Deadline extended to keep $250M Honolulu rail project grant

Language put into one of the bills that make up the gargantuan congressional pandemic relief package approved late Monday would keep alive the city’s hopes of receiving $250 million in federal grant money for its financially strapped rail project, U.S. Sen. Brian Schatz, D-Hawaii, said Tuesday.

That’s assuming President Donald Trump signs the highly anticipated $900 billion appropriations package of bills. On Tuesday the outgoing president criticized the economic stimulus bipartisan effort and threatened to not sign it.

City officials have been fretting over the possibility of losing the $250 million from the Federal Transit Administration because the funds are set to lapse at the end of the year, and FTA officials have indicated it won’t release the money anytime soon.

The money is part of the $1.55 billion federal grant that the FTA in 2015 agreed to provide for the East Ka­polei-to-Ala Moana project. While the FTA has released roughly $800 million of that promised funding, the remaining $755 million has been held in abeyance pending receipt of a satisfactory recovery plan, essentially a detailed written assurance, from the Honolulu Authority for Rapid Transportation that there will be enough funding to complete the entire 20-mile, 21-station line.

HART has not produced such a plan largely because of uncertainty over the financing for the final four miles of the rail line. A years-long effort to secure a public- private partnership led to friction between HART, which is tasked with overseeing construction of the project, and Mayor Kirk Caldwell’s administration, which is supposed to be in charge of operations and maintenance.

The P3 arrangement was supposed to help pay for construction of the final, 4.16-mile leg of the project and a major transit center at Pearl Highlands, and hold the contract to operate and maintain the entire line for the first 30 years.

During the summer, Caldwell backed out of his support for the P3 process, saying there were strong indications the proposals from vendors were going to be significantly higher than the $1.6 billion allotted for it.

That hypothesis was proved true last week when HART and the Caldwell administration unveiled the cost proposals from two hui of bidders. Both submitted construction estimates that were more than $2.7 billion, or 60% higher, than the $1.7 billion “affordability limit.”

Earlier this month HART CEO and Executive Director Andrew Robbins agreed to follow Caldwell’s lead and veer off the P3 track and instead work on procurement of a contractor that would build the final stretch of guideway through a more traditional design-and-build approach.

The price tag for the project has ballooned to roughly $10 billion, which includes about $1 billion in financing costs, from the $5.3 billion estimate that city officials gave when the agreement with the FTA was reached in 2012.

Schatz, a member of the Senate Appropriations Committee, said he worked with congressional colleagues to include the language with what he described as an extension of the Dec. 31 deadline.

“My objective was to prevent the loss of these federal dollars,” Schatz said in a statement. “While this extension buys them more time, HART and the City must now revise their financial plan and come back with something that can actually work. They now have an opportunity to focus on what is most important — developing a clear-eyed plan for the people of Honolulu.”

Caldwell and Robbins, both of whom are scheduled to leave their jobs at the end of the year, voiced relief at Tuesday’s news, as did City Council Transportation Chairman Brandon Elefante.

“I think it’s about the best Christmas present that could be delivered to the City and County of Honolulu,” Caldwell told reporters. He cautioned that he doesn’t want to “count our chickens before they hatch” since Trump must still sign the bills into law, the mayor said.

“It now gives time for the incoming administration and the new executive director of HART the breathing room to come up with a plan and a proposal to complete the project all the way to Ala Moana, which is absolutely necessary (because it is) the major transit hub in the state of Hawaii,” Caldwell said.

Robbins’ contract runs out at the end of the year, and the HART board announced it is looking for a new executive director. Caldwell, meanwhile, will be replaced by incoming Mayor Rick Blangardi on Jan. 2.

Robbins, despite his disagreements with Caldwell on the P3 scenario, echoed the mayor’s comments in a written release.

He thanked Schatz and the other members of the Hawaii’s congressional delegation in helping secure the extension.

“This will provide the rail project some needed breathing room while HART and the City look for additional sources of funds to complete the construction of the rail system,” Robbins said.

Elefante, whose term runs for another two years, also voiced relief. A strong proponent for the rail line, Elefante said that in 2021 “HART and the city are poised to revise the financial plan for this transformational project.”