Funding blocked for transit center amid concerns of sinking Millennium Tower

The fallout of San Francisco’s sinking downtown Millennium Tower broadened Tuesday when millions of dollars for the second phase of the nearby Transbay Transit Center was blocked amid concerns The City will once again be on the hook for ballooning costs.

Earlier this year, the the Board of Supervisors approved a $260 million bailout for the Transbay Joint Powers Authority’s Phase 1 of the Transbay Transit Center. Months later, the 58-story Millennium Tower near the center and under TJPA oversight was revealed to have sunk more than three times its forecasted sinking, prompting a lawsuit and city investigations.

Meanwhile, city leaders are slamming the brakes on the second phase of the multi-billion dollar transit project.

On Tuesday, the head of the Transbay Joint Powers Authority, Mark Zabaneh, said he wanted $6.77 million in Proposition K sales tax revenue to move ahead with the $3.9 billion Phase 2 of the project.

Phase 2 would create a Caltrain extension downtown – the route alignment remains under debate – and ultimately serve as a station for high speed rail connecting San Francisco to Los Angeles.

The San Francisco County Transportation Authority Commission, on which serve the 11 members of the Board of Supervisors, voted 7 to 3 to not release the nearly $6.8 million, citing concerns about the sinking tower and cost overruns based on the history of Phase 1 and the unresolved issues related to Phase 2.

Supervisor Aaron Peskin first raised the concerns last week in the San Francisco County Transportation Authority Plans and Programs Committee, but there weren’t enough votes on that committee to support his motion to not release the Prop. K sales tax revenue.

At Tuesday’s commission meeting, however, Peskin’s motion was approved. Peskin voted to block the funding along with Board of Supervisors President London Breed and supervisors Mark Farrell, John Avalos, David Campos, Jane Kim and Malia Cohen. Supervisors Scott Wiener, Eric Mar and Katy Tang opposed it, and Supervisor Norman Yee was absent.

The committee is expected to discuss the funding at a meeting in October.

Zabaneh warned that a postponement could jeopardize the project, such as by compromising ongoing discussions to secure funding for the second phase.

“If this money is not allocated this month I am afraid that you would be pulling the plug on the DTX (downtown rail extension of Caltrain) because we have a lot of momentum going forward now,” Zabaneh said.

Peskin called Zabaneh’s assertion “hogwash,” arguing a two month delay for “our discharging of our duties’ will not derail the project.

“The whole relationship between the SFCTA and the TJPA through its staff has always been to jam us,” Peskin said. “Let’s slow down a little bit. Let’s have that conversation so that we do not end up in the same position that we are in now relative to the cost overruns.”

Wiener, however, said it is “critically important” to let Phase 2 continue.

“They are not asking for the moon,” Wiener said. “They are asking for enough to keep the design process moving forward.”

Peskin said The City needs to have better oversight of the project given the unresolved issues around the sinking of the Millennium Tower at 301 Mission St. near the Transbay Transit Center. The tower’s developer blames the Transbay Joint Powers Authority for the building sinking well beyond the initial four to six inches, while the authority blames the developer’s decision not to secure the foundation to the bedrock. Condo owners have sued the developer and Transbay.

Campos agreed The City should postpone the funding. “As we’re dealing with our own leaning Tower of Pisa here in San Francisco, I think that we have a responsibility to make sure that we do everything we can to make sure that something like this project is handled properly,” Campos said.

He added, “There are issues around the existing litigation that have been filed around the Millennium Towers skyscraper that raises questions about [what] the CTA’s own liability could be.”

Peskin also noted the transit center has a history of cost overruns. For example, the Board of Supervisors approved in May a $260 million bailout for the project’s Phase 1, which is now scheduled to be completed in December 2017 with a total cost of $2.259 billion.

“I want to go into this next phase with our eyes very wide open,” Peskin said last week.

With the cost overruns and other snags resolved on Phase 1, Transbay is now focused on Phase 2. A new estimate has Phase 2 costing $3.9 billion, up from the 2013 estimate by $900 million. That includes a $161 million underground pedestrian walkway connecting Transbay Transit Center to the Embarcadero BART station.

Maria Lombardo, chief deputy director CTA, said that while she is “much more confident in the oversight” CTA will have over Phase 2, the delay is “not the end of the world.”

She said, “I know it’s not what the TJPA wants, but it certainly isn’t stopping anything.”

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