The Oregon Department of Transportation said it might pare down or postpone two major Portland-area freeway projects, as it faces financial woes made more urgent by an order from the governor to delay plans for freeway tolling.
ODOT said as project costs have risen and its own anticipated revenue sources have dwindled, it’s now short at least $2.6 billion to complete all its planned freeway projects.
Instead, it will seek approval from the state transportation commission for a modified finance plan, more state funding to complete existing construction projects and delaying or suspending work on two of the biggest.
The delayed projects are:
· The Rose Quarter project, which would add lanes to a congested section of Interstate 5 that connects to interstates 84 and 405. The revamp is now estimated to cost about $1.9 billion dollars, nearly four times original forecasts. The project includes plans to cover the freeway to reconnect Lower Albina, a historically Black neighborhood divided and partially razed for the construction of I-5 in the 1950s. Construction was expected to begin in 2025.
· The second phase of an Interstate 205 revamp that would add a lane to the freeway and make seismic upgrades. The state agency has already begun work on the first phase of the project, which includes the replacement of the Abernethy Bridge in Oregon City. In total, that project is expected to cost up to $1.36 billion.
The agency had counted on tolling to fund a portion of multiple major freeway projects, but a mandate from the governor earlier this year threw a wrench in those plans. Gov. Tina Kotek in May directed ODOT to wait until at least 2026 to implement tolls, including plans to charge drivers by the mile on interstates 5 and 205.
Travis Brouwer, ODOT’s assistant director of finance, attributed the financial deficit to an increase in construction costs, additions and delays to the Rose Quarter project, and ODOT’s early cost estimates coming in too low.
He said the agency underestimated price tags in part because it had to rush funding plans before the projects were fully fleshed out. The Rose Quarter in particular, he said, was hurried to meet Legislative deadlines.
The transportation agency says it’s already poised to spend up to $1.08 billion of $1.1 billion allocated by the Legislature for several major freeway projects – without starting construction.
It had planned to tap tolling revenue, but by the time tolling begins in 2026, the projects would already be $300 million in the red. The state would have to pull that money from other funds, including those set aside for repairs and seismic upgrades to state bridges.
The state agency already faces financial troubles elsewhere in its budget, with dwindling gas tax revenue pushing ODOT closer to a deficit that could force widespread maintenance and staff cuts.
Local transportation and climate activists said ODOT’s concession this week proved what they had long argued: that the agency needs to pare down its spending on freeway projects.
“These are both massive victories for any Oregonian who enjoys clean air, safer streets, a hospitable planet, and fiscal responsibility from their state government,” said Chris Smith, cofounder of the climate action group No More Freeways, in a written statement.
The pause could also disrupt plans to restore the Lower Albina streetscape with freeway covers. Brouwer said adding freeway covers would be a “massive undertaking” that would require rebuilding the freeway and overcrossings to support the covers.
“I’ll have a conversation with the project team, but we haven’t contemplated a scenario where we move forward with the cover absent the reconstruction of the freeway,” Brouwer said. “It’s difficult to move forward with one without the other.”
ODOT adopted the plan for freeway covers after drawn-out disagreements between community organizations and local government agencies involved in the project.
Albina Vision Trust, a nonprofit that’s guiding the redevelopment of Lower Albina, and the city of Portland left the project in 2020 arguing that early plans for repairing the neighborhood were inadequate.
They returned to the project after then-Gov. Kate Brown stepped in and proposed an alternative that would allow the project to move forward while also supporting the redevelopment effort.
ODOT will present its draft financial plan to the Oregon Transportation Commission on Wednesday, and seek more funding from the statewide board, before submitting the plan to Kotek on Saturday. The meeting will be streamed on YouTube, and the transportation commission is taking public comments.
—Jayati Ramakrishnan; jramakrishnan@oregonian.com
