Sound Transit is suing Microsoft for land and access to build light rail from Overlake to downtown Redmond, and even claimed the software giant was creating risks of missing the agency’s August 2024 goal to complete the project.
The two wealthy institutions, which usually cooperate, differ by $17.5 million over how much Sound Transit should pay to buy some slivers of land next to Highway 520, plus easement rights for worker access and equipment storage.
Surface tracks and retaining walls will be built next to the eastbound lanes, between the Northeast 40th Street and Northeast 51st Street interchanges, where Microsoft’s north campus rises near state highway.
Construction won’t destroy any buildings, but crews will occupy a roadway between a parking garage and offices, while creating noise, vibration and potential utility impacts.
Attorney Stephen VanDerhoef, who represents Microsoft, wrote that Sound Transit’s original access documents, part of a “vast and complex” undertaking, were too vague for the company to calculate land values last year.
“I have never had a case like this one that involves so many overlapping and distinct fee takes (land buys), temporary construction easements, permanent easements and long-term disruption occurring in the heart of a large business campus,” he wrote.
Negotiations resumed, and on Feb. 27 the company gave permission for soil sampling to occur while the sides try to solve their dispute, records show.
However, construction manager Thomas Finlayson painted a bleaker picture in a Feb. 21 court document that said the goal to carry passengers by Aug. 19, 2024, was already slipping, until his team could gain preliminary access from Microsoft.
“Each day after January 29, 2020 that Sound Transit is unable to provide the contractor access to Microsoft property to perform design related exploratory work results in a day-for-day delay to the August 19, 2024 revenue service milestone,” he wrote.
If the case isn’t tried until July, for instance, that “will result in a 7.5-month delay and approximately $16.2 million in added costs to the project,” he wrote.
The lawsuit, in King County Superior Court, offers a peek into vast real-estate maneuvers to build light rail in a tight urban region. Just to construct the $1.5 billion, two-station Redmond project, mainly on state highway land, Sound Transit will acquire 93 parcels through eminent domain, costing an estimated $199 million including overhead.
Sound Transit offered Microsoft $10 million in May 2019, while the company’s appraiser valued the taking at nearly $27.6 million, says a filing by the agency’s attorney, Jacqualyne Walker.
A jury trial is scheduled May 11 to settle the price dispute, though the novel coronavirus outbreak throws all gatherings, including jury trials, into doubt.
“We are continuing discussions with Microsoft, and expect to resolve the matter before there is a need to go to court,” Sound Transit spokeswoman Rachelle Cunningham said last week.
She described Finlayson’s statement as a “worst-case scenario,” adding weekend soil tests have begun. The delay risk would arise if surprises are found in the soil — with less time to solve those. Heavy construction is scheduled to start this August.
“It is early in the project, and there are many opportunities to mitigate delays. We anticipate that the project will be able to proceed on schedule,” she said.
Officially, passenger service is scheduled to start Dec. 31, 2024, not four months earlier in August of that year, according to Sound Transit’s most recent Agency Progress Report. The August goal provides a cushion in case of unexpected delays.
“We haven’t heard anything concrete, or that date. The date we’ve been told is 2024 and that’s all,” said Kirk Hovenkotter, executive director of the Greater Redmond Transportation Management Association.
The bottom line appears to be that the dispute lessens hope for an early opening, as occurred for University of Washington Station in March 2016, and might happen for the Northgate extension, which is four months ahead of its September 2021 deadline.
Redmond, with a population that grows by 50,000 during a typical workday as Microsoft and other workers stream in, has a huge stake in avoiding delays to its downtown station, which is surrounded by new apartments.
“Light rail is going to be the magic carpet for the Eastside and cut travel time in half,” Hovenkotter said.
The early soil research includes “potholing,” in which a deep, narrow cylinder of soil is extracted to confirm utilities aren’t blocking construction. Besides underground columns and noise-wall foundations, builders will plunge steel rods called tiebacks into the soil, requiring the agency to buy underground land rights.
A related lawsuit pits Sound Transit against Seattle-based General America Corporation, which holds a corner parcel surrounded by Microsoft. Liberty Mutual Insurance operates a data center there. The light-rail project would buy a private access road and temporarily occupy a parking lot for construction equipment or materials.
Microsoft stressed it has a long relationship with Sound Transit and continues to cooperate.
The company gave $300,000 in 2016 to the Sound Transit 3 tax-increase campaign, whose passage enabled the agency to promise trains to Redmond by 2024. And it is paying $42 million to build a 50-foot-wide pedestrian bridge, open to the public, across Highway 520 into Redmond Technology Center Station, to open in 2023.
The property being disputed in court is a few train lengths to the north.