The state and local governments may agree on the need to replace the Alaskan Way Viaduct with a four-lane tunnel. But it's still not clear how they will pay for the project, estimated to cost around $4.25 billion.

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The state and local governments have agreed on the need to replace the Alaskan Way Viaduct with a four-lane tunnel. But it’s still not clear how they will pay for the project, estimated to cost $4.25 billion.

Gov. Chris Gregoire has promised $2.8 billion for replacing the viaduct, including digging the tunnel, but the Legislature has set aside $2.4 billion — leaving a $400 million gap.

And Seattle Mayor Greg Nickels said the city’s share of the project could be almost $1 billion, which would be used to fix the waterfront’s sea wall, make street improvements and possibly build a streetcar line.

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Gregoire scheduled a news conference for this morning to announce the agreement, but the news leaked Monday. More details are expected when Gregoire, Nickels, King County Executive Ron Sims and Port of Seattle CEO Tay Yoshitani make their official announcement today.

Under the agreement, the state would pay to drill the two-mile tunnel under downtown and build an interchange near the sports stadiums in Sodo. The city and county would cover other costs, including the sea-wall repairs and surface-street and transit improvements.

It is up to the Legislature, which opened its 2009 session Monday, to authorize the state funding.

Legislative leaders in the state House and Senate said they support tolling the proposed tunnel to raise the additional $400 million the state needs.

“There has to be tolling. In any megaproject there is going to have to be tolling,” said Sen. Ed Murray, D-Seattle, chairman of the Senate Democratic caucus. “There is no other way to move forward on megaprojects if we don’t.”

House Transportation Chairwoman Judy Clibborn, D-Mercer Island, also supports tolling. The governor’s office would say only that Gregoire “is not opposed to tolling.”

The city’s share of the money would come from a variety of sources, including a local taxing district, Nickels said. He also said he hopes the federal stimulus package expected from Congress would include money for the project.

The county would be responsible for transit improvements. Metropolitan King County Councilmember Dow Constantine, D-West Seattle, said the county has the power to approve a $20 car-tab tax to raise money but may need to go to the voters to ask for more.

The county already was searching for ways to replace stagnant sales-tax revenues, a shortfall threatening to cripple King County Metro Transit. Constantine said he hopes state and local governments can figure out how to plug that revenue shortfall and help finance the viaduct replacement at the same time.

Little information was available Monday about what role the Port would play, and officials there weren’t talking. Port commission President Bill Bryant said the commission “has not considered any investment, and any funding decision would have to be considered by the commission in public session.”

The four-lane tunnel, with two lanes going each way, would be bored beneath First Avenue. That path could allow the current viaduct to remain in use during tunnel construction.

The project would start at South Royal Brougham Way at the south end and emerge near Thomas Street, north of the Battery Street tunnel.

Nickels has supported a tunnel for some time.

“My goal has been to open up the waterfront,” he said, “and this will do that.”

In March 2007, Seattle voters rejected both a tunnel and another elevated highway as options to replace the 55-year-old viaduct, which was damaged in the 2001 Nisqually earthquake.

Officials then agreed to move ahead with projects on the north and south ends of the viaduct while discussing what to do about the middle section along the waterfront.

Last month, the state, city and county came up with two new finalists for viaduct replacement: an elevated highway like the existing viaduct, and a surface “couplet” in which southbound traffic would run on Alaskan Way and northbound traffic on Western Avenue.

Almost immediately, a group of residents, business people and environmentalists brought on board to advise the city, county and state said a tunnel also should be considered.

Gregoire ordered her staff to get more information about the tunnel and about claims from supporters that the project could be built for much less than the state had estimated earlier.

Not everyone is happy with the latest decision.

Mike O’Brien, chairman of the local Sierra Club chapter, said he opposes the tunnel because it’s too expensive and would do nothing to reduce greenhouse-gas emissions. He has supported surface-street improvements and additional transit to replace the viaduct.

“To spend a couple billion to build an underground highway along the waterfront only used for automobiles is the wrong type of investment to make right now,” O’Brien said. “The governor, mayor and executive turned their backs on global warming.”

Warren Aakervik Jr., president of Ballard Oil, which delivers fuel for the commercial-fishing industry, said the tunnel would not provide a connection to Ballard. He supports another elevated highway.

Aakervik predicted a tunnel also would funnel more cars to waterfront surface streets, making it harder for his trucks to deliver their cargoes.

“I don’t think it’s in the best long-term interests of the community,” he said, likening it to other city decisions, such as the extension of the Burke-Gilman Trail near his business, that he said are making it harder for traditional industrial businesses to survive.

“As this city becomes more of a bedroom, pedestrian, bicycle community, they give no thought to industry,” Aakervik said.

County Executive Sims has advocated using surface streets and increased transit to replace the viaduct. His office had no comment Monday and said he would wait for the governor’s announcement today.

Staff reporters Mike Lindblom, Emily Heffter, Jim Brunner, Susan Gilmore and Jennifer Sullivan contributed to this story.

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