The South Shore Line's West Lake Corridor project passed two major milestones this year in the Federal Transit Administration's New Starts grant program.
In March, the FTA announced a project rating that moves the project a step closer to receiving federal funding that would cover about 38% of its cost. The FTA's medium-high rating was revealed in the Department of Transportation's annual report on the Capital Investment Grant program, which includes New Starts.
"Today, our economic future has been brightened," said U.S. Rep. Pete Visclosky, D-Gary, on the day the report was issued. The retiring congressman has made expansion and recapitalization of the South Shore Line a priority.
The $933 million West Lake Corridor would run nine miles from Hammond to Dyer. It would include a new Gateway station and maintenance facility in Hammond, connecting it to the existing South Shore, a south Hammond station, a Munster station at Ridge Road and a Munster-Dyer station at Main Street.
In October, the $816 million West Lake project was moved into the engineering phase of its Capital Investment Grant program. Completion of that phase would put the Northern Indiana Commuter Transportation District in position to negotiate a grant agreement with the FTA.
"That really is the FTA's stamp of approval on the project," Northern Indiana Commuter Transportation District President and CEO Michael Noland said when West Lake's advancement was announced. He said projects approved for the engineering phase of the grant program have ultimately received grants, unless being withdrawn by their sponsor.
"It's a big threshold to cross," said Bill Hanna, president and CEO of the Northwest Indiana Regional Development Authority, which is the local fiscal agency for the project. "It's pretty historic for us."
Entry into the engineering phase has fixed the maximum federal grant at $354.57 million, NICTD's requested 38% of the project's current capital cost estimate. That percentage is less than the 49% included in NICTD's original application for the engineering phase, filed in September 2018, and the FTA is requiring an updated financial plan to confirm the local and state commitments are sufficient.
In April, the funding plan, which includes state and local contributions, received a boost to make up for the lower federal ask when the State Legislature passed, and Gov. Eric Holcomb signed, the state's biennial budget. The budget includes up to $205 million in additional money for the railroad's major capital projects, and links NICTD more closely to the Indiana Department of Transportation.
"It's really going to position us to bring these projects home," South Shore President Michael Noland said of the West Lake Corridor and Double Track projects.
"It's tremendous to get an additional $205 million," RDA President and CEO Bill Hanna said. "It's quite a statement, beyond just the money."
The budget, which awaits the governor's signature, adds about $138 million to the state's commitment to the West Lake rail line from Hammond to Dyer, $41 million to its commitment to add tracks to the South Shore between Gary and Michigan City, and includes up to $25 million as a contingency fund.
The money will provide significant cash flow in advance of grant agreements with the Federal Transit Administration, address various project cost increases, and make up the difference if federal grants cover a lower percentage of the projects than originally hoped — something the Federal Transit Administration has signaled, officials locally and in Indianapolis said.
The new money is coming from the $1 billion in proceeds the state received from the recent Indiana Toll Road lease amendment that allowed the toll road's operator to increase tolls on heavy trucks.
The financial plan for the $420 million Double Track project was approved in June by the RDA, Indiana Finance Authority, NICTD and the State Budget Committee.
A package of agreements also included updates to the financial plan for the $816 million West Lake Corridor project and to the governance agreement that formalizes the roles and responsibilities of the agencies involved in the two projects.
RDA President and CEO Bill Hanna said the Double Track plan and updates to the West Lake plan and governance agreement reflect an increase to the contingency fund required by the Federal Transit Administration, a decrease in the expected amount of the federal grants that will help fund each project, and the subsequent commitment by the state to fill those needs.
Hanna said there are two main components for the competitive federal grants that would pay 38 percent of the projects' costs: "solidity of financing" and "the strength of the economic development aspect."
"We're trying to be as competitive as we can on the national level," Hanna said. "This gets us there in terms of the financial competitiveness."
The non-federal funding for West Lake is a combination of state and local money, along with RDA funds. Along with state and RDA money, Double Track will receive contributions from LaPorte and St. Joseph counties. Michigan City is providing two-thirds of LaPorte County's contribution.
Officials involved in the projects entered late 2019 with the hope of Double Track receiving a favorably rating and entry into the engineering phase. Construction on the Double Track project is scheduled to begin in the spring of 2021, with completion in the summer or fall of 2023.
NICTD intends to submit Double Track to the Federal Transit Administration for its rating this summer, with the hope of moving into the grant program's engineering phase before the year ends.
New board of trustees
The state budget also reformed the NICTD Board of Trustees, shrinking it to five members and including the commissioner of INDOT as chairman. The first actions of the board, taken in June, included ratification of the updated governance agreement for its West Lake Corridor and Double Track projects and the hiring of two firms to complete engineering and manage the latter.
The board approved contracts with AECOM Technical Services to provide final engineering and design services for the project, and with HDR Engineering to provide program management services. The contract sets AECOM's compensation at a not-to-exceed sum of about $13.4 million; the HDR contract has a not-to-exceed sum of about $5.2 million.
Both companies have already played significant roles in engineering and management for the projects. The result of their new work on Double Track will put the project in position for NICTD to solicit bids for construction, which, according to NICTD's schedule, would begin in May 2021, with service beginning in March 2023.
HDR is also serving in a program management capacity for the West Lake Corridor. That project is already under consideration for entry to the engineering phase of the New Starts grant program, and on Monday, the NICTD board approved a short-list of candidates to design and build the project. They are: F.H. Paschen-Ragnar Benson joint venture; Walsh-Herzog joint venture; and Kiewit Infrastructure Co.
Unlike Double Track, the West Lake project will be designed and built by a single company or joint venture. The "design-build" process, unlike the traditional "design-bid-build" process that segregates engineering and construction, is presumed to allow the freedom to find efficiencies in delivering the project.
The three finalists will have until early December to deliver proposals to do the rest of the engineering for West Lake — estimated at 70% of the total — and then to build the new nine-mile rail line, four stations and maintenance yard. NICTD's schedule calls for construction to begin in May 2020, with service to begin in March 2024.
In October, the NICTD board ratified the plan to improve the South Shore Line's Miller station and make the area a focus for when it agreed to take control of land that is currently the route of U.S. 12 through the train station area.
U.S. 12 currently merges with U.S. 20 west of the station, but a $5.5 million Indiana Department of Transportation project will create a new intersection east of the station, eliminating the section of U.S. 12 that ran along the south side of the station. That will allow the railroad to straighten its tracks and make room for the high-level boarding platforms. It will also open land currently split by U.S. 12 for future development.
Noland said NICTD is working with the Northwest Indiana Regional Development Authority, which is taking a lead role in transit-oriented development around the stations, on Lake Street improvements "to be positioned to improve the entryway into that Miller/Aetna area."