Facing a longer timeline and rising costs, Seattle will cancel its contract to buy 10 new streetcars for the planned Center City Connector line.
The Seattle Department of Transportation (SDOT) announced the cancellation Monday, saying it would cost more to stay in the 2017 deal than to start over on a new contract. Department officials say they’re still committed to finishing the project.
The new streetcar, which would run along First Avenue and connect existing lines in First Hill and South Lake Union, was once set to open in 2018 but is now expected in 2026.
Mayor Jenny Durkan paused the project last year after The Seattle Times reported that costs to operate the new streetcar system could be higher than the city had previously said. Durkan later decided to go ahead with the project, but hasn’t said how she plans to fill a funding shortfall of about $56 million.
The larger cars were set to be built by CAF USA, an American subsidiary of a Spanish streetcar builder. The city signed a $52 million contract with CAF USA in 2017, but that contract has been under a stop-work order since last spring.
As Durkan’s administration attempted to restart the project this year, how the city would deal with those larger cars remained one of the biggest questions.
Chris Eilerman, streetcar and transit corridors manager at SDOT, called canceling the contract a “less risky proposition” than negotiating with CAF to extend the existing deal for the new completion date.
SDOT would not provide estimated costs for staying in versus leaving the contract, but streetcars are likely to get more expensive as the project stretches farther into the future and CAF could have demanded more money for a long extension of the project’s timeline.
The contract allowed SDOT to cancel the deal for any reason, said Eric Tweit, SDOT’s project manager for the Center City Connector. CAF did not respond to a request for comment Monday.
Getting out of the contract won’t come without a cost.
Before pausing the project, the city had already spent $5.4 million for early work under the contract, such as designing the cars and lining up subcontractors. That total could increase if CAF seeks reimbursement for other work done before the project was paused, Tweit said. SDOT could not estimate how much that might cost.
The planned streetcar expansion has support from transit advocates, some City Council members and business interests downtown and in the Chinatown-International District.
Emily Mannetti, economic development manager at the Downtown Seattle Association, said in an email Monday canceling the contract “ties in with the city’s overall efforts to ensure good stewardship of the project moving forward.”
Councilmember Lisa Herbold has been among the most vocal opponents of the project, doubting its value and high ridership projections. Herbold remained skeptical of SDOT’s assurances Monday.
“I think the fiscally responsible thing to do is abandon the project, given all of the unknowns,” she said.
Overall, the project is estimated to cost about $208 million, not including associated utility work. That’s about $65 million more than initially projected in 2015.
SDOT has explained the new, larger vehicles in part by saying the Czech company that built the city’s current streetcars is essentially out of business, making it impossible to get an exact match for the new line.
Last summer, another Czech company claimed it could provide cars to match the city’s current fleet, though it’s not clear it could meet federal requirements that a certain portion of the cars be built in the United States.
Of three companies that bid for the current contract, CAF’s offer was the most expensive, documents obtained through a public-records request show. Still, the company scored higher than two competitors because of other factors, including its ability to comply with the “Buy America” requirements.
SDOT maintains that even a new bidding process will probably result in cars that are longer and heavier than the existing fleet, forcing the changes to bridges and other structures.
“As we know the market right now, we might be able to get something closer, but we don’t think we’re going to get to something exactly the same,” SDOT spokesman Ethan Bergerson said.
The Seattle City Council last month approved $9 million for more design work to accommodate the bigger cars. After that work is done, SDOT will request new bids for streetcars.
This story has been updated to correct the amount of the streetcar project’s current funding shortfall.