Seawall could sap funding for bridges and bikes

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The seawall budget overruns could bleed money away from other projects like bridge repair and the bike master plan.

In city government, money is often a zero-sum game. So with the revelation that the seawall replacement project is both over budget and behind schedule comes the reality that something else will likely suffer.

According to Seattle Department of Transportation Director Scott Kubly, that something will probably be road maintenance, bridge repairs and Seattle’s bike master plan. The city is pledging not to raise additional taxes.

Waterfront businesses like Ivar’s are also on the edge of their seats as they wait for a meeting next week to discuss what this means for the months and years ahead.

The voter-approved seawall replacement, which closed waterfront businesses like Ivar’s for the better part of a year, was former Mayor Mike McGinn’s biggest parting piece of business. The project was scheduled to be finished late this year and, until Friday, was largely hailed as a mostly on-schedule and mostly on-budget waterfront success that (slightly) balanced the failures of the tunnel project.

Councilmember Tom Rasmussen, chair of the Seattle City Council's Transportation Committee, said that the delay is both surprising and disappointing. In recent SDOT briefings to the council, he said, "There was no indication that something so significant as a cost like this was possible nor that there would be a year’s delay."

Friday's announcement of a delay, however, comes as no surprise to Ivar’s President Bob Donegan. “Those of us on the waterfront who talk to the seawall team are disappointed but not surprised,” he said. “We’ve seen how long it’s taken for them to get stuff done. We knew it was only a matter of time before they announced a delay.”

Kubly told Crosscut Friday that the conditions along the waterfront were more challenging than previously expected. Grouting difficulties as well as poor soil conditions and the challenges of traffic control meant the tab for the seawall was ticking upward at a much faster pace than it should have. The final estimate is now $409 million, about $70 million higher than the most recent previous estimate and more than $100 million higher than the original budget.

In a statement Friday, Mayor Ed Murray seemed to seek to deflect attention to former Mayor McGinn, without naming him, by calling the level of financial risk placed on the city in the original contract “unfortunate.” The statement noted that the City agreed to the contract in November 2013 — which was about two months before Murray took office.

The city first noticed in June that the costs of grout waste removal were running higher than expected. Officials spent July confirming what they saw. In response, the city has elected to intentionally delay portions of the project to figure out how to pay for it.

Mayor Murray on Friday laid out options for funding the remainder of the project, carefully emphasizing that the city would not raise taxes. Among these paths include using money from the city’s Real Estate Excise Tax (REET), a tax on real-estate transactions, and saving money from commercial parking taxes in order to increase bond capacity. The city will also, in the meantime, expand the number of on-street parking spaces along the waterfront, which will collect additional parking fees to be used on the project throughout the delay.

Murray also said he is going to hire an outside inspector to examine what’s gone wrong.

Because the city budget for 2016 hasn’t been sorted out yet, Kubly could only speak generally about what may suffer as a result of these cost overruns. But money from REET and commercial parking tax, he said, “typically goes to things like bridge repair, road maintenance and the bike master plan.”

Eugene Wasserman, president of the North Seattle Industrial Association, has been a vocal opponent of Seattle’s upcoming $930 million Move Seattle levy to fund transportation. He said that if bridge maintenance suffers as a result of seawall delays “that would not be a good thing. This whole seawall thing has been a mess.”

Wasserman added that, while he respects SDOT’s Kubly, he doesn’t believe that this is a recent revelation. “I believe — without any proof — that they withheld it,” he said, promising the he was going to do a public records search. “This is really pretty bad. I’m surprised [Kubly] didn’t know about it until now.”

As far as what the delay means for businesses, that’s still to be determined. Donegan said the city and waterfront businesses are scheduled to meet next week to work out the schedule for 2016 and 2017. “Our concern is the agreement we signed said the seawall would be done July 1st 2015. And as you know, there’s still a trench between Pier 52 and Pier 57.”

One tricky part for construction crews will be that keeping businesses open means the city has to maintain pedestrian bridges and keep noise levels down. That slows down the work. But to close businesses, as the city did last winter and spring, would mean more city money spent to keep them afloat. Ivar's Donegan said, "We, of course, will be fine. We’ve got our other locations. But solo places like Pioneer Jewelry or the Ye Olde Curiosity Shoppe really have no place else to go.”

Councilmember Rasmussen showed a waning confidence in the SDOT as result of this announcement.  "It has raised the question of SDOT’s management of this project," he said. "They have a lot of explaining to do."

With the Move Seattle levy coming this November, the seawall hiccup could also raise the question of voter confidence in the city's ability to effectively complete projects. But Kubly said the seawall, as the most complicated project SDOT has ever done, is an exception to the rule. “In the previous Bridging the Gap [transportation levy],” said Kubly, “we met or exceeded every goal but replacing all the guard rails.”

The $365 million Bridging the Gap levy expires at the end of this year, with the city hoping voters will approve the Move Seattle levy as a replacement. Asked if the Move Seattle levy might somehow become a source of funds for finishing the seawall, Kubly gave a resounding “No.”


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About the Authors & Contributors

David Kroman

David Kroman

David Kroman is formerly a reporter at Crosscut, where he covered city politics.