Downtown LA streetcar could face delays if additional funding isn't secured

The streetcar planned for downtown L.A. may be facing budget shortfalls after new estimates were reported last week.
The streetcar planned for downtown L.A. may be facing budget shortfalls after new estimates were reported last week.
Los Angeles Streetcar Inc

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A plan to restore streetcar service to downtown Los Angeles could cost millions of dollars more than anticipated, so city officials and streetcar advocates are working to cut costs and cobble together additional funds.

It will be no small feat to secure enough money to realize the plan. James Lefton, executive officer for transit services at the Los Angeles Department of Transportation (LADOT), said current budgets show the streetcar faces an $86 to $181 million shortfall.

According to reports presented to the L.A. City Council last week, new project estimates ballooned because they include utility relocation and updated construction costs. The initial  $125 million estimate was based on a "cursory" look at the process and didn't factor in all of the engineering challenges.

“The original estimates did not have any information on utilities in the ground so they really weren’t able to come up with a very accurate or reasonable estimate of utility cost," said Lefton.

Utility relocation, like moving underground water pipes and electrical lines to make way for the streetcar, will likely carry a high price tag,  So the City has hired a “utility expert” to figure out alternatives to those costly relocations.

Some underground obstacles could be side-stepped through innovative engineering -- like slightly adjusting the streetcar’s route.  Efforts like water pipe relocation could be a cost shouldered by a different agency. According to a statement from area councilman José Huizar's office, the latest figures indicate that the streetcar project would be "bearing the full cost for relocation of 100 percent of all potential conflicts."  These obstacles include an old water system that dates back to the 1890s and in Huizar's view "should be replaced as a matter of course."

But other building costs will be harder to shave down. The price of construction will likely rise between now and when the streetcar project actually begins to take shape.

Still, streetcar advocates say all these newly-added utility costs really represent the “worst-case scenario.” Shiraz Tangri of L.A. Streetcar, Inc. said there needs to me more analysis.

"That’s really the effort right now is to get a real handle on what those costs are before we start saying we have an 'x-million dollar gap' that we need to fill," said Tangri.

A Federal Transportation Administration grant could provide up to $75 million of the streetcar's budget, but in order to get that grant officials must have the rest of the funding in place.  Last year, downtown L.A. residents in proximity of the streetcar route, voted in favor of a parcel tax that would fund a portion of the design, engineering and construction costs.  This contribution from property owners is expected to bring another $62.5 million to the project.

But even with these contributions, there is still a significant gap in funding. City officials and Streetcar Inc. are looking into a number of ways to supplement the project’s budget, including additional federal and state grants and a possible public/private partnership.

“To the extent that we can’t come up with a funding plan to get rid of the shortfall, we can’t be considered by FTA for grant funding which could potentially impact the schedule for the streetcar, yes,” said Lefton.

Original projections stated that construction could begin on the streetcar as early as 2014, and proponents hoped to have it open for riders by 2016.

Despite the costs, streetcar advocates continue to tout the project's financial benefits for downtown L.A.   The planned route winds down major streets including Broadway and Figueroa and hits multiple tourist attractions from L.A. Live to the Walt Disney Concert Hall. Advocates have said the streetcar will attract millions of dollars in tourism and consumer spending.

“Studies have shown that the Downtown Los Angeles Streetcar is going to bring more than $1 billion in economic development in and around the line, create more than 9,000 jobs and be at the top of the list for ridership when compared to light-rail lines in the City and other streetcars throughout the nation,” said Huizar in a statement.

Streetcar supporters also said that the new transit line would be convenient for Downtown residents, making it easier to get to different neighborhoods and provide yet another alternative to driving.

Tangri said that over the next six months to a year, L.A. Streetcar Inc. along with multiple City agencies will be reviewing and refining the streetcar's budget and project plans. He expects the current utility cost estimates will be significantly reduced throughout the process.