Metro Rail May Face New Financial Woes

The Los Angeles Metro Rail subway may be burrowing into new financial problems.

Long-awaited cost estimates for the second leg of the line from MacArthur Park to Universal City were released by the Southern California Rapid Transit District on Wednesday, and they are $260 million higher than what county transit officials, who control the project’s purse strings, estimate is available.

The new figures project that the extension, the final funding package for which is now being developed, would cost $1.68 billion, regardless of whether it is all subway or a mix of elevated track and underground tunnel. The assumption is that the extension would run west along Wilshire Boulevard and north through Hollywood and the Santa Monica Mountains to the San Fernando Valley.

But the Los Angeles County Transportation Commission, which controls local transit funds, has said that based on current federal, state and commission revenues, only $1.42 billion would be available. That assumes the City of Los Angeles will increase its share, and a “special benefit” tax will be levied on businesses around stations.

It also assumes that the commission, unless it can get the state Legislature to ease restrictions on how much debt it can incur to build the subway, would be unable to start work on proposed trolley lines in East Los Angeles, the Valley or the South Bay until the mid-1990s.

Commission, RTD and city officials must now sort out how to proceed and approve funding agreements by October or face the possibility of losing tens of millions of dollars in federal funds already committed to the second leg.

One option is to shorten the second leg of construction, stopping in Hollywood. However, that is likely to bring howls of protest from the other side of the hill, where Valley political leaders are pressing for an early subway connection for their constituents.

Another topic of debate will be the accuracy of the RTD’s estimates. Commission officials are suspicious of RTD figures indicating large sections of elevated track would be just as expensive as boring subway tunnels.

“It seems illogical,” said Richard Stanger, who heads the commission’s rail section.

But city planners and elected officials, including Hollywood-area Councilman Michael Woo, have recently begun lobbying for an all-subway system, even if it costs slightly more.