First Cost Overruns, Delays for Lynnwood Link

Costs are rising for Lynnwood Link, due to both economic conditions and increasing scope. Sound Transit is choosing to delay its delivery by six months in an effort to limit those increases.

Until today's board meeting, the plan for the line between Northgate and Lynnwood Transit Center cost $2.4 billion, including vehicles and part of the maintenance facility, and completed in December 2023. The $2.4 billion estimate was consistent with the initial, pre-ST2 cost estimate in 2005.

Several factors have inflated the cost to $2.9 billion, or by 21%:

• The construction boom has increased the bids from contractors, and created skilled labor shortages, increasing estimates for construction costs by $190m.
• A decision to use a single contractor rather splitting up design and build added $120m to up-front costs. This decision reduces risk and the necessary contingency funds. Indeed, this increase is basically offset by design and contingency funds coming in $113m under budget.
• Increases in scope have added $190m. These include better bus transfer facilities; evolving codes and regulations in partner cities; tree replacement ($32m!); and temporary noise walls, traffic control, and parking to minimize construction disruption. While some of these things are good, they reflect the general tendency of cities to extract concessions in exchange for permits.
• Right of way acquisition has increased by $101m, due to high real estate values. Values increased by 44% since 2014, well in excess of the expected 25%.

With new money from ST3, there's no reasonable change in ST2 costs or revenues that can affect the schedule. However, ST CEO Peter Rogoff has ordered a six-month pause to value-engineer the line and recover some of the cost increases. This places the line's opening in mid-2024. This delay will also allow chaos around federal funding to settle before signing contracts backed by those grants.

Risks remain: federal funding is uncertain, the construction market is still hot, and cities and agencies haven't given final approval. The project is at 60% design.

Most other light rail projects are either done with design and construction bid considerations (Northgate, East Link) or way too early to worry about these questions (most of ST3). Exceptions include the Federal Way and Downtown Redmond extensions, funded in ST3 and scheduled for delivery at roughly the same time as Lynnwood Link. There is no news for these projects, but I wouldn't be shocked to hear some when new estimates come out.