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How San Francisco’s Biggest Infrastructure Project Will Help Transform The Region

The traffic jam known as the San Francisco commute may be eased slightly by the under-construction Transbay Terminal, but it is clear that more needs to be done. Significant job growth throughout the region and rising housing prices have led to people living farther away from jobs, putting additional strain on freeways.

How San Francisco’s Biggest Infrastructure Project Will Help Transform The Region
Transbay Joint Powers Authority executive director Mark Zabaneh and Arup group leader Aidan Hughes

Transbay Terminal has the potential to change the way people think about their commutes into San Francisco,” Arup group leader Aidan Hughes said. “It provides the opportunity to begin to address some of these capacity questions."

When the Transbay Center opens in 2017, it will immediately accommodate 7,000 to 8,000 bus travelers with the ability to grow to accommodate 20,000 people, according to Hughes, who spoke at Bisnow’s Future of SoMa and Transbay event Tuesday. Bringing in Caltrain and high-speed rail will allow the terminal to serve not just the region, but the state.

Hughes said the thinking surrounding the Transbay Terminal was not to create something for now, but to create something that will address capacity issues and prompt big changes.

“Over time Transbay Terminal will be one of the busiest, most successful transportation hubs west of the Mississippi,” he said.

Without the Transbay Terminal, the region’s gridlock will only get worse, which could have dramatic implications, according to Hughes.

“Getting people to those jobs, particularly across the bay, cannot be accommodated by autos, and now we’re struggling to accommodate it by BART and bus,” Hughes said. “If you don’t build Transbay and provide an opportunity for more capacity, it becomes something that stops the economic engine.”

It will be difficult for employers to invest in San Francisco if people cannot get to their jobs, he said.

How San Francisco’s Biggest Infrastructure Project Will Help Transform The Region
Allen Matkins partner Tony Natsis, Arup group leader Aidan Hughes and Transbay Joint Powers Authority executive director Mark Zabaneh

The Transbay Terminal project has been a long time coming and has had plenty of challenges. Following the Loma Prieta earthquake, the old terminal and freeway ramps connecting the Bay Bridge to nearby streets needed seismic upgrades and retrofitting. The city saw this project as a new opportunity and bought the Transbay Terminal for $1 from Caltrans, according to Transbay Joint Powers Authority executive director Mark Zabaneh.

Old infrastructure was torn down, and the expanded real estate footprint of the area was 12 acres. The Transbay Joint Powers Authority began selling the land to developers, and sales generated $700M of seed money for the Transbay Transit Center program, Zabaneh said. Another $700M was generated by charging fees for developers to build higher. Property tax revenue will allow for additional revenue up to $1.2B for the next 30 to 40 years.

Completing Phase 1 has been no easy feat. Zabaneh said the transit center was a victim of its own success. The TJPA was able to sell the parcels surrounding the center, but developers began construction faster and depleted the local labor and contractor pools.

Because it is a public project, the center has to use a procurement approach instead of a negotiated contract, which made it more difficult to attract contractors. The TJPA often received bids from one or two subcontractors, which increased the costs for some aspects of the construction by upward of 20% to 30%.

How San Francisco’s Biggest Infrastructure Project Will Help Transform The Region

Zabaneh said he worked around the labor issue by planning contracts with partner Webcor. By controlling the schedule and planning contracts when the money came in, Zabaneh was able to stay on schedule and eventually secured the $600M of additional funds needed for the project. The project would not have been possible without a great deal of innovation.

“It’s really innovation 360 with innovative planning, implementation, financing and construction,” Zabaneh said.

The next big hurdle will be securing about $4B for Phase 2, which will bring trains into the terminal. One way to generate revenue is to charge a fee to Caltrain passengers, who are currently paying a transfer fee to get from Fourth and King streets into downtown, to get a direct connection into the terminal.

Many questions remain about the future of Caltrain’s electrification, which will be needed to bring the rail network into the terminal. Around $647M in federal funds is no longer coming. Zabaneh said local and state funding will be key instead. He said Regional Measure 3, proposed for the 2018 ballot, will create additional tolls across the region, and could help fund the Caltrain extension and operational costs for the Transbay Center.