Midtown Raleigh News

Raleigh train hub loses $15.1M to Charlotte rail line

The Dillon Supply Viaduct building, located the end of Martin Street, will be the site for the Raleigh's new Union Station, according to the latest plans by DOT.
The Dillon Supply Viaduct building, located the end of Martin Street, will be the site for the Raleigh's new Union Station, according to the latest plans by DOT. 2013 NEWS & OBSERVER FILE PHOTO

A Grand Central Station-style train hub planned for downtown Raleigh has lost about a quarter of its $60 million in announced funding and will have to find more money or settle for a scaled-back project, city and state officials said.

Last September, the nation’s top railroad official came to town to trumpet $22.3 million in federal funds – an amount that would fully fund the station project. His announcement was premature.

About $15.1 million of that federal contribution will be pulled from Raleigh Union Station to pay for improvements to a rail line to Charlotte, the N.C. Department of Transportation told Raleigh in a June 3 memo. DOT leaders haven’t publicly announced the change, but Raleigh leaders are already discussing significant cutbacks to the project, including a possible temporary station.

The $15.1 million was stimulus money state DOT leaders and Federal Railroad Administration officials said would be left over from the Piedmont Improvement Program, a $520 million series of improvements to the rail lines between Raleigh and Charlotte.

That project has cost more than expected, said Richard Walls, DOT deputy secretary for transit.

“As that program has matured, it’s become apparent that those funds are not going to be available,” he said.

In his letter to the city, Walls noted that the tentative nature of the $15.1 million wasn’t mentioned at the big announcement last fall. He attached a September memo from his predecessor, Paul Morris – who was ousted in February by incoming transportation secretary Tony Tata.

According to Walls, Morris’ memo failed to “clearly state the funds were ‘contingently’ committed to this project.” DOT leaders say money for Union Station was contingent on the other projects being completed first.

Reached Wednesday, Morris said DOT had approvals from state legislators and the federal agency to shift the $15.1 million to Union Station, and that there was no “contingency” involved.

He said he’s skeptical that the other stimulus-funded rail projects need more money because their construction has barely begun.

“I don’t know why they’re suddenly creating an argument for withdrawing the money,” Morris said. “It’s a little bit peculiar that suddenly right after the turnover of the administration (to Republicans), there would be a decision to reallocate the funds from a Raleigh-centric project.”

Allen: ‘Rely on our partners’

The $15.1 million loss leaves the project with a substantial shortfall, and city and state officials are looking for other grants and funding sources. If they don’t succeed, Raleigh could wind up with a temporary station, putting a full-scale renovation to the Dillon Supply Viaduct building on hold for years.

“I would say there’s not a known certain path at this point,” City Manager Russell Allen said Wednesday, adding that the city’s next step is applying for another federal grant. “I think we just have to continue to rely on our partners to work hard to make this project work.”

For his part, Walls says the state has “a plethora of options” to fill the funding hole. But first DOT wants to get an updated estimate of the station’s cost – the original $60 million price tag is no longer accurate, Walls said.

“The reality is the costs are going up,” he said. “Even without the $15 million (loss), there would be some shortfall.”

Walls expects a new estimate will come after architects unveil the latest Union Station designs later this month.

They’ll show off the designs at a public meeting from 6-8 p.m. June 26 at the Contemporary Art Museum, 409 W. Martin St.

In earlier design presentations, architects from the Raleigh firm Clearscapes have shown a sweeping transformation of the vacant Warehouse District building, creating a mixed-use gathering space with restaurants and shops. An outdoor plaza on West Street would serve as a gateway to the station.

Priorities: platforms, parking

Clearscapes will continue designing the building, but Allen said the funding shortage could postpone the Viaduct building renovation until a later stage of the project. Another option would be to renovate only part of the 30,000-square-foot building and delay completion of the project.

Either way, platforms and parking would come first to give Amtrak passengers a better facility than the cramped current station on Cabarrus Street, the manager said.

The new Union Station had been slated to open in 2017, but Walls said he’s unsure how the funding loss will affect the timeline. “I think it’s impossible to say at this point,” he said.