In a classic holiday-Friday news dump, yesterday afternoon Mayor Jenny Durkan’s office released a summary of the long-awaited third-party report on the Center City Connector. The summary, prepared by Big Four accounting firm KPMG rather than a consultant with specialized transit expertise, brings both good and bad news for the CCC project.
The headline number that drove immediate coverage, total capital cost, is definitely bad news. KPMG’s estimate is sharply higher than previous ones. For the project as planned before the Mayor’s March stop-work order, the total capital cost is now estimated at $252 million, up from $198 million projected in fall 2016. KPMG also studied a scenario where the CCC operates with lower peak frequency, reducing vehicle requirements, and found that the capital cost was not much lower, at $242 million. The city has not yet identified any funding source to cover the difference in the event that the project goes forward. The summary breaks down the increase into a few broad categories, but it is difficult to tell from the chosen categories how much of the increase is attributable to planning errors by the city and how much stems from the sharply more expensive construction environment that has also bedeviled Sound Transit and private projects throughout the area.
The sharply increased capital cost weakens the argument previously made by some CCC supporters that the cost of canceling the project is almost as high as the cost of building it. The report identifies the capital cost of a no-build option, including needed utility work and already-completed design and planning work, as $55 million. FTA has tentatively committed a further $75 million, which the city would most likely lose if the project weren’t built. The difference in expected capital spending between the no-build and build options is now $122 million, roughly twice as much as expected using previous estimates.
On the other hand, the summary is positive about nearly everything except capital cost projections. It paints a picture of the CCC as an operationally effective transit investment. In the kerfuffle between SDOT and Metro over operating cost projections, KPMG largely sided with SDOT, saying that SDOT estimates were consistent with similar systems nationally. KPMG also largely agreed with SDOT’s high ridership projections for the project, which streetcar critics have attacked for a variety of reasons. Finally, KPMG took pains to say that operational issues related to the increased length and weight of the vehicles purchased for the CCC are resolvable, although studying and resolving them explains a small part of the capital cost increase. Coverage of the CCC work stoppage ordered by the Mayor dwelled heavily on these issues, raising the specter of the CCC cars being multimillion-dollar white elephants; those worries seem overblown.
Increased capital cost, as any follower of Seattle transportation knows, has rarely sunk other types of projects. The Mayor’s heightened scrutiny of this project in particular is a bit puzzling. The cost of the unnecessarily pedestrian-hostile, car-centric Lander Street overpass increased from $140 million to $188 million during the planning stage, without any similar level of concern. Sound Transit is managing around nine-figure overruns on Federal Way Link and Lynnwood Link without any prospect of having to cancel those projects. The Highway 99 tunnel project has incurred nearly half a billion dollars of overruns to date, and will be opening to car traffic in a few weeks. Overruns are common on major projects, especially during economic booms, and are rarely sufficient to make a good project not worth building. One wonders how much of the increased scrutiny of this project comes from windshield perspective.
Shortly after releasing the summary, Mayor Durkan tweeted: “Moving forward, I am eager to hear from businesses and community members about this project.” Supporters and opponents alike should take her up on the offer by calling (206) 684-4000 (although, as of late Friday night, her office voice mailbox was full) or emailing her at email@example.com.