How Governor Hogan Slimmed Down The Budget For The Purple Line

Maryland Gov. Larry Hogan has touted his Purple Line cost-cutting as a victory for taxpayers. On March 2 the state hired a private-sector team, Purple Line Transit Partners, led by the firm Fluor Enterprises, to build the light rail system at a construction cost of $1.9 billion, about a half-billion less than earlier estimates.

The administration estimated its new total costs would reach $3.3 billion after six years of construction and 30 years of passenger service, with the majority of the funds paid in annual installments to the company that operates the light rail system.

The deal led the Maryland transportation secretary Pete Rahn to defend the decision to put the project on hold last year to negotiate a lower price with the private contractor teams competing for the bid.

“Absolutely this was worth the time that we took in which we are saving $550 million for the taxpayers in delivering an excellent project for the Washington area,” Rahn said.

What was lost in the savings?

The largest single cost-saver in Hogan’s slimmed-down Purple Line can be found in Silver Spring. That is where the Purple Line was supposed to arrive in an elevated structure between Metro’s Red Line station and the Silver Spring Transit Center, a new bus hub.

Under the new design, the Purple Line stop will be built on the opposite side of the transit center, saving $30 million. Advocates who once feared the governor might cancel the Purple Line altogether are willing to accept the changes.

“It’s possibly a bit of wash,” said Greg Sanders of the group PurpleLineNow!

“It saves about $30 million. There’s a longer transfer, but if you have been to New York, let alone Tokyo, there’s any number of places in both systems where you have a longer walk between transfer stations than here.”

Also among the money-saving decisions, the railcar supplier CAF, a Spanish firm, will build single-car trains at a reduced length of 136 feet instead of two-car trains. And because of the earlier decision to lengthen the headways (intervals between trains) from six to seven-and-a-half minutes, fewer railcars will be needed when the Purple Line in expected to open in 2022.

“This was something the private concessionaire proposed” Sanders said. “A lot of the savings are things lay people wouldn’t necessarily see, but the concessionaire has the option of putting through. That is the kind of deal where we are getting the benefits of private enterprise for a public purpose.”

The Maryland Department of Transportation also touted other “new elements” of the Purple Line contract: significant reduction in the number of traction power substations, new entrance into Glenridge Shopping Center from Veterans Parkway, and reuse of site-excavated materials.

“If we get the line built, if we get construction started this year, and we get these communities connected and people moving, I am entirely willing to make this sort of compromise,” said Sanders.

Fewer stations = smaller price tag?

The Hogan administration did not consider eliminating some of the 21 stations along the 16-mile route running east-west between Bethesda and New Carrollton. Cutting stations could have reduced construction costs and, by speeding up operations, would have required purchasing fewer railcars to maintain the headways.

Ten of the stations are forecast to serve no more than 2,000 passengers per day even 25 years out, according to theproject’s final environmental impact statement. Two stops have ridership projected below 1,000 per day. For instance, the Dale Drive stop is listed at 960 boardings in 2040. By comparison, the Bethesda station is expected to serve 14,990 passengers per day.

The stations were estimated to cost $109 million, or 10 percent of the construction cost, according to a 2013 technical report. So cutting a few could have trimmed several million dollars of the Purple Line’s price tag.

Why build a light ridership station at all? The answer, according to land use experts, is the development potential around the station. The federally approved ridership estimates are based on each locality’s current zoning rules, not on potential future changes to allow mixed-use development of residential, office, and retail space.

“The important thing to keep in mind is we don’t build transportation to move people. That is not the goal. The goal is economic development. The means is by moving people,” said Chris Leinberger, a real estate expert at The George Washington University.

For instance, the stop in the Chevy Chase Lake area is forecast at about 2,200 daily passengers by 2040. But Montgomery County has approved big plans for the area, including condos, rental apartments, and office high-rises near the station.

“They have a lot of potential to build out more development that will increase the ridership,” Leinberger said.

That is why transit advocates have gotten behind the project, whose total estimated ridership is listed at about 70,000 by 2040.

“The Purple Line is perhaps the most significant economic investment that Maryland can make in the suburbs of Washington, D.C.,” said Stewart Schwartz, the executive director of the Coalition for Smarter Growth.

“It’s really important to think of this investment in the context of where the market is going now. The demand to live in urban, walkable, and transit-accessible areas is booming and there is no end in sight.”

It is also important to remember that ridership estimates are often wrong, according to transportation policy experts. It is more art than science, said Joshua Schank, the former head of the Eno Center for Transportation who is now the chief innovation office at the Los Angeles Metro.

“It’s very difficult to predict any number of things that can happen: economic downturns, changes in gas prices, where the development is going to be. There are so many variables…The mistake is we think whatever the ridership number is, that is what it actually is going to be. It’s just a guide,” said Schank.

Two recent studies of new transit projects, cited by the Washington Post, actual ridership often falls short or even exceeds the initial estimates.

A Federal Transit Administration study in 2008 found that estimates improved, but that “only half of 18 recently built U.S. transit projects had reached their projections or stood a “good chance” of getting close,” the Post reported.

A Maryland Transit Administration study examined seven light rail systems that opened in the past decade. They “averaged 8 percent higher ridership than predicted.”

But individual systems produced figures far from the average. Three projects’ “riderships were as much as 45 percent below forecasts while four exceeded projections — one by as much as 79 percent,” according to the Post’s report.

The Purple Line’s ridership estimates also have grown over successive gubernatorial administrations, with the O’Malley administration coming to the highest figure of about 70,000 boardings per day.

High ridership forecasts are necessary to win federal grant dollars. The Purple Line was approved for $900 million under the FTA’s New Starts program.

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