Southwest LRT will take an additional three years to complete, with Met Council paying up to $210 million in severance

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The Southwest Light Rail over-budget and delay project will take another 34 months to complete, allowing it to open sometime in 2026, according to a proposed agreement between the Metropolitan Council and its lead contractor.

Met Council is proposing to pay its contractor, the Lunda McCrossan joint venture, $40 million immediately and up to $210 million to settle disputes that arose between the two sides over the past year. The council is overseeing construction and will operate the 14.5 mile line upon completion.

Cost overruns and delays have pushed the most expensive public works project in state history well past its original $2 billion budget. Last year, Met Council tapped a $200 million emergency fund from Hennepin County taxpayers, most of which is now tied up. The Council has not been able to provide an updated cost estimate for months.

“These changes have impacted both the time required [for Lunda McCrossan] to complete its work and bear the costs under the construction contract,” Metro Transit general manager Wes Kooistra and the project managers wrote in a memo to council members additional costs.”

In the memo, Met Council officials said changes accounted for 30 months of the 34-month lag. The half-mile Kenilworth Tunnel and a guardrail separating the new light rail from the BNSF freight line near Interstate 394 in Minneapolis are responsible for many of the overruns.

A Met Council spokeswoman declined to answer questions about the $210 million amount or the new timeline.

“The Council does not deem it appropriate to comment on this matter until Council members have an opportunity to consider and vote on this matter in an open session tomorrow,” Terri Dresen, the council’s spokeswoman, said in an email .

The settlement may ultimately cost more than the proposed $210 million amount as Met Council and Lunda McCrossan argue over who is responsible for the other four months of the delay. Additionally, they have not agreed on the overall cost impact of labor and equipment overruns, change orders, and the productivity of work performed to date.

Met Council and Lunda McCrossan are trying to negotiate a settlement, but the dispute could ultimately require mediation, Kooistra and the project managers wrote.

Met Council has said little publicly about the behind-the-scenes dispute with its prime contractor. Many details emerged last fall following an investigation into the project’s problems by the Minnesota Office of Legislative Auditors.

Council members, who will be appointed by Gov. Tim Walz, got their first glimpse of the proposed settlement during a closed session last week. Members will be ready to vote on the deal on Wednesday.

Meanwhile, public scrutiny of the project budget and schedule is increasing.

The Legislative Commission on Metro Government is scheduled to hold a hearing on the Southwest Light Rail problems Wednesday morning. Two influential Minneapolis Democrats, State Assemblyman Frank Hornstein and State Senator Scott Dibble, plan to seek funding to review the project.

The issues have also led to a re-examination of the Met Council’s governance structure. Hornstein and Dibble have announced that they will introduce legislation that elects councilors instead of appointing them. Republicans have raised similar concerns about accountability in the past.

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