Charlotte confirms hefty price tag for Transformational Mobility Network, withholds other important financial information

CHARLOTTE, N.C. (WBTV) - A WBTV Investigation from last Tuesday showed emails from city leaders admitting that the cost of Charlotte’s Transformational Mobility Network was likely $8 billion more than what was originally presented.

During a Monday night city council meeting, city leaders presented up-to-date cost estimates that confirmed an expensive price tag but still withheld important financial information from the public.

In a PowerPoint presentation from city leaders and a consultant called InfraStrategies LLC, the estimated capital cost of the TMN is $13.5 billion.

But in an email obtained by WBTV, Special Assistant to the City Manager Shawn Heath wrote the actual cost could be $20 billion.

“The $8-12 billion range from the Task Force Report is just capital costs when taking operating costs and financing costs into account, I believe the 30-year all-in is more along the lines of $20 billion,” Heath wrote in an email to Planning Director Taiwo Jaiyeoba and CFO Kelly Flannery.

The new price tag presented Monday night does not include financing costs and operating and maintenance costs.

During the presentation, City Manager Marcus Jones referenced WBTV’s Investigation and said that the city never includes debt and financing costs in these estimates.

“I do want to talk a little bit about financing costs which is important I think that came out last week in the article,” Jones said. “I will tell you there’s no project that we’ve ever done that includes the financing costs.

“For instance, a few years ago we built a police station that cost us $26 million. That’s the construction cost. By the time you pay for it over 20 years it balloons to $35 million but we don’t characterize a police station as a $35 million police station because that’s the financing cost,” Jones said.

But Republican city council members indicated that the transparency from the city was lacking and could prove costly.

In order to finance the project, the city would need the North Carolina General Assembly to grant approval for the city to put a referendum for a one-cent sales tax on the ballot before getting a majority of Mecklenburg County residents to vote in favor of it.

“This plan as designed by the people who delivered it is dead in the water,” District 6 Councilman Tariq Bokhari said. “The general assembly and the towns will not have the trust necessary as long as we keep treating our partners like pawns.”

“I have to say that I’m happy that at last we are having this conversation after spending a year wondering why we were not being more thoughtful about finances and recruiting our partners,” District 7 Councilman Ed Driggs said.

The presentation from InfraStrategies included other important updates about the project timeline and how much revenue the sales tax would supposedly generate.

City Manager Marcus Jones admitted it would be nearly impossible to start all of the listed transit projects in the plan at the same time.

The new update calls for a phased approach with the projects being completed at staggered dates.

• CityLYNX Gold Line Phase 3: 2033 – Estimated Cost $651.7 Million
• LYNX Red Line: 2031 – Estimated Cost $674 Million
• LYNX Blue Line Extension: 2041 – Estimated Cost $1.4 Billion
• LYNX Blue Line Core Capacity: 2041 – Estimated Cost $122.4 Million
• LYNX Silver Line Phase A: 2037 – Estimated Cost $5.1 Billion
• LYNX Silver Line Phase B: 2040 – Estimated Cost $2.9 Billion
• 1-77 Bus Rapid Transit: 2029 – Estimated Cost $228.6 Million
• Bus Priority Corridors: 2028 ­– Estimated Cost $229.9 Million
• Envision My Ride: 2026 – Estimated Cost $92.6 Million

The $13.5 billion price tag also includes $1.9 billion in non-transit capital costs that covers greenways, sidewalks and roads. However, it does not include costs outside of Mecklenburg County.

InfraStrategies also projected the revenue from a one-cent sales tax would generate $37 billion between 2023 and 2071, when the last of the debt from the projects would be paid off. It’s not clear why information regarding distant revenue projections was shared while specific operating and financing costs would not.

Even without the information, Jones claimed that revenue from the sales tax would cover the entire project.

“It covers the capital costs, the operating costs, and the financing cost,” Jones said.

Jones’ projection also makes an assumption that the city will receive significant matches from the federal government to help pay for the projects.

Information presented by Infrastrategies shows that federal grant programs for projects upwards of $300 million is anywhere from 35-50% of total costs while projects under $300 million are anywhere from 50-60%. However, expensive projects like the ones being pursued by the city typically receive grants on the lower end of that scale.

Congress is currently considering an infrastructure bill that would fund local transit projects but InfraStrategies admits the dollar amounts directed to Charlotte are unknown and “will be determined based on negotiations with Federal Transit Administration as projects advance.”

The scope of the project is massive, with Charlotte Regional Business Alliance CEO Janet LaBar claiming it would be the largest economic development effort in the North Carolina history.

CRBA is leading an economic impact study on the TMN that will be released later this Summer. Jones said he will present options to the council regarding next steps on the TMN in the Fall.

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