Southwest light rail's new $1.74 billion budget approved by Met Council

After years of rancor and controversy, the embattled Southwest light-rail line appears to be back on track after the cost ballooned to $2 billion this spring. Now, the state's largest transit project is moving forward — but with a new slimmed-down price tag of $1.74 billion.

On Wednesday, the Metropolitan Council approved a new budget for the 14-mile line that links downtown Minneapolis and Eden Prairie, after the revelation last spring that the project's cost had increased by $341 million.

The regional planning body cut the final station at Mitchell Road in Eden Prairie, and deferred another at the city's Town Center. Now the line ends at Southwest Station in Eden Prairie, already a big bus center that soon will be a multimodal hub.

These cuts, and others, totaled about $250 million. But complete funding for the project is not yet assured. The state has yet to pitch in its 10 percent commitment — so the project still faces formidable challenges.

"I think we struck a good balance that was pretty thoughtful," said Met Council Chairman Adam Duininck. "We certainly made reductions, but getting to Southwest [Station] was important, and we got there."

The council vote was unanimous except for member Wendy Wulff, who questioned why the body was supporting a project that still has not nailed down necessary funding from the state. As planned, the state is slated to kick in $165 million of the project's capital costs — but $151 million has yet to be appropriated.

"We still have a 10 percent partner who is not even near giving us 10 percent," she said.

Wulff, who was appointed by former Gov. Tim Pawlenty, vocalized what many see as the next formidable hurdle for the Southwest line.

Getting an often-recalcitrant Legislature to agree on a massive, metro-area transit project next year will be a tough slog, but Duininck says Southwest now has some momentum, particularly among the cities that lie in its path.

It was their commitment in large part that kept the project going. After the decision was made to end the line at Southwest Station, stakeholders had to figure out how to raise money to make the plan work. So, they passed the fiscal hat in an effort that one official likened to a public-television fund drive. Eden Prairie donated city-owned land worth $3 million; Minnetonka and St. Louis Park each pledged $2 million; Hopkins chipped in $500,000.

On Tuesday, the Hennepin County Board committed an additional $8 million, and its regional railroad authority will donate land worth $30 million along the rail corridor, which stretches from Minneapolis to the Shady Oak Station in Minnetonka. The land donation will be matched by the Federal Transit Administration (FTA), a key funding source for the project.

Despite the furious fundraising, about $7 million still needs to be found, either from local coffers or by cutting more.

Minneapolis did not provide an additional cash boost, arguing that it had done its part last year in a deal that eliminated a tunnel from the Kenilworth corridor between Cedar Lake and Lake of the Isles, at $30 million in cost savings. A $12 million bike bridge along the Cedar Lake Trail in the city was cut more recently.

Still, there are hard feelings. At a work session of the St. Louis Park City Council on Monday, several council members questioned why Minneapolis, with five stations, was not contributing cash, and why there was no chip-in from Edina, one of the wealthiest communities in the state. (There is no stop in Edina.)

"We have a $341 million math problem that has become a political problem," said Council Member Jake Spano.

Council Member Susan Sanger suggested that St. Louis Park donate its $2 million, with the caveat that Minneapolis put cash on the table. (The council has yet to vote on the funds.)

"I'm almost at the point of saying, 'Let's be done with it,' " said Council Member Steve Hallfin. "We've played nice in the sandbox, even though others have not."

With the Met Council's action Wednesday, a project update will now be submitted on Aug. 3 to the FTA for inclusion in President Obama's fiscal 2016 budget. Duininck will travel to Washington, D.C., next week to meet with officials from FTA, which is paying $827 million of Southwest's cost.

Maryland Gov. Larry Hogan recently nixed the $2.9 billion Red Line in Baltimore — which was competing for federal dollars along with Southwest, Duininck said. Competition for these funds is fierce, he said.

One contingency to make up for the lack of state funding in Minnesota might involve the Met Council issuing "certificates of participation" in lieu of the state's share. This financial tool is often used by local governments to raise money and is backed by anticipated revenue, such as the motor-vehicle sales tax.

The idea has drawn questions from Rep. Tim Kelly, R-Red Wing, who heads the House Transportation Policy and Finance Committee, and Duininck said the two are slated to meet next week. He's hopeful that the Legislature will adopt a comprehensive transportation plan that includes funding for Southwest.

Shortly after Wednesday's vote, state Rep. Jim Nash, R-Waconia, issued a statement expressing his disappointment. "The costs are too high and the benefits are questionable at best," said Nash, also vice chairman of the House Subcommittee on Metropolitan Council Accountability and Transparency. "This is an unneeded expense that, like other light-rail projects, will cost more and deliver less than promised."

Janet Moore • 612-673-7752