Hwy. 53 project expected to outstrip its $160 million budget

The massive and complicated Hwy. 53 rerouting on the Iron Range is already expected to outstrip its $160 million allotment from the state and leaders are asking for more money to complete the project.

DFL state Rep. Jason Metsa, at the urging of his Virginia constituents, is seeking another $3.4 million to help the city move utility lines after discovering that aspect of the project will cost more than city officials estimated.

The new re­quest comes less than a year after state officials pieced together the last of the $160 million in state bonding money needed for the project.

Virginia is on the hook for moving the utilities and without the money the city of about 8,600 could face fiscal problems as it also deals with the consequences of a historic mining downturn, said Mayor Larry Cuffe Jr.

But Virginia's need for new money will bump up against requests from leaders of hundreds of cities and townships, each of whom sincerely believes their own project is worthy of this year's bonding money, which lawmakers are mulling over this session.

DFL Gov. Mark Dayton has proposed $1.4 billion in state borrowing, but Republicans are pushing for far less, in some cases half what the governor is seeking. That has created intense competition for every dollar.

Dayton is going to the Iron Range on Friday and will tour the project.

A frantic search for a solution culminated last fall, when work began rerouting the highway around the mining operation and across a water-filled quarry just east of Virginia via a newly constructed bridge more than 1,000 feet long.

Total cost is expected to be $220 million, with the project scheduled to open November 2017 if all continues apace.

Meanwhile, Cliffs has shuttered its mining operation on the site because the global glut of steel has decreased the demand for iron ore.

Although moving the highway is a state project, Virginia is responsible for rerouting utilities, including water, gas and sewer lines to tiny Midway township south of Virginia proper — 310 homes that would be otherwise cut off because of the project. Once thought to be a $13 million project, it's now likely to cost more than $16 million, said Cuffe, the Virginia mayor.

If successful, the state would be spending nearly $5,300 per home, just to move the utility lines.

Patrick Huston, the Department of Transportation project director, said the technical complexity and aggressive timetable to meet the contractual obligation with the mining company make it altogether different. "This project is not like anything we've ever done," he said.

As for the increased cost to move the utilities, he noted the rapid timetable: "You tell a contractor you want your house done in two months, it costs more," he said.

And, given the fast schedule and immense engineering challenge of building the bridge, the agency was stuck with many unknowns, including cost, which ranged from $180 million to $240 million, Huston said. So, the $3.4 million is not significantly off, he said.

Metsa said without help from taxpayers around the state, the city is in a bind. "The city of Virginia can't afford to do it," he said.

Rep. John Petersburg, R-Waseca, said the state was obligated to move the road given the situation with mining rights, but he said Virginia's bid to move the utilities would have to compete with all the other bonding projects proposed by all 201 lawmakers, most of whom are up for re-election this year and want to bring something home.