The Maryland Department of Transportation and its legal team came up well short in their attempts to convince a Baltimore judge to require the firms building the Purple Line to remain on the job.
Judge Jeffrey M. Geller vigorously rejected every argument offered by MDOT attorneys, beginning with their claim that the team building the project, Purple Line Transit Partners (PLTP), was misreading its contract with the state.
Because of Thursday’s ruling, a temporary injunction that kept PLTP on the job expires on Monday. If 5 p.m. Monday rolls around without a resurrection of negotiations and a last-minute agreement between the current vendor and the state, work on the project will cease.
While it was MDOT and lawyers from the Attorney General’s office who were in the spotlight during last week’s courtroom drama, it now falls to Gov. Lawrence J. Hogan Jr. (R) to rescue a project whose progress is imperiled by Geller’s ruling, political observers said.
A top official with the primary contractor, Purple Line Transit Constructors (PLTC), testified it would take two to four weeks to shut down — a process that would include covering up giant holes in the ground, barricading precarious worksites, removing equipment that belongs to subcontractors, and leveling terrain, to reduce stormwater runoff.
A shutdown would almost certainly lead to a weeks- or months-long period where the half-built project becomes a massive, static eyesore while MDOT figures out whether to bring day-to-day management of the Purple Line in-house, find a new construction manager, or reach agreement with PLTP on the nearly $800 million in cost overruns that led to last week’s legal showdown.
One former top official said on Friday that people who live in the neighborhoods torn up by construction would quickly view the abandoned worksites “as a daily statement that the system failed.” And they would undoubtedly make their displeasure known to local and state officials.
With the project already over budget and behind schedule, “you cannot run up other costs closing up” work sites scattered from New Carrollton to Bethesda, the former official said.
In a statement, Prince George’s County Executive Angela D. Alsobrooks (D) said she was “seriously concerned” about the court decision and the prospect of more delays.
“The immediate impact of the shutdown is continued disruption in normal business operations of several hundred small, heavily Latino businesses in the Langley Park and Riverdale areas,” she said. “These businesses face serious losses with broken up streets, closed parking lots, and entrances blocked while this dispute has persisted, challenging the patience of those who were prepared to endure the scheduled construction disruption, but not endless delays.”
For this and many other reasons, it now falls to Hogan, a historically popular second-term governor with political capital to expend, to sift through what is likely an unsatisfying menu of options and determine how to proceed.
“Whether the resolution will be a last-minute agreement or whether Maryland ultimately takes over construction, the buck stops with Governor Hogan,” said Ralph Bennett, president of Purple Line NOW, an advocacy group.
“Maryland is the owner of this project and this disagreement has been allowed to fester for too long,” he added. “The future riders of the Purple Line, residents and businesses disrupted by construction, and the workers braving a pandemic to keep the project moving forward need decisive leadership from the governor. Whatever the outcome, a clear statement of commitment and a sense of the path forward should come from Governor Hogan.”
Observers identified a range of issues and concerns in the wake of last week’s court ruling:
Job losses — There are approximately 170 subcontractors working on the project. If PLTP walks away, hundreds of workers will quickly find themselves going from the Purple Line to the unemployment line. Not a good thing ever, and worse during a pandemic that has caused a massive job losses.
Finances — MDOT officials testified they have put in all the cash they have intended to contribute to the project, and that they are relying on the assets and borrowing capabilities of PLTP — a consortium made up of Meridiam, Star America and Fluor Corp. — to carry the Purple Line to completion. Like all of the “business units” within the Department of Transportation, the Maryland Transit Administration is already under orders to reduce spending because of the coronavirus epidemic. Financial considerations are expected to weigh heavily in the state’s calculations.
Can this marriage be saved? — There is little doubt that the most seamless option is for PLTP to remain on the job. If anyone knows the project backwards and forwards, it’s the people who signed the 36-year contract to build a $5.6 billion, 16-mile transit system. But that would require the two sides to bridge their divide over the cost overruns, something they have been unable to do over the course of the last two-plus years. The acrimony has led the relationship to sour badly.
Taking the project over — In court, MDOT officials argued that PLTP’s departure would cause “irreparable harm” because the state lacked the money, personnel and expertise to bring the project in-house. Can they pull a 180-degree U-turn on those statements in a matter of days? That would require some nifty footwork, observers said.
The failure to plan — The judge called out MDOT for failing to take PLTP up on its repeated requests to engage in transition planning. Even after Geller granted a request to keep the firm on the job an extra 45 days in August, “the state failed to participate in any meaningful way,” he said as he delivered his ruling. Maryland officials will likely be pressed by local officials and state lawmakers on their apparent failure to craft a handoff plan.
Mediation — There are lots of retired judges and trained mediators floating around. Have the state and PLTP fully availed themselves of the opportunity to have a third party resolve their financial dispute (preferably while work moves forward)? It’s not clear that they have. If the two sides are sick of each other at this point (see above), mediation is not likely.
Impact on the I-495/I-270 “P3” — Hogan and others like to boast that the Purple Line is one of the biggest “public-private partnerships” in North America. If it craters, it is tough to imagine it would not cast a long, dark shadow over plans to form an even bigger P3 to add “express toll lanes” to the Capital Beltway and Interstate 270. (Hogan has jokingly referred to the highway plan as “the biggest P3 in the known universe.”) Adding to the potential difficulty is the fact that many of the firms working on the Purple Line are bidding on the highway proposal.
“It is still, to me, shocking that MDOT — to my knowledge — hasn’t ever done a hot-wash of the lessons they’ve learned from this Purple Line experience, what’s gone well and what’s been mismanaged, and how to apply those lessons to future projects,” said Montgomery County Councilmember Tom Hucker (D).
If Thursday’s big loss by the state brings the warring parties closer to a compromise, we will likely see it early in the week.
A statement issued by PLTP officials after the ruling appeared to suggest that they remain open to continuing on.
“From the outset and to this day, our overriding goal has been to deliver the Purple Line to the people of Montgomery and Prince George’s counties as efficiently as possible,” they said.
“Notwithstanding the litigation, we remain convinced that a settlement is in the best interest of Montgomery and Prince George’s counties as well as the State, because it will deliver the Purple Line sooner and at lower cost than any possible alternative,” PLTP added. “We remain open to reaching an equitable settlement if the State chooses to engage in meaningful settlement discussions. However, time is of the essence to mitigate further delays in the delivery of the project.”
Whatever happens next, part of Hogan’s legacy is on the line.
The founder of a highly successful development company who rode his business-world bona fides to the governor’s mansion, he does not want a failed transit project hanging over a potential U.S. Senate bid or the 2024 presidential primary, an all-too-easy attack line for rivals.
U.S. Rep. Anthony G. Brown (D-Md.), who lost to Hogan in 2014, blasted the governor on Friday, saying he “bears full responsibility for the dithering, delays and lack of leadership that have brought us to this moment — the dissolution of the largest public-private partnership in the country and the logistical, financial and neighborhood disaster confronting Maryland.”
“It is absolutely unacceptable for the Purple Line to go unfinished,” Brown said. “It is time for Gov. Hogan to pause his book tour and presidential campaign planning, to break this impasse and deliver the Purple Line for the people of Maryland.”
The former top official put it a bit more gently, saying the project would “be a visible symbol all over the country. The Purple Line will stand for years as a failed policy” if it is not rescued successfully — and soon.