Metro Rail Funds Pass Major Test in Congress : Transit: Legislative panel allocates $135 million for construction of the Red Line subway in the Mid-Wilshire area and Hollywood.

Congress is set to approve spending $135 million in 1992 to help finance Metro Rail construction in the Mid-Wilshire area and Hollywood, providing a crucial chunk of money for the multibillion dollar mass-transit project, local transit officials said Thursday.

Metro Rail officials hailed the appropriation as an “absolutely critical” step in the construction of the entire 400-mile Metro Rail project, which will be the nation’s second largest mass-transit rail network.

“There is a lot of competition for scarce (federal) dollars . . . and we got by far the largest single share of it,” said Neil Peterson, executive director of the Los Angeles County Transportation Commission.

The action was approved Wednesday by the House and Senate Appropriations Conference Committee as part of a federal transportation bill. Approval by Congress and the President is as good as done, said Stephanie Brady, a spokeswoman for the commission.

Peterson said local transit officials and elected leaders had traveled back and forth to Capitol Hill in an intensive lobbying effort. Competing against 22 other cities for federal funds set aside for new rail programs, Los Angeles got more than one-quarter of the entire $530-million annual budget, said Peterson and Sen. John Seymour (R-Calif.)

The latest appropriation means that Metro Rail officials now have obtained most of the $667 million that Congress authorized in principle for the project in 1987. Transit officials predicted the remaining $52 million will be approved next year.

The funds will be used to help build the 6.7-mile second segment of the Red Line subway, which will extend west from the corner of Wilshire Boulevard and Alvarado to Wilshire and Western Avenue. A northern extension will go from Vermont Avenue and Wilshire to Vermont and Hollywood Boulevard, then west along Hollywood to the intersection at Vine Street.

Construction of the Red Line began in 1986. It is expected to begin operation in 1993, with the extension to Wilshire and Western opening in 1996, and service to Hollywood and Vine beginning by 1998.

Most of the Metro Rail project is being paid for by local transit dollars. Local transit officials asked the federal government to pay 50% of the cost of the Red Line because it was so “difficult and expensive,” Peterson said.

The funding announcement was not greeted as good news by some Hollywood business owners and residents, who fear the expected three years of subway construction will put them out of business. Metro Rail officials, criticized for their handling of construction during the first leg of the project downtown, have promised to create as little inconvenience as possible.

Transit officials are now gearing up for their next big battle: Persuading Congress to authorize another $615 million over five years for three subway segments, one extending to North Hollywood, one heading west from Wilshire and Western and one into East Los Angeles. If and when those funds are authorized, local transit officials will still have to compete for them.

The Red Line project, which is being built by the Rail Construction Corp., has been plagued by major delays and cost overruns. But Peterson said most problems have been corrected since the RCC and the county Transportation Commission took over entire control over construction in late 1989.

Peterson conceded that those problems, and the perception on Capitol Hill that a subway is a bad idea for a city as spread out as Los Angeles, made it hard to compete for federal transit funds. But he said Los Angeles’ image “has turned around completely.”

“The (Bush) Administration now feels we are the best example of how to build a rail system in the nation,” Peterson said. “We are now No. 1 on their priority list.”