Southwest LRT builder attributes problems to faulty design, criticizes state probe

The contractor building the $2.7 billion Southwest light-rail line attributes many of its cost overruns and delays to a "deficient design" crafted long before ground was broken on the project nearly five years ago.

In documents obtained by the Star Tribune through the state's Data Practices Act, officials with Lunda McCrossan Joint Venture (LMJV) also take aim at the state's Office of the Legislative Auditor, calling its critical reports on the project "inaccurately reported or incorrectly interpreted" and "lacking any apparent experience or expertise."

The legislative auditor has "either misrepresented the facts or twisted them to serve an objective," wrote Dennis Behnke, CEO of Wisconsin-based Lunda Construction Co., in a March 29 letter to Metropolitan Council Chair Charlie Zelle.

LMJV largely has refrained from commenting publicly on Southwest's issues since it was awarded the $800 million civil construction bid in 2018.

Legislative Auditor Judy Randall declined to comment on the LMJV documents. Two additional reports on the project from her office are expected by the end of the year.

The Met Council is overseeing construction of the 14.5-mile line, which will connect downtown Minneapolis and Eden Prairie through St. Louis Park, Hopkins and Minnetonka once it begins service in 2027. The extension of the current Green Line is more than 70% complete.

Southwest is an enormously complicated infrastructure project, one the Met Council calls a "generational investment." It includes 16 new stations, 29 bridges and two light-rail tunnels, including one in Minneapolis' narrow and densely populated Kenilworth Corridor between Cedar Lake and Lake of the Isles.

The project's expanding budget has made it the most expensive public works project in Minnesota history, as well as the focus of growing public disdain. Southwest's original $1.25 billion budget has more than doubled, and its opening date has been pushed back nearly a decade.

Both Lunda Construction and C.S. McCrossan Inc. of Maple Grove had extensive experience building large infrastructure projects, many of them in Minnesota, when they formed a joint venture to bid on Southwest. Construction began in 2018.

Issues surface

The Met Council has blamed the project's increasing costs on a $93 million crash wall separating light-rail and freight trains west of Target Field, a late addition required by BNSF Railway as a safeguard for "a 200-mph high-speed train," according to LMJV. The council has said the wall wasn't in the overall bid package because its design was not complete.

Adding the Eden Prairie Town Center Station back into the project, after it had been nixed to save money, also boosted costs. And then there were the difficulties cited by the Met Council in building a tunnel for light-rail trains in the Kenilworth Corridor, which required a different construction method to protect the nearby Cedar Isles condo complex.

In documents supplied to the legislative auditor, LMJV said that it was unaware that Southwest's design was "incomplete, erroneous and inadequate" when it bid on the work in 2018. As a result, according to LMJV, the parties "have been struggling with the consequences of that problem ever since."

Some 2,544 construction changes deemed "continuous and extensive" affected the project's schedule, resulting in "increased costs due the contractor being on site longer and escalating labor and material costs," LMJV said in a statement to the Star Tribune.

The company said it had "no fault or liability related to these issues," and declined further comment.

LMJV says the legislative auditor gave Southwest's engineer of record "a pass despite all the problems with its design," without naming the firm. A group of consultants led by AECOM, a publicly traded Texas-based infrastructure consulting firm, is responsible for the Southwest's overall design and engineering work.

In October 2021, the Office of the Legislative Auditor released a memo detailing a fraught relationship between AECOM and the Met Council. AECOM did not respond to a request for comment on this story.

Other challenges

In the documents, LMJV also details the challenges of construction in an active freight railroad corridor, which is adjacent to the popular bike and pedestrian Kenilworth trail.

And there were issues involving "wealthy communities not supportive of the project with little tolerance for the impacts arising from construction," LMJV says. Residents in Minneapolis' Kenwood neighborhood unsuccessfully sued the Met Council in 2014 to stop the project.

LMJV says it was ultimately able to agree on a schedule with the Met Council to keep the project moving forward — a victory it said was "mistakenly criticized" in the legislative auditor's March report.

That report calls out the Met Council for not withholding payment to LMJV "for repeated failures to provide an acceptable project schedule." LMJV calls that assessment "questionable," and notes the auditor's staff members are "not an expert in the design, scheduling or project administration of megaprojects."

LMJV further states in its correspondence that "had the parties engaged in the adversarial process suggested by the [legislative auditor], the project would now be in litigation, cost many, many millions more, and be delayed by many more years."

In Randall's response to Behnke, she notes that he took exception to "aspects of our report. While we appreciate your feedback, we are confident in the findings and conclusions as we presented them."

Megaproject woes

In a 37-page position paper submitted to the Office of the Legislative Auditor, LMJV details the difficulties not only with the Southwest project, but other megaprojects across the country.

A 2015 study by the consulting firm McKinsey & Co. notes that about half of rail projects typically exceed their budgets. And bridges and tunnels — endemic to the Southwest project — incur an average 35% cost overrun, according to McKinsey.

"Obviously these projects are super complicated and so is the oversight," said Kyle Shelton, director of the University of Minnesota's Center for Transportation Studies.

Shelton said transit agencies in the United States historically have relied on outside consultants and contractors to design and build megaprojects. That isn't bad, he said, "but it leads to fewer people in agencies that have the experience to really oversee these projects over long durations."

"Almost everybody involved in these projects would say the projects could be better," Shelton said. "Often the political side of things makes it more difficult, because the conversations are hard. Sometimes you have to pay way more [to plan] before you start, which isn't always politically expedient."

Controversy erupts again

A firestorm erupted at the Legislature when the legislative auditor's report was released in March, much of it directed at the Met Council for a lack of transparency related to Southwest's issues.

In its response to the legislative auditor, LMJV notes that the Met Council couldn't have accurately forecast when the project would be complete because the original schedule did not factor in the effect of all "design errors," which "were unknown at the time."

The firm recommends that the Met Council perform an independent review to evaluate "the extent to which the project's significant cost overruns are due to issues with its design." Council officials say they intend to conduct a thorough review of Southwest's cost and issues affecting the schedule at the appropriate time.