L.A., U.S. Get Somewhere in ‘Tunnel to Nowhere’ Funds Dispute

A funding dispute between the City of Los Angeles and the federal government over what critics have dubbed a downtown transit “tunnel to nowhere” has been tentatively resolved because city officials have promised to refund millions of dollars if the structure is not used for passenger service within the next few years.

The federal government had put a hold on about $3 million pledged to the so-called Bunker Hill Transit Tunnel after The Times reported last March that the city was proceeding with construction, even though it had no clear plans for how or when the concrete-walled corridor would be used.

Ralph Stanley, the head of the federal Urban Mass Transportation Administration, announced at the time that the city would have to guarantee federal funds were not being poured into a tunnel that would “sit there in perpetuity.”

The partially built tunnel--separate from the proposed Metro Rail subway--is the last remnant of the now-defunct People Mover project, an automated shuttle system that was to have carried workers, residents and shoppers throughout downtown. The federal project was killed by the Reagan Administration in 1981, but some residual funds were promised to help complete the tunnel.

Tower Projects

Pieces of the Bunker Hill tunnel, up to 28 feet wide and 15 feet high, have been incorporated into several office tower projects, and plans call for the tunnel to eventually run between Flower and Hill streets, roughly paralleling 3rd Street.

City officials said Monday that they still have no specific plans for how and when the tunnel will be used or where the funds to build and run a transit system through it would come from. But they said the structure should be completed to preserve a valuable transportation asset.

Despite criticism of the project and the uncertainty about federal funds, the City Council in April voted to proceed with a $1-million tunnel section under Olive Street. Construction is under way and expected to be completed in March.

Under a newly negotiated agreement, which will be considered by a City Council committee today, the city could again be eligible for $3 million in UMTA funds. The city must guarantee that a mass-transit system will be operating in the tunnel by about 1993, when an office tower adjacent to the tunnel and Metro Rail are expected to be completed. If those deadlines are not met, all UMTA funds would have to be returned.

In addition, the agreement specifically precludes additional federal funds from being used for any cost overruns on the project.