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Potomac Yard Metro station is over budget and behind schedule

Rendering of the Potomac Yard Metro station. (City of Alexandria)
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The Potomac Yard Metro station is going to cost $52 million more than previously estimated and might not open for passenger service until 2022, Alexandria city officials said this week.

Alexandria and Metro blame increases in the cost of building materials and labor, saying the previous price tag was based on 2015 construction costs.

“Clearly we would have preferred to pay a lower cost as was estimated in 2015 … but we are still in a solid position to move forward with this new station,” said Craig T. Fifer, chief spokesman for the city of Alexandria, which is paying for construction of the now $320-million project.

The cost of labor is up as a result of a shortage of qualified subcontractors because of high demand for major projects in the region and nationwide, officials said.

“A lot of construction projects are competing for the same specialized subcontractors,” Fifer said. “The price of concrete has gone up, the price of steel has gone up. And so basically the projections made in 2015 are not exactly the same as the bids that have come back.”

Potomac Yard Metro station delayed again

The Alexandria City Council is expected to review the project Tuesday and weigh approval of a new funding agreement with Metro, which will allow the transit authority to award a construction contract this spring.

The station will be built on Metro’s Blue and Yellow lines, between the Braddock Road and National Airport stations. It is expected to boost mass transit along the Route 1 corridor in Alexandria, breaking up a 3.1-mile stretch that is the longest inside the Capital Beltway without a Metro station.

Because the construction will be done between rail stations, it requires specialized subcontractors who can work on a live system, Fifer said.

This will be Metro’s second construction of an infill station, after NoMa-Gallaudet U in 2004.

Bids received a year ago exceeded the project’s initial budget, officials said. Metro, which is leading the procurement process and will oversee construction, asked bidders to find savings and resubmit proposals. In February, bidders resubmitted with design changes, bringing down the cost but still leaving it over budget. The transit agency is reviewing those plans.

Metro spokeswoman Sherri Ly referred all questions about the project to Alexandria.  It is unclear what the proposed design changes will be, but they will need to be revised by various agencies, including the National Park Service, which owns land near the station site, Alexandria’s Planning Commission, Board of Architectural Review and City Council.

As with most major transportation projects in the region, the cost for the Potomac Yard station could mount again if the approval process isn’t completed on time for construction to begin this fall.

“We obviously don’t want the process this year to take too long or else the cost may change again because that is how the construction market works,” Fifer said. “We need to make sure that the project stays on track.”

The revised project budget of $320 million represents a $290 million agreement for construction and $30 million in additional costs to the city, including project management and related construction, Fifer said.

Alexandria plans to cover most of the cost.  Three years ago, the city settled on a $268.1 million option for the station. That price tag already exceeded earlier project estimates of $240 million, which was made before a location and design option were picked.

Fifer said the 2015 estimates also suggested the project could cost up to $315 million, which puts the new budget in proximity to that range.

The project will be funded through a variety of sources, including new tax revenue primarily from development around the station, regional transportation authority grants, developer contributions and revenue from a special tax district. Officials say the city has been working to secure more loans and grants for the project and was able to shift some of the source of funding from bonds to lower-interest loans. This will help the city reduce its debt related to the project.

Staff members are also asking the city council to revise the funding plan for the project, which includes two special tax districts. The first tax district took effect in 2011, covering commercial properties in the north and central areas of Potomac Yard. The second, which includes residential properties in the southern end of Potomac Yard, is not scheduled to take effect until the station opens. The city wants to eliminate that tax district and instead get the funding through payments it expects from Dominion Power as part of a new underground power line the utility is planning to build in the Potomac Yard neighborhood.

The Metro station is a crucial part of the city’s vision for Potomac Yard, a 295-acre former railroad yard immediately south of the airport and downtown Washington, which is being transformed into an urban center with residential, commercial and office development. Officials say the Metro station will accelerate development and yield millions in tax revenue in an area where growth has taken off with the construction of hundreds of rowhouses and apartments.

Construction is expected to begin by the end of the year, and operations in late 2021 or early 2022, city officials said.