DALLAS -- Maryland has only itself to blame for losses stemming from the court-ordered delay in its $5.6 billion Purple Line rail line, according to the federal judge who blocked the project in August.
District Court Judge Richard Leon vacated the Purple Line’s federal environmental approval last year just days before Maryland would have signed a full funding agreement for a $900 million New Starts grant from the Federal Transit Administration for the 16-mile rail line being financed as a public-private partnership.
Attorneys for the state said at Thursday’s hearing that the delay caused by the environmental lawsuit was costing the state $13 million per month and could make it liable for more than $800 million in cancellation payments to the private partner if the extended legal battle killed the project.
The state made a mistake when it signed a 36-year concession agreement with the private partners in April 2016 before the legal issues had been resolved, Leon said.
“Maryland was the one that took the risk,” Leon said. “You’re the ones who came up with the deal. Why should the court bail you out of the gamble you took?”
The state could have included an escape clause in the P3 agreement to protect it from adverse court rulings, he said.
“You chose the litigation strategy that put you in the position you’re in today,” Leon said.
Leon ordered a new supplemental environmental review of the project in late May after agreeing with the plaintiffs that Metro had failed to adequately reexamine the impact on the Purple Line of ridership declines and maintenance problems on Washington Area Mass Transit Authority’s Metro system.
Maryland Attorney General Brian Frosh filed an appeal with the federal Court of Appeals for the District of Columbia just hours after Leon’s May 31 ruling.
Maryland Transportation Secretary Pete Rahn on June 1 ordered a halt to work on the project by Purple Line Transit Partners, the consortium that won the contract to build and then operate the system for 30 years, because the state would “no longer have sufficient cash flow” to continue without the $900 million federal grant.
Leon dismissed most of the environmental issues with his May ruling, leaving the disputed ridership projections as the sole subject for the additional review.
Eric Glitzenstein, the attorney for the trail advocacy group Friends of the Capital Crescent Trail and two residents of Chevy Chase, Md., who filed the lawsuit in 2014, contended that the new ridership analysis is necessary because Metro’s problems fundamentally changed the cost-benefit ratio for the Purple Line.
A new environmental review might find that opting for a bus rapid transit system rather than light rail could reduce the required federal funding, Leon said.
“Perhaps under a more modest approach it could cost $300 million, $500 million,” Leon said. “It could better protect taxpayers.”
Albert Ferlo, an attorney who represented the Maryland Transit Administration at the hearing, said reducing the project’s cost should not be a factor in deciding the lawsuit.
The state disagrees with Leon’s commentary from the bench during the hearing, said Erin Henson, a spokeswoman for the Maryland Department of Transportation.
“We don’t believe Judge Leon will have the last word on this incredibly important project for the Washington region and the state of Maryland,” she said.
President Trump’s proposed budget for fiscal 2018 would cut $1 billion from the New Starts grant program, eliminating transit projects such as the Purple Line that do not have a completed funding agreement.
However, the Purple Line was included in a list released by the FTA in late May of “other projects that may become ready for funding” with a New Starts grant in fiscal 2018 if the pending litigation is resolved quickly.