South Shore projects added to Federal Transit Administration's funding recommendations list

Chicago Post-Tribune

The Federal Transit Administration put the South Shore Line's two major projects — the West Lake Corridor and Double Track NWI — in its annual list of funding recommendations, a significant step in moving those projects forward.

The list was released Tuesday.

But the FTA, in line with the Trump administration's priorities, is not asking Congress to fund those and other new projects on the Fiscal Year 2019 list. It is only recommending that Congress fund 10 projects that already have full funding grant agreements with the FTA

"Nothing was a surprise," Michael Noland, the South Shore Line's president and general manager, said of the FTA announcement. "The surprise would have been if this administration actually put money into new projects.

"The administration wants to zero out the (FTA capital grants) program; Congress doesn't."

U.S. Rep. Pete Visclosky, D-Gary, said he's working to see that Congress appropriates enough money for transit projects, including the South Shore's. He is a member of the House Appropriations Committee.

"I have been doing everything possible that when we complete our work, there is as much money as possible in that program," he said.

Despite Budget Director Mick Mulvaney's efforts to eliminate funding for transit projects, he said, Congress so far has put that money back into the spending plan.

"There is bipartisan agreement on money for transit, generally," Visclosky said. "It's diametrically opposed to the position this administration has taken."

The West Lake Corridor would be nine miles of new tracks, plus four stations, between Hammond and the Dyer-Munster border.

The FTA lists its capital cost at $661 million, plus $115.1 million for financing, for a total of $776.1 million. The South Shore previously gave a $665 million cost for the project, without financing costs.

Double Track would be a new set of rails between Gary and Michigan City, along with new stations in Gary's Miller area, Portage/Ogden Dunes and Michigan City. Its capital cost would be $321 million, plus $33.5 million for financing, for a $354.5 million total.

The South Shore previously estimated a $312 million cost for the Double Track project, not including financing.

Bill Hanna, the president and CEO of the Northwest Indiana Regional Development Authority, which has marshaled support for the South Shore's projects as economic boosts for Northwest Indiana, said the inclusion of financing cost in the total capital cost was not a surprise.

"We're still working with the same budget we put together," he said. "We factored in the cost of issuance of debt."

Noland said the South Shore could seek reimbursement for financing costs while the projects are under construction.

Hanna said the transit development districts that the RDA wants to develop around South Shore stations could provide some funding for the projects. The RDA and the cities and towns with stations would issue bonds to help pay for development in those districts, and the bonds would be repaid by the increase in property taxes there.

"That's one of the things that make our projects pretty unique," he said.

Noland said that if the FTA and Congress approve the projects, the FTA would pay half of the cost of financing as well as the projects' other costs.

Now much of the action switches to Congress, which would decide whether to provide money for the FTA's projects.

Members of Congress have indicated their willingness to fund capital projects for transit systems, Noland said.

But the first step now, he said, is for Congress to provide money for 2018 projects.

"We're really hopeful that Congress will fund the projects for Fiscal Year 2018, so they can get to the Fiscal Year 2019 projects," he said.

Visclosky said his goal is to get the FY 2018 budget appropriations approved in about a month.

The next federal fiscal year starts Oct. 1.

The FTA's list did not include ratings for the South Shore projects, which Noland had previously expected to get at least a "medium" rating.

Noland said FTA officials had told the South Shore that they didn't completely understand the funding process for the projects, particularly the Indiana Finance Authority's role in paying the money that the Indiana General Assembly promised.

South Shore and RDA officials plan to meet with FTA staff in Chicago to answer their questions.

He and Hanna said the ratings can be added later in the process; three other projects also didn't have ratings yet.

Gov. Eric Holcomb issued a statement on the decision.

"The South Shore double-tracking and West Lake projects are transformational for Northwest Indiana and the growth of a strong bi-state economy," Holcomb said. "We'll continue to work with NICTD and our federal partners to take these projects from the drawing board to construction."

The Double Track project was one of four applying for FTA "core capacity" project development grants, to expand an existing service.

The others are in San Francisco, Dallas, and Hudson County, N.J.

All are at least three times costlier than Double Track.

The West Lake project was one of nine looking for "new starts" project development grants.

The others range from Seattle to New York City.

West Lake is one of three smallest; it and St. Paul, Minn., are the only ones from the Midwest.