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Tuesday, January 26, 2010

Could lawsuit jeopardize stimulus money for proposed KC-area rail hub?

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The lawsuit probably couldn't have come at a worse time for BNSF Railway, the Kansas City Star reports. The federal government is getting close to announcing whether BNSF will get $50 million in federal stimulus money to start building a massive rail hub in Johnson County. The project has to be "shovel ready" to get the money, but its environmental permit is the target of a lawsuit, which could delay one of the area's biggest development projects.

The state and BNSF believe the rail hub is ready to go since there's been no court ruling affecting the project. Critics, meanwhile, question whether the project could be ready since its environmental permit is being challenged. The decision is up to the U.S. Department of Transportation, which is sifting through 1,380 requests seeking a piece of the $1.5 billion stimulus pie. The requests total $56.5 billion, meaning that competition for the money is quite intense and any hiccup could hurt a project's chances.

Transportation officials wouldn't address the rail hub specifically, but issued a general statement suggesting that litigation could be a problem for any project seeking funds.

"If a project does not have the necessary environmental approvals, or if it is involved in litigation, it would not be excluded from consideration, but it could make it less likely to be selected, " an agency spokeswoman said in a statement.

BNSF is a defendant in a lawsuit challenging the environmental permit issued for the project by the U.S. Army Corps of Engineers. The lawsuit seeks to force the corps to conduct a more expansive review than it did when it found the project wouldn't have a significant environmental impact.

BNSF disagreed, noting that the permit has been issued and project is ready to start.

"In our view the shovel-ready ready status of the project hasn't changed," said spokesman Steve Forsberg.

The rail hub was included in Kansas' application for $261.7 million in stimulus money for four projects, including two involving highways. It's part of a 1,000-acre development that promises to create thousands of jobs

KDOT officials believe the project is still "shovel ready" regardless of the legal battle over the environmental permit issued last month.

The rail hub "is not tied up in court," said Joe Erskine, another deputy transportation secretary at KDOT. "Unless a judge were to grant injunctive relief they could go build it today. Just the virtue of somebody filing a lawsuit does not stop a project."