The plans for Union Station could be off-track

The redevelopment of Denver's historic Union Station into a transportation hub was supposed to have begun this past spring. If things had gone as planned, a new light-rail terminal would be nearing completion this fall, followed by an underground bus terminal, a commuter-rail train shed and a grand new plaza in front of the building ("The Station Agents," August 14, 2008).

So far, however, the sleepy station, which serves only two Amtrak trains a day since the weekly Ski Train to Winter Park called it quits, is devoid of construction.

The problem is money — or, rather, lack thereof — and public stakeholders, including the City of Denver, the Denver Regional Council of Governments, the Colorado Department of Transportation and RTD, are getting anxious.

Still far short of the project's $499 price tag — a price that's gone up by $22 million in the past twelve months — those behind the redevelopment have come up with a do-or-die funding scenario, one that, if it fails, would leave the entire plan in tatters.

Even if the gamble works, there's the matter of a lawsuit filed against the Federal Transit Authority (FTA) over Union Station last May by the Colorado Rail Passenger Association (ColoRail) advocacy group. The FTA is expected to respond to the suit by this Friday, but if the matter lingers in court, it could further delay the project.

The rebirth of historic Union Station has been a gutsy move ever since it was first envisioned in 2001. The venture entailed an expensive and convoluted labyrinth of rail lines, bus infrastructure, pedestrian walkways and private development in a busy corner of downtown. All of it would be overseen by a cadre of local agencies and subject to the scrutiny of numerous public interests.

The project got a big boost in 2004 when Colorado voters passed FasTracks, a massive transit system that would use the new and improved Union Station as its epicenter. But the plan only allocated $208.8 million for the work at Union Station, less than half of what will eventually be needed.

This left the stakeholders behind Union Station struggling to assemble an intricate funding scheme to fill in the gap. Things deteriorated last summer when the dismal debt market made it clear that much-needed investors would be few and far between.

In the fall of 2008, however, the public agencies involved discovered a potential lifeline: the Transportation Infrastructure Finance and Innovation Act (TIFIA), a United States Department of Transportation credit program that apparently had funding to spare.

"That was a very exciting discovery," says Diane Barrett, special assistant to Mayor John Hickenlooper, who's worked closely on the project. With a potential $150 million loan from TIFIA, plus a second loan of at least $165 million that officials hoped to get from another federal source, the Railroad Rehabilitation & Improvement Financing Program (RRIF), Union Station would finally be fully funded.

Oddly, no one had ever asked the USDOT for both TIFIA and RRIF loans for the same project, and the request took some time. "It's a novel way to finance the project," says Chad Fuller, senior financial analyst for the city. "Everyone is excited to make it work, but it's also a new way. Any time you forge a new path, it's going to take longer."

DOT signed off on the double request last spring, and administrators expect to hear whether they got the loans this fall. Barrett believes there's a "95 percent chance" they'll score both — but if either one falls through, things are going to get ugly. "The bottom line is that this project, at its current design and budgeting, is dependent on both loans coming through," says Fuller. If they don't, parts of the plan will have to be sacrificed.

Even if they are approved, ColoRail's lawsuit could hold up construction. "At such time the financing comes into place, the lawsuit may have a financial effect," says ColoRail president Ira Schreiber. "We are asking the Federal Transit Administration to reopen the Union Station environmental impact statement and take a good, hard look at the alternative options [for the development]."

ColoRail's lawsuit argues that the current plan falls short on promises to include the maximum number of transit options at a central hub since the light-rail terminal will be located several blocks away and ColoRail believes there's little room for future expansion.

The plan lost another transit option last fall, when Greyhound Lines Inc. dropped its plans to move its operations to Union Station after discovering it would have to invest $21 million in the project for the privilege. "It doesn't take a rocket scientist to find out we are an economical form of transportation," says Greyhound regional vice president Michael Timlin. "We can't afford a large sum of money, and we don't think the amount we were asked to contribute was a fair amount."

ColoRail's lawsuit also alleges that the project manager for Union Station's environmental impact statement, Gina McAfee, had a conflict of interest while working on the project because McAfee worked for Jacobs Carter Burgess, a consulting firm that was also overseeing the FasTracks project. The lawsuit alleges McAfee's company had a financial interest in promoting the current Union Station redevelopment plan, since it "favors FasTracks components over non-FasTracks components."

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