A $50 million land deal that would allow for the expansion of a vital transportation corridor in central Denver may become a casualty of coronavirus-caused belt-tightening at the Colorado Department of Transportation.
In February, CDOT and Union Pacific reached a preliminary agreement for the state to buy a 59-acre abandoned rail yard just south of downtown Denver.
CDOT intended to use the land to re-route an existing rail line that’s directly next to I-25, which would free-up space for a future expansion of the interstate. The land could also be used to allow for downtown access for a potential future commuter rail line, and for the Regional Transportation District to add capacity to its busiest light-rail corridor.
But CDOT now is anticipating at least hundreds of millions of dollars in lost revenue, which means some projects will have to be cut, downsized or delayed. At an “emergency” CDOT commission meeting Thursday, commissioner Karen Stuart asked staff if the Burnham Yard project was “still on the table.”
"I think that's something you all will need to discuss,” CDOT Executive Director Shoshana Lew replied, after a long pause.
Commissioner Don Stanton, from Arvada, said he was “very doubtful” CDOT could afford the project now. Kathy Hall, who represents the Grand Junction area, said it should be put on hold.
“We’re going to have to go bare-bones,” she said.
Commissioner Shannon Gifford, from Denver, said Burnham Yard may cost CDOT less than $50 million in the long run -- if the agency can sell off unused pieces of land to private developers. She said the agency should try to work with Union Pacific to extend the project’s timeline and keep it alive.
"There aren't any other buyers out there that are going to be able to move on this right either. So I think it's at least worth exploring the possibility of putting this off,” she said.
Union Pacific spokeswoman Kristen South said the potential delay in the deal is not unexpected given the challenges of the coronavirus.
"Everyone has been touched by COVID-19, and we anticipated an impact on this project, as well," South said. "At this time, we continue to work with CDOT."
RTD spokeswoman Pauletta Tonilas said the agency hasn’t been involved in conversations with CDOT about the property for the past several months.
“We still have interests in expanding RTD’s capacity in the corridor, and look forward to working with them in the future,” she wrote in an email.
CDOT is anticipating at least a $198 million hit over the next three years. Lew said CDOT will preserve funds going to projects that have been awarded or that are already underway.
But that presents a challenge in the case of large, multi-year projects like the expansion of I-25 north of Denver. The agency will now likely have to finance the last piece of that project, Lew said, though that would mean years of unexpected debt service payments.
The commission will have to decide how much cash to allocate to that project, and that decision will factor into the fate of Burnham Yard and other projects. The body is scheduled to meet again on May 21.
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