South Station NOT on track

More than 18 months ago, state transportation officials announced a major federal grant that would enable them to expand South Station in Boston. But the state hasn’t tapped the funds yet, and it’s beginning to look like it may not happen for awhile.

The $32.5 million federal grant, drawn from high-speed rail stimulus funds, was supposed to pay for permitting and engineering work at the congestion-choked rail terminal. After an extensive delay on the federal side, the South Station project is now being dogged by delays at the state level. An agreement for acquiring project real estate has lapsed, and this week MassDOT’s board tabled a contract to fund expansion-related engineering and permitting.

South Station is the northbound terminal for regional Amtrak service, and for commuter rail traffic from the southern and western suburbs. The station is currently operating at capacity. Congestion puts a strain on traffic traveling in and out of the station. Capacity issues also serve as barriers to the state’s planned South Coast Rail expansion, and to a federal plan for beefing up high-speed rail between Boston and Washington, DC.

The $32.5 million stimulus grant, which was announced in late 2010, would begin to remove this bottleneck. The federal grant was intended to fund the planning, engineering, and environmental permitting necessary to expand South Station. The new tracks would be laid out on an 8-acre parcel that’s now home to a massive US Postal Service facility; the stimulus grant would advance the South Station project to the point where it would be eligible for a much larger slug of federal construction funds.

Although federal and state officials announced the South Station grant in October 2010, the federal transportation bureaucracy didn’t actually release the funds to the state until last September. By that time, financial turmoil inside the Postal Service had thrown the complicated land swap underpinning the rail expansion into turmoil.

MassDOT, Massport and the Postal Service all agreed in January 2011 to trade the Postal Service’s 8-acre Fort Point facility for a new South Boston building; the state would finance the Postal Service move, and acquire the staging ground for South Station’s expansion in return. But in September, the Postal Service, nearing insolvency, began reviewing its real estate holdings across the country, including whether it wanted to operate any kind of mail processing plant in Boston. The Postal Service ultimately decided in February to retain its Boston plant – the same plant DOT needs to acquire and level before expanding South Station. This decision likely put the state back on the hook for the Postal Service’s $200 million relocation. But the relocation agreement between DOT, Massport, and the Postal Service expired in January, leaving the sides without a formal roadmap for clearing the South Station expansion site. When the feds released the $32.5 million grant, it was clear who would move the Postal Service off their land, and who would pay for it. That’s no longer the case.

The state also hasn’t been able to begin planning and permitting work for the rail expansion because it doesn’t yet have a contractor to do this work. This week, the MassDOT board tabled a $36.5 million proposal to hire a contractor for the initial South Station work. The board has asked MassDOT staff to come back next month and brief them on the expansion plans.

MassDOT board member Liz Levin told CommonWealth that although South Station’s expansion is “a very important project,” the board had a number of questions about how MassDOT was spending the federal planning grant. For one, Levin noted, MassDOT’s contractor on the project, HNTB, submitted the high bid for the project. Levin also questioned how much of the contract would be devoted toward the actual transit component of the expansion, and how much would go toward enabling commercial air rights development over the new tracks.

“We have a responsibility to make sure the money goes as far as it can, that we’re doing the things we need to do, not the things we don’t need to do,” Levin said. “We asked them to come back and be clearer.”