Durham-Orange light-rail 'in rare company,' planner says. But $57M gap remains.

Elected officials learned more Thursday about the financial challenges facing the Durham-Orange light-rail project, but also about the benefits it could deliver.

Scott Polikov, a consultant and founder of Gateway Planning, sought to reassure Durham and Orange county commissioners about the federal funding prospects. The planning for walkable light-rail station development and maximum community benefits already is paid with a $2.1 million Federal Transit Administration grant, he said.

“Doesn’t it say something that this FTA grant [for station development] was awarded under a prior administration, and you all moved into final engineering under this administration?” Polikov said. “You’re in rare company. You’ve been basically endorsed by both recent presidential administrations and the FTA. That’s a big deal.”

Thursday’s meeting came as GoTriangle and the Durham and Orange county commissioners await Gov. Roy Cooper’s signature on a state “technical corrections” bill, which will change the language of a state budget bill passed earlier this month.

The budget bill required the project to have federal funding before it could get state funds, although federal rules require the project first to have state funding. The Catch-22 risked ending the light rail project, which is now in the final engineering phase.

The 17.7-mile line would cost $2.47 billion to build and connect UNC Hospitals in Chapel Hill with Duke and N.C. Central universities in Durham. Another $890 million in local money would pay the interest on debt.

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While the technical corrections bill lets the project continue, it also limits state funding to $190 million, instead of the anticipated $247 million. It also requires local partners to show they have roughly $1 billion in local and private money by April 2019 and $1.24 billion in federal money by November 2019.

Funding gap

The FTA grant application could be submitted by the end of the year, GoTriangle General Manager Jeff Mann said, with a decision by September 2019.

Until then, it’s important to keep going, Mann said, and for the boards to figure out how to fill the roughly $57 million gap in state funding. The commissioners are expected to meet in July and need a financial plan by August, he said.

“We are looking at a range of options to fill that gap through cost-cutting or value engineering, or raising additional funds,” Mann said. “We want to work very closely with Orange County and Durham County to evaluate what those options are and bring you potential solutions to plug that funding gap.”

At this time, Mann said, GoTriangle is spending roughly $4.8 million a month on project engineering. That puts the project on track to spend roughly $97 million by the end of June, including the $33 million spent on its first, environmental phase.

If the light-rail project falls apart, Mann said, the partners would draft new transit plans. They could get out of consultant contracts, which total $114.8 million, but would have to pay for any work already completed.

Station planning

The commissioners spent the bulk of their meeting learning more about the light-rail station planning and economics, particularly at the future Gateway and Patterson Place stations, which hug both sides of Interstate 40 and the Chapel Hill-Durham border.

Data shows that drivers spend an extra minute each year traveling the U.S. 15-501 corridor between Chapel Hill and Durham, said Patrick McDonough, GoTriangle’s manager of planning and transit-oriented development. That also affects bus routes, making the commute longer and more expensive for taxpayers, he said.

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Light rail would be part of a wide-ranging transit network that gives people multiple ways to cross the Triangle, he said. It will be especially important as jobs along the light-rail corridor grow from roughly 106,000 today to 150,000 in 20 years, he added.

Polikov noted that a successful transit-oriented station development would spur a dense, compact, pedestrian friendly mix of residential and commercial uses, with limited but managed parking lot and decks. Rail just gives more people access, he said.

Gateway-Patterson Place Map 2018.jpg
A draft concept shows a potential layout for the Gateway (at left) and Patterson Place light-rail stations along I-40 and the Durham-Chapel Hill border. UNC Health Care's Eastowne Office Park, which is about to be redeveloped, is expected to have a connection across the highway. Patrick McDonough/GoTriangle Contributed

It also is possible for stations to have new and existing affordable housing, added Brandon Palanker, with Gateway Planning, but it will take cooperation, clear development processes, and public and private partnerships.

Polikov directed the commissioners’ attention to a draft plan for Gateway Station, pointing out the 10- to 15-story buildings at the core, four- and five-story residential and mixed-use buildings farther back from the highway, and townhomes closer to Old Durham Road.

“It’s not just putting uses together,” he said. “It’s also relating them in a way that when you walk out the front door of any of the buildings, you feel like you want to walk around, you feel like you want to hang out, you feel like you’re part of the neighborhood as a whole.”

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That’s also what drives the economics of the light-rail stations, he said.

Estimates show the Gateway and Patterson Place stations could generate over $3 billion in investments and $44.6 million a year in property tax revenues for Orange and Durham counties, Polikov said. That would support a broader tax base, new jobs and more opportunities for residents, he said.

Those stations also will bring benefits to the existing neighborhoods, whether it’s entertainment or jobs, Durham County Commissioners Chairwoman Wendy Jacobs added. It's good for Durham and Orange counties to talk about the Gateway Station, because it’s “the single-most important site in terms of the new economic development impact,” she said.

“Our region’s projected to have a million more people,” Jacobs added. “We have to make decisions about where are we going to put these people to protect the quality of life we want, how are we going to connect people to jobs. I’m excited for us to do that work together.”

Tammy Grubb: 919-829-8926; @TammyGrubb