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Tim Talk: Time to think again about expensive rail projects

Tim Hunt
Tim Hunt.

Reports released this month show that public transit systems, such as BART, that traditionally have been funded by fares paid by users will be in deep trouble financially once the federal virus bailout funds dry up.

BART, reflecting the sharp drop in people working in offices in downtown San Francisco, has run at about 40% of its pre-pandemic ridership. That mirrors the “return to the office” in the City that has been much slower than in other major metropolitan regions in the country. Commercial real estate leases and asset values have been dropping.

BART directors are considering a 5.5% fare increase next January and then another hike that July that would reflect increased costs from inflation and the need for more revenue.

The challenge is predicting the future and whether there will be a mass return to the office in downtown San Francisco where tech companies have been shedding both office space and employees.

Downtown San Francisco has the highest office vacancy rate in the country and it’s increasing as companies re-evaluate their real estate needs in these days of hybrid work. It is a major concern for San Francisco that is launching initiatives to help the area regain vitality.

Another report, looking further out, questioned whether the BART system could survive without another ongoing subsidy from residents. BART already receives ½-cent of the sales tax as well as a portion of the bridge fares.

This would be yet another revenue source. BART potentially faces a $300 million hole in its budget from lack of fare revenue by 2025. The Metropolitan Transportation Commission, which doles out federal funds to agencies, is starting to float the idea of a funding measure on the 2026 or 2028 ballot.

The hard question that needs to be asked is what will the future bring in terms of central office districts? BART was designed and built to move people from the suburbs into downtown San Francisco and Oakland. When the suburban office expansion hit in the 1980s, BART lines started serving riders going in both directions at peak hours, but the suburban stations never came close to the volume of the downtown stations.

The question is particularly important because of the hugely expensive capital projects. BART has been extended into Santa Clara County and the final 6-mile phase to connect with the CalTrain station downtown carries an estimated cost of $6.9 billion. Federal money from the infrastructure bill already has been designated for this project. Google is redeveloping an area for 2,000 homes and 20,000 jobs but it has slowed its plans.

Where’s the reality check asking whether it’s worth the money. The absurdly expensive bullet train is supposed to connect at that station before running up the Peninsula in the CalTrain corridor.

A final piece of the puzzle is extending the CalTrain tracks into the Salesforce Transit Center downtown—another tunneling project for both CalTrain and the high-speed rail. That’s another billion dollar project.

It’s notable that newly opened San Francisco 1.7-mile underground T-Muni extension to Union Square and Chinatown has attracted way fewer riders than the projections. That cost $1.89 billion, more than $184 million over budget.

Instead of jamming these forward, it’s time for several deep breaths and reconsideration of these plans.

Times have changed.

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