April 18, 2016
Word count: 670
The San Francisco city government received a loan of $100 million from the public agency controlling tolls at most of the Bay Area’s major bridges Wednesday, in hopes the city will finally be able to complete the replacement Transbay Terminal, which is more than 40% over budget and beset with controversy.
Bay Area Toll Authority commissioners, joined by Metropolitan Transportation Commission officers and representatives from City Hall argued for nearly an hour regarding the project’s lack of oversight, the terminal’s potential significance within the Bay Area, and the terms of the loan, which will be paid back at an “attractive” interest rate within ten years.
“This program is quite a while in coming,” said MTC Chief Financial Officer Brian Mayhew, who gave a presentation in favor of the deal, adding, “After many long hours, we’ve come to an arrangement that, I feel, will make everyone happy.”
Every year since breaking ground, The Transbay Project has suffered repeated cost increases and construction delays that have caused the project to exceed its original budget 4 times since 2010, bringing the current estimated cost to $2.4 billion, according to MTC Executive Director Steve Heminger. And that will only cover the first phase of the project.
The total project cost is currently estimated at $4.5 billion, according the project’s oversight committee, the Transbay Joint Powers Authority, made up of representatives from SF City Hall, Caltrans, and others.
Several BATA commissioners expressed concern that this loan will not be the last, given the project’s unpredictable expenses in the past.
“Where does it stop?” asked Commissioner Scott Haggerty of Alameda County, who described the decision as “not a very good deal at all” for the BATA. “Let me put it this way,” Haggerty challenged the loan by making this comparison: “We are currently a couple hundred million short in a new Raider’s Stadium, do you want to pay for that?”
“We are obviously here reluctantly,” responded San Francisco City Controller Ben Rosenfield, who attended the meeting on behalf of City Hall and the TJPA. Rosenfield reminded the committee, “Staff from our governments have been working on this for over a year…The city and county [of San Francisco] have never defaulted on this kind of deal, and we never will.”
To date, the MTC, which manages funding for transit and transportation all throughout the 9-county Bay Area, including BATA, the subgroup designated to distribute funds from the region’s state-owned toll bridges, has already invested more than $350 million to the project, and have been paying $3.6 million annually to maintain the temporary terminal, located on Main and Beale streets.
“This is a regional project,” pointed out Commissioner Scott Wiener of San Francisco, who said the Transbay Center will serve not only San Franciscans, but the entire Bay Area and West Coast.
Wiener expressed optimistic support for the loan, calling it a “bitter but necessary medicine” that the BATA must take in order to complete the “very influential” project. He then praised the City and County of San Francisco for “stepping up” and “risking their credit” to see this program through to the end.
In response to skepticism about the city’s ability to finish construction and pay back the loan on-time, Wiener added, “Looking forward, we have to look for ways to empower the TJPA…and learn any lessons that need to be learned.”
“This project makes our new building on Beale Street more valuable,” joked Commissioner Adrienne J. Tissier, as an awkward chuckle erupted throughout the room. She was referring to the MTC’s controversial decision to move its main office from 8th Street in Oakland to San Francisco’s SOMA district, a decision which has cost more than $150 million to date, and caused an uproar of media and public attention, according to MTC spokesman John Goodwin.
“That may be controversial for some, but I had to weigh in,” she remarked. The MTC is scheduled to begin holding meetings in the new Beale Street office by the end of May, and has chosen to sublease office space with several contractors, in order to offset the overwhelming cost.