$130 million later, prospects look bad for Durham/Orange rail

How did Durham and Orange county taxpayers spend $130 million on a light rail project that may never be built?

Planning. Engineering. Consultants. Federal rules.

GoTriangle has signed dozens of contracts and amendments with engineering firms, researchers and even one golf course designer since planning began for a 17.7-mile line connecting Durham and Chapel Hill. Things hit the skids last week when it became clear Duke University wouldn't give up a crucial piece of land.

It's unclear whether the project can recover. Even if Duke signs off, or is forced by the government to give up its land, there is an unknown gap between the money planners have and the money they need.

An agreement is also still needed with the N.C. Railroad Company. State and federal deadlines loom.

The $130 million spent so far came from half-cent sales taxes that Durham and Orange county voters approved starting eight years ago. None of the money went to equipment or construction. The only land purchase was $5.3 million for a rail operations and maintenance facility, and that is the subject of a lawsuit.

The rest of the money has gone largely toward design and engineering, which is not complete. Federal rules, to get the $1.23 billion in federal funding project planners want, require local outlays up front for design work, Interim Project Director John Tallmadge said Friday. If approved, half that money can be reimbursed.

Design work in Seattle, for an 8.5 mile light rail extension, ran almost $200 million, according to a project spokesman there. That's not a full apples-to-apples comparison, in part because some of that spending came after federal approvals the Durham/Orange line doesn't have.

The money spent so far falls largely into a number of categories:

The biggest contract: $75 million, after multiple amendments, to HDR Engineering, which has been handling design work.

The second biggest: A $39.4 million deal with AECOM, which was called URS when it first signed on in 2010, to provide "program management consulting services" and push forward planning, research, design, engineering, construction and other elements of the plan.

Spokespeople for HDR and AECOM didn't respond to WRAL News messages seeking comment Friday.

Very little about the project is set in stone. Duke's announcement last week was widely seen as a huge blow, but the project's director said Friday that his team is working as if construction will start as planned next year.

"Obviously, it is up to GoTriangle's Board of Trustees about how to proceed," Tallmadge said Friday.

The board meets this week, and Tallmadge said members will also consult elected leaders in Durham and Orange counties.

GoTriangle staff said they couldn't provide a total expected cost for the line Friday, saying they'd recently gotten new data from the Federal Transit Administration and were going through it. Among other things, a tunnel in downtown Durham has been added since a September estimate put design and construction at nearly $2.5 billion, not including debt service or operating costs.

"We will be able to put a number on it," Tallmadge said Friday. "We're just working through the process right now."

That makes it difficult to ascertain how far the project is from full funding. GoTriangle spokesman Mike Charbonneau said last week that the Federal Transit Administration told the group to add $237 million because of design changes, but he said Friday that doesn't capture the full cost changes staff are working to assess.

With low interest rates, it's possible some costs could come down. But the FTA also has a new rule requiring projects to potentially cover an extra 10 percent of total project costs. That's to avoid abandoning projects in the face of overruns after the federal money is put in.

The plan has been to use a combination of state, federal and local tax dollars to finance the bulk of construction and to raise about $102.5 million from private or other sources. But that goal was set in December 2017, and a large hoped-for donation "really stalled" in recent months, delaying private fundraising, Tallmadge said Friday.

A finance team presentation from early January indicated the project had just $15 million of private money in place, all from land donations along the line from UNC Hospitals and N.C. Central University.

The state legislature last year set an April 30, 2019, deadline to have the private money secured if state taxpayers are to kick in their promised $190 million.