task that appears increasingly daunting.

So L.A. officials hired a "utility expert" to come up with creative ways to sidestep problems, such as slightly adjusting the streetcar's route. Advocates are also looking into public-private partnerships that could help fund part of the project.

But Shiraz Tangri, general counsel of Los Angeles Streetcar, Inc., says these new budget numbers are still "worst-case scenarios" and need further analysis.

Tangri will also be at Monday's community meeting and expects to give an overall update on the project and spend time addressing the funding controversy.

Original projections stated that streetcar construction could begin as early as next year, with the first riders hopping on by 2016. This timeline could change drastically depending on how the  funding issues are resolved.

The community meeting takes place on Monday, Nov. 4 at 6 p.m. It will be held at the Ronald F. Deaton Civic Auditorium at the LAPD Headquarters.

Correction: An earlier version of this story reported that the deficit for the project could reach $327 million. The correct statement is that the total cost of the project could reach that height. KPCC regrets the error.

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