Stop us if you’ve heard this one before: The Transbay Transit Center project is running low on funds and needs a new infusion of cash to avoid a full construction freeze.
Yes, the ambitious and game-changing but perpetually impoverished development has run into trouble with their cash flow again. Back in February they were forced to take a loan from noted vampire squid Goldman Sachs.
That $171 million lump to swallow was meant to keep the diggers digging, as suddenly having to pull the plug on the entire operation would only cost more money in the long run.
After that, the city successfully sold the last of its nearby available parcels to the tune of $160 million. Sales of city-owned plots (formerly freeway structures) is one of the principle means of funding for the multi-billion dollar civic development.
If you were of a slight wide-eyed, sunshine-and-lollipops disposition, you might think that one-two financial juicing would be enough to see the whole thing through.
Alas no. Only a few weeks later the Chronicle reports that the build now needs an additional $260 million loan or the whole operation will come to a halt come summer. Admit it, you're not surprised. The Transbay project has fallen short hundreds of million dollars for several years, so much so that by now this news is almost of the dog-bites-man variety.
In fairness, much of the problem is due to the ever-soaring cost of construction, stirred into a frenzy by the ongoing building boom. The Transbay Joint Powers literally cannot afford to let work pause, because costs will almost certainly continue to rise even if work isn't getting completed, creating a kind of feedback loop that will drain already-depleted coffers.
The bulk of the loan will come from Wells Fargo Bank. The city controller has the unenviable job of taking this plan to the Board of Supervisors tomorrow, who basically have no choice but to grit their teeth and pass it, being that the other option is to leave the whole thing halfway finished until such a time as someone offers a better deal.
Hold your breath on that and see how long you last.
- Transbay Asks For $37 Million [Curbed SF]
- Bailout in Works for Transbay [Chronicle]
- Troubled Transbay [Curbed SF]