NEW ORLEANS -- When the Loyola Avenue streetcar opened for business just days before the city hosted Super Bowl XLVII, New Orleans Mayor Mitch Landrieu assured a crowd that it was not a “line to nowhere.”
Critics had questioned the new streetcar’s value as a connection from vibrant Canal Street to the little-used Union Passenger Terminal, but for years city leaders had a ready answer for the doubters: That the project won a competitive U.S. Department of Transportation stimulus grant of $45 million and would not cost local taxpayers a dime.
But a review of project finances shows it cost far more than the federal grant covered, and even significantly more than the $52 million transit officials reported at the completion of the project.
Moreover, while the Loyola line has exceeded expectations when it comes to ridership, much of the increase is due to the fact that the Regional Transit Authority altered bus routes to force riders onto the streetcar, transit advocates say.
The RTA estimated in 2010 that the Loyola streetcar would draw 1,000 to 1,400 riders a day, and it’s already averaging about 1,700 a day.
But Rachel Heiligman of Ride New Orleans, a nonprofit public transit advocacy group, said that because the RTA cut off the downtown segments of the Freret and Martin Luther King buses at the Union Passenger Terminal, those bus riders now must transfer to the Loyola streetcar if they want to get to Canal Street.
“What we’re doing is really just shifting the ridership from one mode — the bus — to the streetcar,” Heiligman said.
After those bus routes were cut off at the UPT, the RTA’s ridership data show both lost riders, suggesting that customers unwilling to transfer to the Loyola streetcar stopped riding altogether.
The Freret Number 12 bus lost 76,000 riders in 2013, a 40 percent decrease from the year before. The MLK Number 28 bus was down by about 5 percent, while overall RTA ridership was up 12 percent.
“There’s a lot of value that the streetcar system... brings to the city,” Heiligman said. “But it is important to be aware that in certain cases they do create inconveniences for folks who are dependent on public transportation and very reliant on our bus network.”
As for the final price tag for the Loyola line, RTA records show it was more than $60 million, a third higher than the original budget, which was based on engineers’ estimates in 2010. The RTA had to use $15 million of a $75 million pot of local bond and reserve money that was originally set aside to extend the Loyola spur eastward along Rampart Street and St. Claude Avenue to Press Street.
Instead, that second phase will only extend to Elysian Fields Avenue.
Contractors overseeing and working on the Loyola Avenue portion of the project got more than a dozen change orders approved by the RTA, including one as recently as Feb. 25, more than a year after the streetcars began running.
The reasons for the cost overruns point to an even larger problem for New Orleans: decrepit infrastructure and poor mapping of its whereabouts.
The main construction contractor on the Loyola streetcar project, Archer Western Contractors, filed and received approval for seven price increases totaling $9.8 million, all because of “differing site conditions.”
In other words, what they found 14 feet underground often did not match what was marked in the city’s as-built drawings and, even if an item was noted in the plans, it was often falling apart.
Officials from Veolia Transportation, the RTA management company, said contractors stumbled on everything from crumbling water mains to unexpected underground drainage canals; sewer and power lines in the wrong spots; an old icehouse cellar that was leaking ammonia; even a petrified tree stump. Each surprise contributed to delays, which caused contractors’ overhead costs to increase.
“The Regional Transit Authority relied on professional engineering firms that provided plans based on information available at the time of design that included existing as-built drawings of the corridor,” Veolia spokeswoman Patrice Bell Mercadel said in a written statement.
The numerous delays put the project — situated in the center of the city’s sports tourism area — more than a year behind schedule, meaning it wasn’t going to be done in time for the Super Bowl in February 2013. The Landrieu administration made it clear that wouldn’t stand, so the RTA paid premiums to speed up the work and get it done just under the wire, Veolia managers said.
In 2012, the change orders spiraled out of control, so much so that in November 2012, the RTA management committee asked Archer Western to come up with a single request to cover all unplanned costs through the end of the project.
Archer Western said $4.3 million would cover it, especially after eliminating about $1 million worth of planned work. The RTA granted an increase “not to exceed” $4.3 million.
But in May 2013, after the streetcars were up and running, Archer Western got another $3.4 million increase, again citing unexpected costs.
Entergy, which was brought in to do $1.4 million worth of work moving their underground lines, cost the project time and money early on by failing to deliver services by a certain deadline, Veolia managers said. And the utility also got an extra $680,000 on Feb. 25, 2014, because of unexpected work moving underground facilities.
“With any large project, changes and delays are inevitable and certain challenges arise that maybe you didn’t see before things start or until you really get in and see what’s going on, especially when you’re working underground,” said Charlotte Cavell, spokeswoman for Entergy New Orleans.
Many of the same consultants and contractors are also involved in the Rampart streetcar expansion project, which is underway but has already experienced delays. AECOM, the project engineers for the Loyola and Rampart projects, got an extra $300,000 for the work because it has been held up by debates over whether to create a dedicated streetcar lane on Rampart Street, which studies show would cause huge traffic problems.
Veolia managers said all involved are trying to apply the lessons from the Loyola project to the Rampart expansion and beyond.