Feds, Maryland A.G. Slam 'Manifest Injustice' of Purple Line Halt

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DALLAS -- Maryland and Federal Transit Administration officials want a federal judge to restore funding for the $5.6 billion Purple Line light rail public-private partnership project that was shut down by court order in early August.

Maryland Attorney General Brian Frosh said in a memorandum filed Tuesday with the U.S. District Court for the District of Columbia that the shutdown is costing the state more than $13 million per month.

A prolonged delay of six months or more could result in a loss of state funds already expended on the rail line's 16-mile route through the Maryland suburbs of Washington, Frosh said.

"An extended delay could result in cancellation of the project altogether, which would deprive the state's residents of the substantial benefits of the Purple Line, cause the loss of all state funds invested to date, and trigger additional financial obligations under a public-private partnership agreement," the memo said.

Federal funding for the Purple Line was put into question with a ruling by District Court Judge Richard Leon on Aug. 3 that vacated a funding agreement between Maryland and the Federal Transit Administration for the Purple Line. Leon ordered a stop in the federal funding until state and federal officials develop new ridership estimates for the proposed line.

Leon's order came just days before a signing ceremony would have celebrated a full funding grant agreement with the FTA for a $900 million construction grant to the Purple Line.

Construction financing also includes $313 million of private activity bonds that were private placed in June by the Maryland Economic Development Corp. and an $873 million federal low-interest loan under the Transportation Infrastructure Finance and Innovation Act. Both received a BBB-plus from Fitch Ratings and S&P Global Ratings.

Purple Line Transit Partners, the consortium of engineering and equity firms selected by the state as the private partners in the Purple Line, plan to invest $138 million in the project's construction.

The partnership group, which includes Fluor Enterprises, Meridiam Infrastructure Purple Line, and Star America Fund, has agreed to a six-year, $2.01 billion fixed-price contract with a deadline for completion of the Purple Line.

The operators would receive availability payments of up to $150 million per year from the state through 2052 if the system maintains a 96% level of service. The state will retain all fare revenues from the Purple Line.

Leon's ruling was the result of a lawsuit filed in 2014 by Friends of the Capital Crescent Trail in an effort to stop the Purple Line on environmental grounds.

The judge agreed with plaintiffs in the case who contended earlier this year that recent major maintenance failures on the Metrorail system operated by Washington Metropolitan Area Rapid Transit would reduce ridership on the Purple Line.

Approximately 25% of the 74,000 passengers on the Purple Line by 2040 are expected to also use the Metro system for part of their journeys.

The judge erred in ordering a new ridership study and should have instead ordered federal officials to determine if Metrorail's maintenance woes warranted a revised passenger estimate, the FTA said in its motion.

"The court impermissibly substituted its judgment for that of FTA in making the ultimate finding that the information on WMATA Metrorail's issues presents a significant environmental impact," the FTA said, adding, Leon should alter his ruling to "correct clear error and prevent manifest injustice."

There is no need to revise the passenger estimates over environmental concerns, Frosh said.

"Substantially lower ridership on the Purple Line, even if it were to occur, would not increase the project's environmental impacts," he said.

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