LA Metro OKs $24 billion transit tunnel through Sepulveda Pass

Eric Thayer/Bloomberg

The Los Angeles County Metropolitan Transportation Authority last week approved an underground heavy rail plan developed by infrastructure finance firm Meridiam for its long-planned Sepulveda Transit Corridor project.

The Sepulveda Transit Corridor connects the San Fernando Valley with L.A.'s Westside across the Santa Monica Mountains. The corridor would offer an alternative to Interstate 405, a 14-lane freeway that's considered one of the most congested in the country, cutting travel times from 60-90 minutes to under 20 minutes, officials said.

After weighing several alternatives, the board last week opted for an automated underground subway line over other options that included a monorail. The preliminary capital estimate totals $24.2 billion in 2023 dollars, a price tag that will be updated to reflect modifications, the agency said in a Jan. 22 board report. Only a small piece of the funds, around $2.5 billion, has been identified so far. "However, at this early phase of project development, this is not uncommon," the report said.

Among Metro's next steps will be to decide whether to deliver the project as a design-build-finance-operate-maintain public-private partnership.

Metro in 2021 entered into pre-development agreements with two consortiums to develop various alternatives. It marked the first time that a U.S. transit agency used a PDA, which allows a government to bring in a private partner early to help design a project, identify risks and craft a budget while pursuing environmental reviews and approvals.

The teams proposed six alternatives including monorail and heavy rail trains and running approximately 13 and 16 miles in length.

The chosen alternative, which includes Metro's modifications, was developed by Sepulveda Transit Corridor Partners, comprised of Meridiam Sepulveda, LLC, Bechtel Development Company, Inc., and American Triple I Partners, LLC.

The team is now "actively pursuing the opportunity" to enter into a full DBFOM delivery if Metro opts for a P3, the agency said in its board report.

Los Angeles County voters in 2016 approved transportation sales tax measure that is expected to generate about $2.54 billion for the project, said Metro's chief planning officer Ray Sosa in a Jan. 20 column in the LA Times. "Metro anticipates the need for additional funding and financing for the project, including from federal, state and local sources, as well as from private investment through a potential public-private partnership," Sosa said. "Those are eye-popping numbers to be sure, making the Sepulveda Transit Corridor L.A. Metro's largest project to date."

Metro, which has been planning the project for at least 10 years, dubs it one of the most ambitious transit projects in the country and says it would reduce greenhouse emissions, connect residents with jobs, and offer a badly needed alternative to a car-dependent region.

If developed as a P3, Sepulveda would mark only the third use of a nontraditional procurement project in U.S. transit. The other two were the Denver Eagle FasTracks Project and Maryland's Purple Line light-rail project, both of which faced their share of delays and problems.