Yesterday afternoon, over the State of Maryland’s objections, a Maryland Circuit Court judge ruled that the Purple Line Transit Partners (the concessionaire) will be allowed to depart the project, if they so choose, with a potential transition period measured in weeks.
Purple Line NOW President Ralph Bennett clarified what this ruling has not changed, “Maryland needs the east-west mobility, access to jobs, environmental benefits, and economic development the project will bring. The Purple Line remains a great value, so it was reassuring to hear Acting Project Director of Transit Development and Delivery for the Maryland Transit Administration Vernon Hartsock promise at Purple Line NOW’s forum in August that ‘the state is fully committed to the completion of the Purple Line project, regardless of how those negotiations end.’”
Mr. Bennett is disappointed, however, that the state and concessionaire had not used the time granted by the stay to reach an agreement, “If the concessionaire abandons Maryland, it will add delays as alternate financing must be arranged while extending the disruption that Montgomery and Prince George’s counties will have to endure.”
Bennett noted that the Maryland Department of Transportation has led the negotiations with the concessionaire and has been exploring alternate ways to finish the job. “The next step is clear,” he added, “whether the resolution will be a last-minute agreement or whether Maryland ultimately takes over construction, the buck stops with Governor Hogan. Maryland is the owner of this project and this disagreement has been allowed to fester for too long. The future riders of the Purple Line, residents and businesses disrupted by construction, and the workers braving a pandemic to keep the project moving forward need decisive leadership from the Governor. Whatever the outcome, a clear statement of commitment and a sense of the path forward should come from Governor Hogan.”
Purple Line NOW Vice President Greg Sanders reviewed what we have learned from the Washington Post (K. Shaver, Purple Line Builders May Quit, 10 September 2020) regarding the next steps forward. “Tough decisions await our elected leaders, but the Purple Line has already overcome greater challenges and delays. While Maryland has disputed the alleged magnitude and source of cost overruns, either a negotiated settlement or Maryland taking over the project will involve some increases in cost. The good news is that the Purple Line remains a great value. (Maryland Matters, 23 May 2020.) This dispute does not undermine its fundamental strengths and even a significant cost increase will be offset by the billions in annual economic activity the completed line will stimulate.”
The immediate challenge is not the increase in cost, but the shift in financing to the public sector. Mr. Sanders summarized, “There are roughly a billion dollars in existing project financing that Maryland will need to take over. This financing would take six to twelve months to obtain, as the pandemic is already depleting the transportation trust fund.”
The concessionaire walking away from this project would be immensely harmful, but Sanders observed that there is some good news, "Fortunately, interest rates have dropped since the project began, the state retains a AAA bond rating (J. Sullivan, Baltimore Business Journal, 25 February 2020) and recent reports show that state finances are weathering the pandemic better than had been feared (P. Wood, Baltimore Sun, 9 September 2020). There are options, which is why we believe it was so important that Maryland Transportation Secretary Greg Slater and Maryland Transit Administration Administrator Kevin Quinn repeatedly expressed their commitment to work hard to find solutions."
Purple Line NOW Treasurer Tina Slater pointed to the progress that has already been made as a vital reminder of the importance of the project, “Construction is 30 percent complete and can be seen in Bethesda, where the Purple Line will connect with a new entrance to the metro station, in Silver Spring, where a tunnel has been dug and bridges replaced, in College Park, where track has been laid past the new rail yard and maintenance facility where the first trains are being tested to New Carrollton, and where private sector construction is already booming.”
Ms. Slater recommends that Marylanders check out our recent forum to hear about concrete developments that have already taken place. Slater added that “In addition to our elected leaders, civil servants, and entrepreneurs highlighting developments in their neck of the woods, a study has found that there is already a ten percent increase in value for properties along the line. The Purple Line just makes sense, within its 16.2 miles, it connects major job centers, the University of Maryland, four branches of the Metro, all three MARC lines, as well as the Amtrak station at New Carrollton.”
Slater noted that state and county officials have reiterated their commitment to the project, even in the face of these challenges, emphasizing that “we now need to hear from our state’s top elected official. The Governor was understandably reticent to speak while key issues were being resolved in court, but now the time is right for him to lay out a vision that cannot simply be deferred to his capable transportation officials. The speed with which we can finish the job will be a vital part of Governor Hogan’s legacy and we need his leadership.”