Rochester's rapid bus line project faces delays after project bids come in over budget

ROCHESTER – Work on a proposed 2.8-mile bus rapid transit line was supposed to start in Med City toward the end of the year. A recent spate of construction bids has city officials thinking otherwise.

Rochester plans to rebid a significant part of the work involved in its upcoming bus rapid transit line after bids came in significantly higher than the city’s estimate.

The new bus line likely won’t be done before 2027 as a result, missing Rochester’s initial November 2026 deadline.

“We are talking about what an interim service looks like,” Deputy Administrator Cindy Steinhauser said. “Even though the project isn’t complete, say the stations aren’t done but all the civil work is done, theoretically you could run all your buses.”

City staff estimated the bulk of the work, including street reconstruction, an underground tunnel and six bus station shelters along the 2nd Street corridor west of downtown, should have cost a little more than $83 million when they put the project out to bid earlier this year.

Steve Sampson Brown, the city’s director of construction, told the Rochester City Council earlier this week that the biggest cost difference was in creating the line’s transit stations and underground tunnel. The lowest bid came in about $30 million over budget on those aspects of the project, while everything else was within budget estimates.

City officials plan to split the shelters and other amenities off into a separate project in the next bid attempt in hopes of saving more money.

“We obviously know where our disconnect is,” Sampson Brown said.

This is the second time Rochester has tried to bid out the project. City officials couldn’t secure bids from contractors the first time because of last-minute questions over technological upgrades.

The latest bids came from contractors in the region with little experience in complex projects such as a bus transit line, according to city consultants. Sampson Brown also cited the increasing cost of construction materials as another factor; material costs in Rochester alone rose more than 4% in January.

Construction experts worry federal tariffs on steel and aluminum will drive materials prices even higher this spring. Dan McConnell, president of the Minnesota State Building and Construction Trades Council, told the Minnesota Star Tribune earlier this month that federal funding freezes could also cause construction season delays in Minnesota if federal funding isn’t released in time to start projects before next winter.

City officials say the $85 million grant they received for the bus rapid transit project hasn’t yet been affected by federal actions.

It’s more likely the project will be affected by labor demands. Rochester starts major Mayo Clinic and state-funded projects over the next few years.

While the city could seek out contractors from the Twin Cities area, Sampson Brown said the higher metro labor costs would likely only increase the project’s budget.

The rapid transit line has been in the works for the better part of a decade to expand transit options in Rochester and cut down on future congestion. The city has contracted with Mayo Clinic to operate the bus line, while the western edge of the line is expected to create a new residential and commercial hub known as the West Transit Village.

The bus line has grown in cost over the years as well, from about $115 million more than three years ago to about $175 million once finished.

The city and Destination Medical Center (DMC), the local initiative to turn Rochester into an international medical hub, have already used about $58 million to prepare for the project.

Rochester was close to using DMC funding to take on the latest bid, but a last-minute special meeting was canceled after the contractor pulled its proposal, citing accounting errors that would have made the bid more expensive.

Council Member Norman Wahl said the delays are frustrating, but worth the investment.

“It would be irresponsible to abandon a vital cog in making our downtown accessible for decades to come,” he said.