Mayor outlines plan to pay for tunnel

Seattle Mayor Greg Nickels, making his case for a tunnel replacement for the Alaskan Way Viaduct, took his pitch Thursday to an expert review panel with the most detailed financing proposal he's presented so far.

The proposal, which would include money from tolls and taxes from landowners whose property values would go up, won Nickels immediate praise. But it also prompted questions about the feasibility of his plan, which is the most expensive option for replacing the aging and earthquake damaged structure.

Nickels' deputy, Tim Ceis, told the eight-member panel that there are potential sources for an additional $2.6 billion in federal, regional and local money to help finance the six-lane tunnel Nickels wants. That, in addition to the $2.4 billion already committed or spent by the state and other sources, would bring the total possible amount to more than $5 billion -- more than enough to pay for a tunnel.

But none of the $2.6 billion is certain.

The panel is to report to the Legislature and Gov. Christine Gregoire by Sept. 1 on whether members think there's enough financing to replace the 43-year-old viaduct, damaged in the 2001 Nisqually Quake. Some want to repair the structure, part of state Route 99, but state engineers fear that the structure could collapse in another major quake.

Building a new, elevated highway, which would be wider than the existing structure, is estimated to cost $2 billion to $2.4 billion. A tunnel is projected at $3.1 billion to $3.6 billion.

The additional $2.6 billion in the city's revenue package assumes the project will get as much as $280 million in additional federal highway money, up to $200 million from the Army Corps of Engineers for the Elliott Bay sea wall, $200 million from the Port of Seattle and perhaps $800 million more in regional taxes.

The regional taxes would come only if voters approve a transportation-improvement package to be offered next year by the Regional Transportation Investment District. The $800 million has been discussed by the agency as part of that package but has not been approved yet for inclusion on next year's ballot.

The mayor's package also said a toll on the tunnel could raise $150 million over 20 years.

The additional $2.6 billion also includes up to $400 million in city utility contributions -- the cost of relocating water and sewer lines if the viaduct is replaced. Ceis said the final amount would require increases in residents' sewer bills and drainage assessments but the amounts of the increases haven't been determined.

The total also would include an assessment by a Local Improvement District that could raise $250 million over 20 years from landowners whose property values would increase if the viaduct is torn down; that requires the endorsement of owners of 60 percent of the affected properties. Money also would be collected via developer open-space fees if City Council members approve.

Ceis said the $2.6 billion estimate includes estimates "at the high end," with the package aimed at showing the review panel that even if less money comes from the sources than expected, there's enough to cover the tunnel Nickels favors.

City Councilwoman Jan Drago, who chairs the council's Transportation Committee, said the mayor's plan "looks reasonable and feasible to me." She said a Local Improvement District could easily raise more than $250 million and that a recent LID to finance the Lake Union streetcar was a success.

She said she'd hoped greater amounts of federal money might be won than the $540 million Nickels envisions. About $217 million in federal money has been obtained so far.

But Council President Nick Licata, a critic of the tunnel idea, questioned the toll figure, saying state studies showed little money would be raised by tolling viaduct drivers because many would simply drive elsewhere. He also said the utility-relocation figure appeared higher than other estimates he'd heard and wondered "is that really a revenue source, because that's a cost."

He said the $800 million in Regional Transportation Improvement District money "is not a slam dunk and this could become a controversial part of the RTID (package)" because taxpayers outside Seattle might be less inclined to support a tunnel project they might not use.

"I would not like to see the RTID voted down because of opposition to the tunnel project," he said.

State Rep. Ed Murray, D-Seattle, chairman of the House Transportation Committee, said he's skeptical about how much federal money the city can get. "Federal money has not been pouring into the state for roads."

Expert panel members, who will render judgments about the finances for the viaduct and 520 Bridge project, did not rate the city's plan at Thursday's meeting. Members said they'll try to discern at later sessions how solid the figures are.

"The real answer is the likelihood of all those funding sources," said panel member Lee Baker, a civil engineer and project manager for a private firm.

P-I reporter Larry Lange can be reached at 206-448-8313 or larrylange@seattlepi.com.

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