West Seattle-Ballard Link costs revised more than $4 billion higher

This potential station site in West Seattle was a strip mall when the ST3 plan estimates were being developed. (image: Sound Transit)

Sound Transit has revealed sharply higher capital cost estimates for several ST3 projects that are in development but not yet baselined (i.e. the Board has not yet selected the alternative to be built or finalized the cost and schedule estimates). The worst news is in Seattle. The West Seattle to Ballard Link extension (WSBLE) is now expected to come in at $12.1 to $12.6 billion for the preferred elevated alignments, $5.0 to $5.5 billion higher than projected in ST3 (all 2019 $). $4 billion of that cost increase has emerged in just the last year as the initial alternatives selected for the EIS have been fleshed out.

The news was delivered to the Sound Transit Executive Committee earlier today, and further detailed in a memo released after the meeting. Cumulatively, the cost estimate increases across all projects run to $7.9 billion in 2019 dollars. That would be about $12 billion in year-of-expenditure dollars on current project schedules, though those schedules will be inevitably extended.

If realized, such costs would make it very difficult for Sound Transit to complete Link extensions to both West Seattle and Ballard anywhere close to the ST3 timeframe, even if Seattle forgoes more expensive tunneling and other options that could add up to $1.7 billion more to the price tag (though the relative cost of below-ground vs above-ground shifts in favor of tunnels as above-ground land acquisition becomes more expensive).

Today's board discussion didn't propose any cancellations or major revisions, but there was talk of phasing options and scope reductions. A board workshop on January 21 will take up the ST3 realignment discussions with a decision on a new timeline expected this summer.

Some back of the envelope math illustrates the scale of the challenge. Sound Transit estimates suggested that the $6 billion or so shortfall in tax revenues, agency-wide, will mean average delays up to four years for all projects not currently underway. The WSBLE capital cost increment is almost as great, but in just one subarea with 30% of agency revenues. The delay to WSBLE would probably not be less than another decade.

There is bad news too for the Tacoma Dome Link extension (currently estimated capital of $3.3 billion vs the ST3 estimate of $2.4 billion), and for the OMF South ($1.2 to $2.4 billion vs an ST3 estimate of $650 million).

Some of the cost increases have been anticipated as the Lynnwood and Federal Way extensions confronted higher expenditures on right of way and construction bids. But the increased costs in Seattle have mostly emerged within the last year as staff have analyzed the alternatives selected by the Board for environmental analysis.

West Seattle / Ballard

More than $2 billion of the increased costs are in right- of-way and in construction costs. Right of way costs have grown along with increased property values along the corridor, and have been pushed yet higher by more expansive property acquisition requirements than the simple models used to develop ST3 had allowed for. In some places, recent development is adding to costs. For instance, a set of parcels near Alaska Junction are now being redeveloped, so that Sound Transit will have to purchase a 306-apartment building rather than the less valuable development on the site in 2015.

Construction costs have grown in several ways. Aerial guideways are likely to be wider and longer to reduce impacts on existing infrastructure. Costs for mined stations in downtown Seattle have grown, and there are scope expansions for pedestrian access and transfer facilities.

Cost estimates for Seattle projects grew gradually through 2019, and were revised dramatically higher in 2020 (slide: Sound Transit)Tacoma Dome Link Extension

Because the TDLE runs mostly in WSDOT right of way, property acquisition costs haven't grown so much. But there are more extensive stormwater collection needs with more underground storage vaults, and a three mile elevated section that was previously assumed would run at grade. The elevation is to avoid impacts to archaeological and cultural sites on tribal lands. Capital cost estimates have grown 10% in the last year, or 36% more than the ST3 forecast.

OMF South

The draft EIS is examining three potential sites. The scope has grown because this project was reconfigured to serve the entire light rail system. That means a larger site with more track and buildings. The worst case scenario revolves around the Midway Landfill superfund site. Nearby cities would prefer Sound Transit select this site so it can be remediated and also to avoid impacting a Dick's in Kent. However, the ground settlement and complex construction at the site make it far more costly, potentially adding $1.1 billion in costs vs the 2019 estimate, already far higher than the ST3 plan. Sound Transit would need to either remove the trash from the site or build more expensive structures over it.

In the low cost' scenario where the OMF is built in Federal Way, it would cost 80% more than projected in ST3. In the high cost' scenario where it is located at Midway, the cost approaches four times the original estimate.

Stride BRT

The Stride BRT projects are in comparatively great shape, benefiting from aggressive cost management that has trimmed costs already, and perhaps also from the more predictable environment of highway-running buses. I-405 BRT is expected to cost about $20 million less than the ST3 projection, while SR 522 BRT will go $63 million over. The Bothell bus base is also trending higher with a $47 million higher cost, but that base is now being sized to include some of the ST Express bus fleet in addition to the BRT vehicles, so it's necessarily larger.

Later projects

Extensions where project development have not begun have less precise cost estimates. For later projects such as Everett (where work has just started), or Issaquah Link, Sound Transit is anticipating another 36% or $2.7 billion in 2019 dollars if their costs trend higher in line with the estimates developed so far for the Tacoma Dome Link extension.

What went wrong?

The extraordinary pace of real estate and construction costs was difficult to anticipate. A crude conceptual plan will have significant errors. Scope creep is an ever-present challenge. Some are worthwhile, such as improved access at stations. Others, such as the lavish over-design Lake Forest Park is requiring for a parking structure, are simple waste.

But Sound Transit seems to also be wrestling with requirements that were systematically sized too low. The same model performed well in developing estimates for Northgate, East Link and Redmond Link extension projects, so it's not obvious if or how the model is biased. Simplistic conclusions about under-estimated costs are unwarranted. Sound Transit is now hiring an independent consultant for an expedited review ahead of this summer's ST3 realignment decision.

Protective acquisitions can reduce the risk of future property value increases, and have been successfully used in the Bothell bus base, for instance, though not quite in time to avoid some cost escalation. It's more difficult in Seattle where the multiplicity of alternatives the Board has put in play for West Seattle and Ballard make it difficult for Sound Transit to know where they should make acquisitions.

The realignment decisions have been made much harder by the higher cost estimates, but Board members will also want to understand if there is more bad news to be uncovered as projects are further developed.