Austin Light Rail Project Advances Despite Lawsuits, Funding Questions

After overcoming legislative challenges that sought to derail it, a plan to build a light rail line in Austin is moving forward — despite more potential roadblocks that could delay or halt construction of the system.

Leaders of the Austin Transit Partnership — the governmental organization responsible for implementing the light rail project — are choosing to focus on forward progress, starting the process of selecting contractors to design and build the project.

The Austin Light Rail system is the largest part of the Project Connect transit plan voters approved in 2020. The more than $7 billion plan includes an ongoing 20% increase to local property taxes to fund the train and other smaller transportation projects in the city. Initial plans included 27 miles of track, but the project has since been scaled back to fewer than 10 miles without a corresponding reduction in cost.

The light rail project aims to connect Austin’s northern and eastern neighborhoods with the city center, with rail lines extending from 38th Street in the north and Oltorf to the south. An eastern branch would stretch from near Lady Bird Lake to just inside State Highway 71 near Austin-Bergstrom International Airport. Potential future extensions would bring rail out to ABIA’s terminal to the east and up to Crestview in the north.

Trains will run every five to 10 minutes, according to the current plans. ATP officials say the railway will ease traffic congestion, improve air quality and give transit users an easier and more dependable way to get from point A to point B, creating thousands of jobs, affordable housing and significant economic returns in the process.

“Large infrastructure projects are complex, but the upside is huge,” ATP CEO Greg Canally said in an interview. “It has a payback for the community, whether using the train or not using the train, because it creates a choice and options.”

Where are we now?

If all goes smoothly, ATP expects to break ground on the rail line in 2027 and wrap up construction in 2033. Before construction starts, contractors will work on finalizing designs and technical specs, securing permits and acquiring the land needed for the project.

The organization launched a two-step process to find its main contractors this month, releasing a request seeking information about prospective bidders’ qualifications. After the window to submit qualifications closes in early July, firms ATP deems qualified will be invited to submit a detailed bid for the contract.

The design-build contract is estimated to be worth more than $3 billion. Canally said firms from across the globe have expressed interest in the Austin Light Rail project, and he expects ATP will select from among the bidders early next year.

“This has taken 18 months’ worth of work to get ready to put (together) a very large contract,” Canally said. “You can't AI it.”

ATP is also working through the bidding process for train vehicles and a maintenance facility for those trains.

What challenges remain?

ATP has not yet issued any bonds for the project, so the organization doesn’t have all the funding it will need to build a railway.

While state legislative efforts to derail Project Connect’s local funding mechanism failed this session, lawsuits remain, and ATP’s ability to fund the light rail project also hinges on the availability of Federal Transit Administration grant funding.

Under the funding model approved by voters, ATP would take on debt for the project and the City of Austin would repay the partnership through a transfer of property tax dollars approved by the city council.

The massive reduction in the project’s scope has been an issue in lawsuits filed on behalf of local taxpayers by attorneys Rick Fine and Bill Aleshire, a former Travis County tax collector and judge. The outcome of those and other suits will determine if ATP will be able to issue debt for the project. In the meantime, the organization will use cash on hand to start design work.

Canally doesn’t foresee a situation where his organization won’t prevail in court.

“We don’t think it’s on hold; there’s a process underway,” he said. “We feel good about what that outcome will be.”