The signing of a Full Funding Grant Agreement (FFGA) is considered the capstone of a years-long process in which state or local officials seeking highly competitive federal construction grants must meet requirements governing a transit project’s design and funding. It’s also the financial certainty that developers — and, more importantly, their banks — often wait to see before investing in new building around future light-rail stations.
Maryland officials have said they’re seeking $900 million in federal construction grants to pay for nearly half of the light-rail line between Montgomery and Prince George’s counties. Total construction is estimated at about $2 billion. The state’s reaching of such an agreement with the Federal Transit Administration was considered more a matter of when than if. Congress has already appropriated about $203 million to the project, and the Obama administration requested $125 million for the Purple Line in its proposed fiscal 2017 budget.
Congress must appropriate the money annually, but state and federal officials have said Congress routinely abides by such agreements.
Spokesmen for the Maryland Department of Transportation and the Maryland Transit Administration did not immediately return an email seeking comment late Thursday afternoon. An FTA spokesman said the agency would not comment on the agreement during its 30-day congressional review. The FTA submitted the document for review July 6, according to an official familiar with the congressional review.
State officials have said they would grant contractors full “notice to proceed,” or permission to start major construction, soon after the state signs the federal funding agreement. State officials have said major construction will begin this fall, with the line opening to passengers in spring 2022.
The Purple Line project is governed by a $5.6 billion public-private partnership in which a team of companies called Purple Line Transit Partners will help finance construction, build the line over six years, and then operate and maintain it for 30 years.
The funding agreement will set an annual payment schedule and be the federal government’s multiyear “contractual obligation,” according to the FTA’s website. In exchange, the agency said, the transit project’s state or local sponsor “commits to completing the project on time, within budget and in compliance with all applicable federal requirements.” It also locks in the maximum federal funding, meaning any cost overruns would be paid by the state or local governments.
The FTA considers projects ready for such an agreement when they have shown “sound capital cost estimates, firm local funding commitments, and a strong project management team,” the agency said.
Sen. Barbara A. Mikulski (D-Md.), vice chairwoman of the Senate Appropriations Committee, said in an email Thursday that she had “fought hard” for the project’s congressional appropriations and that “today the remainder of the $900 million is guaranteed by the federal government. This will ease congestion, revitalize communities and improve our state’s transportation infrastructure.”
The Purple Line will run trains powered by overhead electrical lines along the Georgetown Branch recreational trail between downtown Bethesda and Silver Spring and then along local streets through Langley Park, the University of Maryland’s College Park campus, Riverdale Park and New Carrollton. The line will have 21 stations, including four Metro stations. It’s designed to be the first direct rail link between Washington-area suburbs and will connect Maryland Metrorail lines with Amtrak and MARC commuter rail stations.
Lori Aratani contributed to this report.