The $1.9 billion Southwest Light Rail Transit project has cleared a major hurdle now that a tentative deal has been reached over the co-location of freight and light rail-lines in the Kenilworth Corridor and Bass Lake Spur in Minneapolis, the Metropolitan Council said Monday.
The agreement is a big deal in part because it locks up another key piece of land for the planned project, which will extend on a 14.5-mile route between Eden Prairie and downtown Minneapolis.
But the regional planning body also said Monday that it has asked bidders on the project’s civil construction package to extend the “validity” of their bids another 60 days to allow time to finalize the agreement with the railroad and to allow the federal Surface Transportation Board (STB) to review the deal. The bids are currently set to expire Aug. 1.
That could delay the final award for the roughly $800 million civil construction contract by up to two months. Met Council officials said it’s not clear yet what, if any, impact that will have on the overall project budget and schedule.
“The STB was involved in the mediation [with the railroad] so we feel the 60-day extension will provide adequate time for the STB to take action,” Met Council spokeswoman Kate Brickman said in an email.
The bidders have 10 days to respond, the council said. Met Council Chair Alene Tchourumoff said Monday she’s “optimistic” that the bidders will agree to the 60-day extension.
In May, the team of Black River Falls, Wisconsin-based Lunda Construction and Maple Grove-based C.S. McCrossan submitted the apparent low bid of $799.514 million for civil construction, the single biggest work package for the project.
Don Kohlenberger, owner of Minnetonka-based Hightower Initiatives, a construction consulting business, said the Met Council’s request is “reasonable,” but not without consequences when it comes to the cost of things such as steel or labor.
Kohlenberger said it’s probably in the contractor’s interest to work with the agency on requests like these, but “there is a breaking point to anything; if 60 days turns to 120 days that is a different story.”
The rail co-location deal announced Monday involves the Met Council, the Hennepin County Reginal Railroad Authority, and the Twin Cities & Western Railroad. The deal is subject to approval by the council and the Hennepin County Board.
Tchourumoff said she can’t disclose specifics of the deal because of a confidentiality agreement with the railroad. But she said it’s “a good deal that protects the public’s interest” and moves the project forward.
“The major takeaway is we are pretty optimistic about this agreement with Twin Cities & Western Railroad,” Tchourumoff said Monday in a conference call with reporters.
In April, the Glencoe-based Twin Cities & Western Railroad sued the Met Council and other project partners over the project team’s plan to build and operate on the proposed route. The parties have since been in mediation.
The railroad has said it wants to protect itself and its shippers from loss or property damage resulting from light-rail operations. The agreement announced Monday resolves “remaining issues,” according to the council.
Some construction could begin yet this year. The council hopes to get word on a “Full Funding Grant Agreement” in the first half of 2019. That’s an agreement for the federal government to cover half of the cost.
The Lunda-McCrossan bid was nearly $3 million higher than the previous apparent low bid of $796.517 million submitted last August by Burnsville-based Ames Construction and Plain, Wisconsin-based Edward Kraemer & Sons.
The Met Council rejected that bid, and three others, on the grounds that they were too high or not responsive to bid documents because of subcontractor “eligibility issues.”
Ames-Kraemer was the only other bidder the second time around. Ames-Kraemer’s bid was $812.1 million.