BART San Jose extension could cost up to $9.1 billion
Federal officials expect BART’S four-station extension into downtown San Jose could cost as much as $9.1 billion, or about $4.4 billion more than the initial price tag. Local transit officials said they don’t think it will be that much, however.
The new estimate was revealed Oct. 25 in the Federal Transit Administration’s announcement that it was funneling $2.3 billion of federal transit funds into the extension, or a quarter of the final project cost, whichever is less.
Officials from the Valley Transportation Authority, which is building the extension that BART will operate, acknowledged Monday there “may be cost increases from preliminary estimates” but they did not provide any specific figures or address the federal estimate in their news release.
When VTA first applied for a federal grant in 2020, it requested $1.7 billion, or 25% of the agency’s latest total project cost estimate of $6.9 billion.
But the Federal Transit Administration indicated it’s kicking in substantially more because it believes the VTA was underestimating the total cost of the 6-mile extension from East San Jose to Santa Clara.
In reaching its $9.148 billion cost estimate, federal officials accounted for “additional risk and contingencies” such as potential labor and supply cost increases, said VTA spokesperson Bernice Alaniz.
“$9.1 billion is certainly something that we’re not planning to achieve,” she said. “We’re going to work to keep the budget as close to where our budget and plan is right now. … We will look at everything we can control to reduce risk and bring down that contingency.”
Under an agreement with the Federal Transit Administration, the VTA now has up to two years to issue contract bids and pin down a final price tag and funding plan for the project.
Instead of choosing the most conventional tunneling method, which is referred to as dual-bore and would require tearing up sections of Santa Clara Street for years, VTA opted for a new subway building technique pioneered in Spain aimed at minimizing disruptions at ground level by tunneling deeper underground — a decision celebrated by businesses and their advocates. Under this method, the VTA will construct a giant single tunnel 48 feet wide that will accommodate two trains.
In selling the single-bore design to the public in 2018, VTA officials vowed that it would be a cheaper and quicker option than using the typical dual-bore method.
This tunneling method will also require platforms to be built farther underground, forcing riders to take more escalators and spend longer time traveling from the station platform to the street level.
The project, which will be partly funded by two sales tax measures that county voters approved, has seen its estimated cost climb and completion date pushed back over the years.
Just three years ago, the VTA estimated the project would cost a total of $4.7 billion and be completed by 2026. The completion date is now 2030.
In light of the latest cost projection, federal transit officials are urging the VTA, BART and their boards of directors to reevaluate their plans and what is in the best interest of riders, saying that sticking with this method could increase capital costs and decrease riders’ experience.
“It’s a very risky construction type, and that risk usually equates to cost on these types of projects,” said Laura Tolkoff of the policy think tank SPUR. “If we’re not careful with our design choices and our construction choices, we could end up with projects that cost more and more and revenue that gets smaller and smaller, which is not a great investment strategy.”
Bob Allen of Urban Habitat said this project seems to be following the trend of Bay Area transit agencies pouring too much money into large, capital infrastructure projects and then struggling to provide adequate service levels for riders when they’re finished.
“There’s an opportunity cost when we make a mistake and when we kind of double down because we’re in this path-dependent mode,” he said. “All the decision-makers involved in this have an obligation to show us what they will do to get the cost within the proper $7 billion funding envelope and how they can do all this with not just getting VTA back to pre-pandemic levels but really growing VTA service.”
The VTA has known about the federal government’s $9.1 billion cost estimate for more than a month, but Alaniz said it did not want to comment until now because the figure was under a mandatory 30-day review period. VTA and BART officials did not mention the federal agency’s cost estimate during multiple board meetings held in recent weeks.
Allen said that was a missed opportunity to begin “an honest conversation” about what needs to be done to stop the ballooning price tag.
Federal officials have already allocated $225 million of the anticipated $2.3 billion to the VTA, and the agency has no plans to change the tunneling method chosen, according to Alaniz.
So far, the VTA only has produced a funding plan for a BART expansion that would cost $6.9 billion. It is unclear how the agency would cover a 32% increase in the final price tag.
The VTA has already gone to voters twice — in 2000 and again in 2016 — with sales tax measures that together will fund about $4 billion of the BART expansion project.
When asked whether the agency would go to voters again, Alaniz said it’s too early to comment on that.
Gwen Litvak of the Bay Area Council said the VTA has the opportunity to break a cycle in the Bay Area of projects coming in way above budget and far behind schedule.
But time is of the essence. “VTA needs to be taking a strong look at the federal government’s estimate and figuring out what decisions have led to this and how to address it moving forward,” she said. “The fact that we expect there will always be more money from the voters or from the federal government is just not true.”