MnDOT's $100 million Duluth question
Local highway officials have the state's support as they confront the big questions about an over-budget Twin Ports Interchange.
It was a phone call Shannon Laing hated to receive, but appreciated for being as forthcoming as it was.
Before going public with the news in November, the Minnesota Department of Transportation wanted to explain to Laing and others that important pieces of work in and around Lincoln Park would be taken out of the three-year, $343 million Twin Ports Interchange reconstruction project scheduled to start in May.
Laing added up the consequences — additional years of construction to finish deferred work, followed by a replacement or restoration of the Blatnik Bridge to Superior scheduled to begin in 2028. Usually highway projects worked a stretch and then moved on down the line, said Laing, director of partnership development for Ecolibrium 3, a Lincoln Park development organization. But the Twin Ports Interchange project was going to squat in the neighborhood, likely to be followed by more work.
“This neighborhood is looking at construction for close to 10 years straight,” she said. “We’re at a critical point in the redevelopment of this neighborhood and to have long-lasting projects and big question marks is very concerning.”
Everybody, it seemed, sighed a little when MnDOT’s Duluth office announced that project costs had escalated to $443 million, necessitating that the project be scaled back to fit under the $343 million budget .
MnDOT officials met with the News Tribune recently at their Railroad Street office, a temporary Twin Ports Interchange headquarters located near the heart of the work, to further explain the discrepancy. The News Tribune asked MnDOT if it was concerned the project would be further jeopardized at the next budgeting marker, when the project is at 90% engineered.
“We just have to wait and see,” said district engineer Duane Hill, MnDOT’s top official in Duluth. “You hope that we’re going to come down on some of this stuff, but we thought that between 30% and 60%, too. But for everything we worked really hard on driving down, something else went up.”
The Twin Ports Interchange reconstruction project was conceived when MnDOT took deeper notice of the deteriorating bridges that make up the ramps, overpasses and raised sections of freeway at the confluence of Interstate 35 with I-535 and U.S. Highway 53.
Rather than address the components piecemeal across several years, the Duluth office consolidated the work. They would bring elevated roadways down to ground level, eliminate tricky merges to make the interchange known as the “can of worms” safer, and build new infrastructure throughout that could handle the oversize loads coming in and out of the port.
By eliminating scores of bridges, MnDOT would drive down future operating costs that come with maintaining and inspecting bridges. But the deferrals at the I-35/U.S. Highway 53 and I-535/Garfield Avenue interchanges mean oversize loads will still need to move on city streets, eliminating — for now — a major function of the project.
“Wait and see,” “it is what it is,” “we didn’t know what we didn’t know” — these are phrases the MnDOT engineers use when describing the challenges which led to the cost overrun. The phrases can be dissatisfying for journalists, and the armchair engineers aghast at the cost overruns. The engineers agreed that transparency comes with the cost of second-guessing.
“We want people to know as we go along what the story is, and even if it changes that’s better than having a really bad story at the end,” Hill said.
“We can’t predict the future, we can just tell the truth,” added Pat Huston, the major projects and assistant district engineer locally for MnDOT.
The local office continues to have the trust of the state office in St. Paul. At a field hearing in Duluth last week, MnDOT Commissioner Margaret Anderson Kelliher vouched for Hill, seated beside her, multiple times in front of the state House of Representatives’ transportation committee.
“He’s a real talent,” the commissioner said of Hill, who satisfied lawmakers with his answers about the project.
Earlier, in November, when confronted with the $100 million question, MnDOT senior spokesperson Jake Loesch said cost escalation was a reality — of building mega projects, especially — and then he turned the discrepancy around.
“It’s a great example of why MnDOT is talking about a need for dedicated transportation funding,” Loesch said. “We have other large projects around the state, too, and as we look 5-10-20 years down the road, we have a funding gap on a lot of the work we want to do.”
So Hill and company plow ahead. They described the sorts of challenges which have defined the undertaking so far. Nearly every risk and contingency they planned for has hit, coming up like devilish cherries on a budgetary slot machine. Engineers knew they weren’t encountering a greenfield, but in the end they had no idea they would encounter everything.
“This is right through the heart of a town; it’s like remodeling a really old house,” Huston said. “It’s all tight quarters.”
They ran down some of the biggest challenges and encounters:
— Water. There’s a high water table throughout the project, meaning water is not far down with any dig. Every hole will require wells or water to be pumped or have sheet piling driven to hold back the intrusion of water. Contaminated water will need to be treated, either by the nearby Western Lake Superior Sanitary District or by costly on-site treatments.
“It's preliminary, but it looks like a good deal of the water can be taken by WLSSD — but not all of it,” Huston said.
— Soil. Something of a heat map shows that the worst and most contaminated soils on the project follow the path of the I-35 corridor. Everything glowing red features contaminants such as asbestos-containing materials from olden days when buildings were leveled and their remains sown into the ground. Much of the dirt will have to be trucked (an endless $2 per minute service) to certified landfills and replaced with new, clean fill. What can be salvaged and used as fill currently has nowhere to go, as stockpile areas are limited throughout the corridor. The state won’t use the enticing BNSF railyard because the engineers say the railroad would want the state to indemnify it against whatever happens in the future at the site.
“What dirt is moving and where, what can be reused — that whole earth workflow is extremely complicated,” Huston said.
— Previous unknowns. The project has notably encountered a major storm sewer under the Cross City Trail that will need to be moved to the other side of Lower Michigan Street this spring in some of the project’s first work. Reconstruction will find crews digging a 14-foot trench through North 22nd Avenue West, where they know they’ll encounter more utilities. Just farther west, the complicated underground merger of Coffee and Miller creeks into a four-cell box culvert under I-35 will require considerable excavation and temporary structural supports to the freeway.
“We’ll be running traffic right next to a 45-foot excavation,” Huston said. “You’ll look out your window and down into a 45-foot hole. That all comes with a cost.”
Every challenge is being met along with MnDOT by the contractors, Ames Construction, of Burnsville, Minn., and Kraemer, of Plain, Wis. It's a project delivery method called "construction manager/general contractor" and it brings the commercial entities to the table during designing, rather than coming on board when it's time to build.
“If we did this under the low-bid method, we wouldn’t be working with contractors right now,” Hill said. “We’d be out in the field trying to figure things out in real time, when there’s equipment sitting out there and the meter is running.”
The News Tribune asked, wouldn’t it benefit the contractors to both see the prices soar and kick more work into the future? Not possible, the engineers said, describing cost controls that include two independent estimators contracted by MnDOT — an independent cost estimator and an engineers’ estimator. Any 10% or more discrepancies in line item costs are flagged to be resolved. Beyond that, if MnDOT isn’t satisfied, it can take what’s learned about a work project and advertise for a low-bid contractor.
“Our estimators have been pretty close (with the contractors) on this one,” Hill said.
Early on, during high-level planning, Hill said MnDOT brought in national experts and federal highway officials to help build estimates with plenty of contingency.
“We had large groups of people helping us do this,” he said.
The $100 million funding gap came into the picture in recent months as engineers and contractors continued to zoom into the details.
Laing is among those who have been tracking the project from the beginning, more than three years ago. She’s understanding of the position MnDOT finds itself in.
“There’s not a lot they can do,” she said. “Nobody can write a check for $100 million.”
But she’s wary of making it look as if the neighborhood accepts the situation. She’s pushing back. She testified last week at the field hearing, urging more funding.
“Starting and stopping also adds costs,” Laing said. “A lot of folks are trying to do what they can to find a pot of money or two to see this project continued and not have these deferrals.”
In the meantime, the engineers plug away. Soon, radio spots and billboards will be employed as they continue to attempt to reach people prior to the start of May construction. Lately, monthly public meetings about the project have drawn more than 100 people per session. People are growing more curious, and it makes some of them condemning. Huston said he's familiar with the social media criticisms.
“We’re not apologetic,” Huston said. “This whole team cares and we’re doing our best. People put their lives on hold for these projects. We’re all taxpayers. We want to build a safe, quality and efficient project, but it’s not easy.”