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500,000 tons?! Is this a misprint?
Unless the Portland Office of Transportation comes up with $13.4 million soon, the controversial aerial tram project will run out of money and grind to a halt in six weeks.
The department, which is managing the tram project, is expected to spend the $40 million pledged to the project by the end of April. Unless the Portland City Council authorizes more funds for the project by then, the transportation office will not have the money to continue buying materials or to pay the workers building the tram, which will connect Oregon Health & Science University’s new building in the South Waterfront area with its facilities on Marquam Hill.
No one involved in the project seriously expects the work to stop, however. Officials with the Portland Development Commissioner, South Waterfront property owners and OHSU are still discussing how to bridge the funding gap that occurred when cost projections grew from $40 million to the current estimate of $53.4 million.
City Commissioner Randy Leonard, who is adamantly opposed to spending any more city money on the project, believes OHSU will come up with the money needed to finish the project.
“It’s OHSU’s tram. If they want it, they’ll pay for it,” Leonard said.
Homer Williams, the lead developer on the project, agrees that could happen — but says OHSU could then sue the city for part or all of the additional costs.
“Of course it will be finished. But that doesn’t mean the city won’t end up paying for it,” he said.
Mark Williams, the OHSU official in charge of the South Waterfront project, refuses to say what the teaching hospital is considering — but says OHSU believes the city “has an obligation” to help finish the project.
Even though the gap remains, work on the project is continuing unabated. For example, huge steel sheets are being cut and welded into support towers for the Oregon Health & Science University tram at a metal fabrication shop across the Columbia River from Portland in Vancouver, Wash. According to John Rudi of Thompson Metal Fab Inc., the completed towers will weigh more than 500,000 tons.
At the same time, seven large shipping containers full of specialized tram parts built in Switzerland are traveling across the ocean to Portland on four freight ships.
By the end of May, thousands of tons of fabricated steel will be ready to be attached to the reinforced concrete bases of the lower station, middle tower and upper station of the tram.
But the city has pulled the plug on a major construction project before. After spending more than $4 million on planning to replace the open reservoirs in Mount Tabor and Washington parks, the city canceled the project in response to public criticism — the same kind of criticism now swirling around the tram project.
At a March 14 public forum on the tram, dozens of Portlanders criticized the project and its escalating costs, questioning how the city could even consider completing it when the schools are facing a financial crisis.
A majority of the council balked at one possible solution last Thursday, in large part because it called for the city to increase its share of the tram costs from $3.5 million to $9.4 million. Both the original and additional amounts would come from so-called tax increment funds generated by increased property values in the development district.
Homer Williams and other investors promised to accelerate the district’s projected property value increases by starting construction on two new condominium towers ahead of schedule — one late this year and the other early next year.
Williams also promised the investors would guarantee city urban renewal bond payments if the property value increases fell short. And OHSU also offered to increase its share of the project from $24.75 million to $30.75 million.
But Commissioners Leonard, Dan Saltzman and Erik Sten said the investors were not contributing enough to the tram under the proposal. Sten believes the investors are making huge profits on their projects and should contribute cash to the tram. Williams said the three commissioners don’t understand how the business world works.
“We’re promising to seek and secure $250 million in bank financing to increase the value of the district by that amount. Everyone knows the real estate market is changing and if it goes down, we’re on the hook for all the payments. To say we’re not contributing enough, well, that’s just not fair,” he said.
Leonard suggests OHSU and the investors are trying to blackmail the city.
“They say all the steel has been bought and all the preparations are complete and all they need is just a little more money from us. I feel like if I go along with that, I’m rewarding bad behavior,” he said.
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