After announcing a delay in forming a key public-private partnership to help fund construction of its FasTracks rail expansion, RTD is now exploring whether $1 billion in PPP financing could be impacted by the state’s Taxpayer’s Bill of Rights.
The financing package might need to be altered to avert TABOR problems or, in an extreme case, metro Denver voters might be asked this November to approve a TABOR exemption to propel the financing, say officials close to negotiations between the Regional Transportation District and three teams of private companies that are bidding to become RTD’s PPP contractor.
On Tuesday, RTD General Manager Cal Marsella, who plans to leave the agency at the end of next month, cited three reasons for delaying the solicitation of detailed proposals from the three PPP teams:
* A lawsuit brought against a redevelopment plan for Union Station, which will be the hub of FasTracks and location of important rail systems work that will be performed by the PPP contractor.
* The failure of RTD to nail down a site for a $200 million commuter rail maintenance center, which the PPP will construct.
* The lack of a commitment from Congress to target $1 billion in federal money for key elements of FasTracks, including the train to Denver International Airport. That money is to be coupled with another $1 billion in private financing that the winning PPP team is expected to contribute.
Last week, RTD’s board backed off a plan to ask voters this fall for a tax increase to close a $2.2 billion FasTracks funding gap. That vote, which proponents see as key to getting the whole project built on time, is expected next year.
RTD board chairman Lee Kemp, who for months has been telling metro-area mayors that the PPP process had to stay on track, said that he did not know “how serious a delay” there would be in formation of the PPP.
“To me, they are stumbling blocks,” he said of the reasons cited by Marsella for delaying the public-private venture, which will build the $1.4 billion DIA train, the Gold Line train to Arvada-Wheat Ridge, the commuter rail maintenance facility and other projects.
FasTracks is the largest transit expansion in the country and RTD is depending on the partnership to finance, build and operate major portions of FasTracks infrastructure.
RTD and other FasTracks proponents are hoping that Congress will embed $1 billion for the FasTracks PPP in a new multi-year transportation funding measure that the Senate and House will consider this summer. The current law that guides federal transportation spending expires Sept. 30.
Scott Reed, RTD’s assistant general manager for public affairs, would not confirm that the transit agency’s bond attorney has responded to inquiries about PPP financing and TABOR.
But Reed said, “TABOR, like NEPA (the National Environmental Policy Act), gives wide-open access to challenges by people who would not otherwise have legal standing under other laws and regulations.”
The lawsuit brought by the Colorado Rail Passenger Association against the Union Station development plan in part says that the Federal Transit Administration violated NEPA requirements when it approved the plan last year.
Colorado Rail is fighting the Union Station makeover because it says the different transit modes — commuter rail, light rail and regional bus — do not all arrive at the station in the same location.
As an example, the plan calls for the light-rail platform to be placed about two blocks west of the commuter rail station — a four-minute walk.
“We advocate as supporters of intermodal connectivity,” said Colorado Rail President Ira Schreiber.
He welcomed RTD’s contention that his group’s lawsuit is partially responsible for delaying the PPP.
“The whole idea of the suit was to stop the clock from running, to stop them from doing anything,” Schreiber said.
FasTracks officials believe the lawsuit will be resolved in their favor, but say it could take six to 12 months to do so.
One of the reasons Marsella cited this week for delaying the PPP process might get earlier resolution.
RTD has been eyeing an Owens Corning roofing shingle factory at 52nd Avenue and Fox Street on the Denver-Adams County boundary for the commuter rail maintenance facility that will house and repair 100 rail cars used on four FasTracks lines.
RTD had said it might need the entire Owens Corning property, requiring a relocation of the manufacturer. The roofing company says it could cost at least $80 million to move its operation.
RTD would pay some of the cost of acquiring and relocating Owens Corning, but Sheree Bargabos, president of the Roofing and Asphalt unit at Owens Corning’s Toledo, Ohio headquarters, said if RTD were to acquire the property by eminent domain, it would likely leave the company with tens of millions of dollars in additional costs related to the relocation.
On Thursday, a possible compromise emerged in the standoff between RTD and Owens Corning when engineers for the transit agency said they are exploring a redesign of the rail maintenance center in a way that might spare the roofing shingle factory.
RTD needs a 60-foot-wide swath of the company’s storage yard for the movement of FasTracks commuter trains and Owens Corning officials said they can tolerate that loss of their property, but not the manufacturing structure itself.
Greg Straight, an RTD engineer and manager on the rail maintenance center project, said the transit agency is conducting a new review to see whether it can avoid acquiring the Owens Corning factory.
“We’re doing everything we can to bring this back and mitigate the impact,” he said.
Jeffrey Leib: 303-954-1645 or jleib@denverpost.com
