Crosstown project fails to draw a bid

  • Article by: LAURIE BLAKE , Star Tribune
  • Updated: June 17, 2006 - 12:23 AM

Requiring contractors to finance some of the work temporarily scared them away. Pawlenty ordered MnDOT to arrange a bid.

The long awaited Crosstown project was delayed again Friday -- how long is not yet clear -- because no road builders bid for the work.

The $250 million Twin Cities project was set to start in August but contractors walked away from the unorthodox financing plan, which required them to put up their own money to keep construction going between state payments.

Never before has a major Minnesota road project failed to draw a bid.

Short of cash, the Minnesota Department of Transportation hoped to sell contractors on the cost-shifting scheme as a way to jump start construction before it had all the money.

It planned to pay builders back as federal funds arrived.

Bidders didn't bite.

The Crosstown project would eliminate the metro's most notorious traffic bottleneck.

It would separate and widen the junction of Interstate Hwy. 35W and Crosstown Hwy. 62 on the border of Richfield and Minneapolis.

The interchange carries about 240,000 vehicles a day and clogs traffic in all directions at rush hour.

Gov. Tim Pawlenty told MnDOT to arrange a Crosstown bid as soon as possible.

"Our hope is that the potential delay would only be a matter of months," said Pawlenty spokesman Brian McClung.

But now that contractors appear unwilling to bet on future federal funding, some legislators said it's time to admit that MnDOT doesn't have the money to do the project.

"This administration needs to face the fact that they are broke, and we need a transportation package that puts real dollars into our roads and bridges," said Sen. Steve Murphy, DFL-Red Wing, chairman of the Senate Transportation Committee. He had advised MnDOT against the financing scheme.

Revamping the intertwined mile of the two freeways has been on the drawing board since the mid-1990s.

The project was finally scheduled to start this year, but rising construction costs and less than expected federal funding forced MnDOT to borrow $50 million from other projects to keep the Crosstown on schedule.

The next concern was whether even that extra money would be enough to cover rising costs for fuel, concrete and steel.

And then MnDOT announced another financial wrinkle: It would have to rely on contractors to front the money to bridge gaps between state payments, with the understanding that they would ultimately be paid in full.

The Federal Highway Administration endorsed the idea as worth a try, but contractors balked.

Attorney General Mike Hatch's office, and St. Paul Travelers, a company that insures highway builders, separately questioned its legality.

Abandoning plan resisted

In May, MnDOT resisted pressure to abandon the financial plan but delayed the start of the project from July 10 to about Aug. 1 to give competing contractors more time to prepare bids. MnDOT officials said they were optimistic that bids were coming.

When none appeared Friday, the Associated General Contractors of Minnesota said that shouldn't surprise anyone.

"MnDOT is out of money," said Dave Semerad, chief executive officer of the group. "There's no guarantee that the contractor is going to get paid."

Legislators weigh in

The absence of bids prompted political jabs. Some legislators blamed Pawlenty for not raising the gasoline tax to help fund the project.

"If Minnesota had any questions left regarding Governor Pawlenty's inability to handle our transportation crisis, this morning answered them," said Minnesota DFL chairman Brian Melendez. "His administration can't afford to pay contractors to repair our roads."

Rep. Dan Larson, DFL-Bloomington, said MnDOT's financing approach was a crazy, desperate move.

Rep. Ron Erhardt, R-Edina, said, "We are going to continue to have MnDOT failing to meet expectations until we get new money to them. I don't know what it takes for the administration to see that MnDOT needs money."

Sen. Dick Day, R-Owatonna, defended the governor.

Minnesota has had three consecutive years of record road construction, and if contractors don't want to bid on the Crosstown project, "that's the American way," he said. "We will just have to wait until the Department of Transportation and we all as a state can come up with enough money and do it the old-fashioned way -- with money in the bank."

McClung said, "this governor's administration has done more for transportation funding than any other in modern history. We would put our transportation funding record up against any governor anybody could name, and we've done that without raising taxes."

Rep. Mary Liz Holberg, R-Lakeville, suspects that contractors worked on bids but did not submit them because the bids were over the project budget.

She said it might be time to break the Crosstown into phases and build the parts MnDOT can afford now.

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