• High-Speed Rail Project Becoming More and More Expensive
  • November 24, 2016
  • Law Firm: California Eminent Domain Law Group APC - Glendale Office
  • A series of events over the last month has increased the cost of the high-speed rail project. First, the relocation of Highway 99 in Fresno — a key part of the project — is six months behind schedule and, according to Caltrans’ most recent projections, is going to cost an extra $35 million above previous estimates. Caltrans said they needed $50 million, but are going to limit the scope of the project in an effort to reduce costs by $15 million.

    The high-speed rail project has been held up due to problems obtaining rights to private property, the same problem that has resulted in a two-year delay and a $63-million payout to Tutor Perini — the contracting firm that is building the first rail structures for the 29-mile project in the Central Valley. The company asserted that the state failed to deliver the necessary land to begin construction, which resulted in additional overhead and expenses.

    So far, the rail authority has only obtained 31 of the 42 parcels needed to complete the segment near Highway 99. The rail authority will have to use eminent domain to acquire four parcels from Union Pacific, according to an authority audit report.

    The 29-mile segment in the Central Valley has only acquired 563 of the needed 870 parcels. The land acquisitions in the Central Valley have proved to be far more difficult than the rail authority planned for. It was touted as one of the easiest places to start construction, but many of the property owners were more prepared to fight and resist the state’s demands.

    Opponents of the high-speed rail project believe that the increased costs could put additional burdens on the state’s plan to build an initial operating system from San Jose to Shafter by 2025. Critics say the project is at risk of shifting into a series of local rail investments that might never connect into a state wide system, according to the Fresno Bee.

    Phase one, a 520-mile segment that is supposed to go to from Anaheim to San Francisco, is estimated to need about 1,590 parcels of property. As of last week, the rail authority has only been able to obtain to 841 of needed parcels.

    Based on our own experience in representing a number of property and business owners who are being displaced as a result of the project, we believe that both the budget overruns and the delays in procuring property are a direct result of the State’s woefully inadequate offers to property owners in many cases.  The State’s offers in many cases have been so low, that property and business owners have been left with no choice but to litigate their right to fair compensation.  Once in litigation, our experience has been that we have been able to obtain just compensation for our clients - which has generally been significantly higher than the amount of the State’s initial offers.