The expensive and controversial BART extension to Silicon Valley through San José Diridon Station won’t be carrying passengers until 2036, and will cost nearly $3 billion more than last year’s estimate.
The Santa Clara Valley Transportation Authority now says the anticipated cost of the final phase of the BART-to-Silicon Valley completion will grow to $12.2 billion, a 31% increase over the previous projection of $9.3 billion.
The VTA staff cited “the rapidly rising cost of construction materials and labor prices, along with the impacts of inflation” as the culprits, even as overall inflation numbers have declined to nearly “normal” 3% annual levels.
Nonetheless, VTA management reaffirmed its confidence that despite the higher estimates, the agency still will be able to fund the project, and anticipates the extension will boost ridership that is still recovering from the COVID pandemic.
“All major U.S. infrastructure projects are, unfortunately, impacted by extreme inflationary costs,” said Carolyn Gonot, VTA General Manager/CEO. “The good news is that the strong fiscal position of VTA and other funding sources provide a funding plan that can absorb the increase.”
The BART extension represents the largest single public infrastructure project ever constructed in Santa Clara County. It will extend BART service six miles from the Berryessa Transit Center into downtown San José and ending in the City of Santa Clara. The first $2.3 billion phase extended BART service from Alameda County into Santa Clara County, with stops at Milpitas and Berryessa/North San José, beginning in June 2020.
VTA said it is seeking a grant from the Federal Transit Administration New Starts Program to complete the project’s funding plan.
The BART extension has various funding sources at the state, regional and local levels that include the Transit and Intercity Rail Capital Program, Regional Measure 3, 2000 Measure A, and 2016 Measure B.
“New cost estimates for the BART extension fall squarely in line with what we are seeing across the nation. Cost factors including material prices, labor shortages and rising interest rates are being felt across all infrastructure sectors, not just transit and transportation projects. Market conditions continue to be challenging and dynamic,” said Peter Rogoff, former U.S. Department of Transportation under secretary, now a subject-matter expert in transportation infrastructure. Rogoff will make a presentation on these national trends at Thursday’s VTA board of directors meeting.
VTA built the first phase of the extension over $100 million under budget from Fremont to North San José’s Berryessa neighborhood. Work is already underway on the final phase, which extends the line six more miles with four more stations through downtown San José into Santa Clara.
Gonot said the new estimated completion date was adjusted from 2033 to 2036 based on updated engineering and risk assessments.
The VTA Board of Directors will receive an update on the new cost and schedule forecast and financial plan at its board meeting this week.
“We are doing everything possible as responsible stewards of taxpayer monies to maintain costs at every stage. We will continue to do so in the face of inflationary pressures and hikes in interest rates,” Gonot added.
Although project costs are increasing, the anticipated local sales tax revenues of 2000 Measure A and 2016 Measure B are also increasing when compared to previous projections. The operation and maintenance element of the project is also seeing a benefit with increased 2008 Measure B tax estimates.
VTA officials pledged that funding for the completion of BART to Silicon Valley will not take away from other planned VTA projects. VTA has projected a 10-year balanced budget for the agency without sacrificing service and is in a strong and healthy position to manage inflationary impacts, she added.
The project aims to reduce traffic congestion, decrease climate change impacts, provide equitable transportation and create the transportation system necessary to address increased population growth. Transportation planners said the BART extension will foster transit-oriented development, including new market value and affordable housing. It will also realize the decades-long vision of “Ringing the Bay” with rail transit by enhancing connections with the various other transit systems serving the Bay Area.
When complete, the extension will include three underground stations (28th Street /Little Portugal, Downtown San José and Diridon) and one above ground station (Santa Clara).
The four new BART stations are projected to have approximately an average weekday ridership of 54,000 by 2040, which represents 6.9% of total anticipated BART ridership. Projected ridership at the Downtown San José station alone is 27,900. The Metropolitan Transportation Commission Plan Bay Area 2040 long range plan identifies the extension of BART service to San José and Santa Clara as its top public transportation priority.
