Plans to finance redevelopment of Denver’s Union Station hit a bump Thursday when the Colorado Transportation Commission balked at allowing $16.8 million it had committed to transit projects at the station to be used instead as a “credit subsidy” to secure a $155 million federal loan.
Commissioner Steve Parker of Durango said many communities competed for state funding of strategic transit projects and he wants to assure that the “money is going for what it was intended.”
The Transportation Commission previously awarded the $16.8 million to Union Station with an expectation it would be used for designing commuter rail and bus facilities and other direct transit purposes.
“I’m a huge fan of what they’re trying to accomplish at Union Station,” Parker said. But he said that the state’s transit fund was designed to back capital projects, and the request to use the money as a credit subsidy was akin to using it to pay points on a loan.
Commission chairman Bill Kaufman of Loveland said he too supports the development of Union Station as a regional transit hub, but the state transportation panel needs more information before it considers diverting the $16.8 million.
“It’s a lot of money,” Kaufman said. “We didn’t quite understand all the implications.”
The Denver Union Station Project Authority is soliciting at least $324 million in federal loans to finance redevelopment of the station, which will be the hub of RTD’s expanded rail network once the $7 billion FasTracks project is built.
Development of the station will cost about $500 million, and while other sources of funding for the project have been identified in addition to potential federal loan proceeds, the state’s $16.8 million grant offers the most flexibility to help secure one of those loans, Colorado Department of Transportation deputy director Peggy Catlin said in a briefing to commissioners.
Union Station Project Authority officials say they need approval of the federal loans by the end of the year to keep station development on schedule.
At a project authority meeting Thursday, Alexander Brown, the group’s chief financial adviser, said federal officials expect to commit to the Union Station loans by November.
The Transportation Commission is expected to again take up the request to convert its transit grant to a loan credit subsidy at its September meeting.
