Gov. Larry Hogan would not discuss Thursday the amount of additional funding he was seeking from Montgomery and Prince George’s counties to move ahead on the Purple Line project. And Montgomery County Executive Ike Leggett did not directly address the issue in a statement immediately afterward. But it appears it could cost each county at least another $50 million to convince Hogan to proceed.
“We’ve been able to reduce…costs [more than] $200 million in our estimation, and, with the larger share from the counties, we are looking at a reduction to the state here of well in excess of $300 million,” Maryland Transportation Secretary Pete Rahn told reporters at Thursday’s press conference.
Rahn’s comments appeared consistent with discussions this spring between the state officials and representatives of the two counties—during which the state indicated it was looking for $100 million more combined from Montgomery and Prince George’s counties, according to sources.
“As Prince George’s and Montgomery counties have the most to gain from the Purple Line, we have asked those counties to increase their investments in this project,” Hogan said Thursday.
Previously, each county had been asked to contribute about $120 million to defray the total cost of the project, which was estimated at $2.45 billion pending reductions from the cost savings that Rahn said the state has found.
In the case of Montgomery, that $120 million includes about $60 million the county has committed to building a second entrance to the Bethesda Metro station, which will also connect to the Bethesda Purple Line stop.
In addition to the $120 million contribution to which Montgomery has already committed, the county also has agreed to pay another nearly $100 million to construct the Capital Crescent Trail along a nearly four-mile stretch of the Purple Line from Bethesda to Silver Spring.
Hogan’s announcement did leave some questions unanswered about the state’s share of the project, which Hogan and Rahn now estimate at $168 million. Hogan boasted that this was “a fraction of the original proposal, where it would have cost the state close to $700 million.”
But Hogan’s math was questioned by Rep. John Delaney, D-Potomac. “While I’m encouraged that the governor indicated some support for the Purple Line, I’m uncertain as to how it can be successfully reformulated with materially less state funds and worry that such an effort may effectively terminate the project,” Delaney said in a press release.
Delaney, regarded as a potential Democratic gubernatorial candidate in 2018, added: “The governor indicated that he looks at data when he makes these decisions—which I applaud—and I ask him to share his analytics behind how the Purple Line can be built with significantly less state funding. The stakeholders in this project deserve to see a detailed plan as to how this will be structured from a financial perspective, including effects on federal grants, expected contributions from the counties, and additional on-going costs associated with shifting construction funding to private partners if that is envisioned.”
Actually, the $700 million cited by Hogan as the original state share of the project was at the high end of $300 million to $700 million estimated by the Maryland Transit Administration prior to Hogan assuming office in January.
In part, this variance was due to uncertainty about how much a private partner building and operating the Purple Line would offer in terms of financing. At the time, estimates of the private financing ranged from $500 million to $900 million, pending receipt of bids. The private partner chosen to construct the line will be able to borrow its share of the financing from a subsidized federal loan fund, with the loan being repaid through annual “availability payments”—funded primarily by state tax revenues.
The remaining pot of money for the project is $900 million now set aside by the federal government. In addition to the increased contribution from the two counties, Hogan listed finalizing of the federal contribution, which could happen later this year, as a second condition for the project going forward.
With Hogan now giving the project at least a tentative green light, Rahn said that bids from four different consortiums of private companies would likely be scheduled for receipt in the next 120 to 150 days. This means bids could be received and opened sometime between late October and late November.
“We will be counting on our partners in the private sector to deliver proposals that meet our new vision for the project,” Hogan declared, citing his third and last condition for moving ahead.
The original date for bids had been last January. That deadline was pushed back a couple of times after Hogan, who campaigned for governor questioning the high cost of the Purple Line, ordered a reevaluation of the 16-mile, 21-station project a day after being sworn into office.
The latest schedule would allow construction of the line to begin sometime in 2016, nearly a year behind the summer 2015 start of construction projected shortly before Hogan assumed office. Rahn expressed hope that the winning bidder could expedite construction of the line, allowing it to begin operations not long after the original target date of December 2020.
According to sources, more than $190 million was expended toward work on the Purple Line before Hogan ordered the reevaluation of the project in January, with about $30 million of this federal money and the remaining $160 million coming from state funds.
A spokeswoman for the Maryland Department of Transportation did not immediately return phone calls seeking a breakdown of the $168 million that Hogan and Rahn now cite as the state share of the project. But it appears the $160 million in already expended funds is on top of the $168 million figure, meaning that the state is now on the hook for close to $330 million of the project’s cost. Additional contributions from Montgomery and Prince George’s counties could presumably defray a portion of that total.
In addition, Rahn said the state also had realized cost savings by reducing so-called headway on the Purple Line, meaning trains will run every 7.5 minutes rather than every 6 minutes as originally proposed. He said this would reduce the need to buy additional train cars “which we project we’re not going to need for 12 to 15 years,” and allow delaying construction of a second staging area to store the cars.
Rahn did say there would be no change in alignment of the Bethesda-to-New Carrollton route or the number of stations, but added, “We’ve reduced a number of items out of this that, frankly, were producing a Cadillac project and not a Chevy project.”
He did not elaborate on these items during the press conference, but sources said state officials originally sought to replace a Purple Line bridge over Connecticut Avenue with a street level crossing. County officials protested that this would exacerbate an already difficult traffic situation not far north of the intersection of Connecticut Avenue and East-West Highway, and the idea was dropped.
