East San Jose light rail extension approved despite $122M in budget overruns

More than two decades in the making, the Eastridge to BART Regional Connector light rail extension got a unanimous stamp of approval from the Santa Clara Valley Transportation Authority on Thursday to move forward.

But the 2.4-mile elevated light rail, which will run along Capitol Expressway from the Alum Rock light rail station to the Eastridge Transit Center, offering connection to the Milpitas BART station, comes with a higher price tag than officials budgeted for — $121 million more, to be exact.

Increases in material and labor costs meant that the lowest bid for the construction contract came in at $437 million, 38% higher than VTA’s original estimate of $316 million. With the money already spent on the project, that brings the total cost to $653 million.

Still, VTA staff urged the board to greenlight the project, arguing it will serve East San Jose’s majority Latino, lower-income population, which depends on transit the most.

“We send a clear message today that East San Jose deserves an equitable transportation system,” said VTA board member and San Jose City Councilmember Omar Torres.

Currently, the only public transit connecting Alum Rock and Eastridge is a bus that takes approximately 11 minutes. The light rail is expected to cut that travel time more than in half, to just under five minutes.

“The Eastridge Connector vote was long overdue — let’s start building,” San Jose Mayor Matt Mahan said in a statement. “This is a vital expansion of public transportation in one of our most densely populated and traffic-congested neighborhoods, and will allow our East Side residents to better access the jobs and resources they need.”

The project’s financing comes from several sources. A county measure passed by voters in 2000 provides $313 million, and a 2018 bridge toll increase provides $130 million. State transportation grants and funding provide another $86 million. VTA will cover the cost overruns with reserve funds.

While the project comes in over budget, it could also be completed faster than originally anticipated. Sacramento-based MCM Construction Inc. and New York City-based RailWorks Corporation, which submitted their winning bid for the contract together, promised to deliver the project in 1,250 days, rather than the 1,600 VTA had accounted for, cutting a year off the project’s timeline. If construction begins in April as VTA plans, rail service could begin in 2028.