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Metro's Rail Car Deal is Dead, What About That Manufacturing Land Downtown?

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Just over a month ago, Metro announced that after over a year of negotiations it had finally made a deal with Italian rail firm AnsaldoBreda--LA would order 100 light rail cars from them, and they would build a manufacturing plant downtown. The Community Redevelopment Agency was thrilled. They put out a press release announcing that AB's proposed 240,000 square foot facility on the CRA/LA's land at 15th and Santa Fe would anchor a CleanTech Corridor and bring nearly 1,000 middle class jobs to the city. In May, the CRA/LA's board had approved an Exclusive Negotiating Agreement with AB that activated when Metro approved its contract with AB, which it did on September 24. The deadline to sign the Metro contract, however, was midnight on October 30, this past Friday, and guess what didn't happen.

According to Metro's statement, AB demanded contract changes "within hours of the deadline," including a cap on late delivery penalties. Like a petulant teen, AB seems to have a problem with parameters in general--an existing Metro order of 50 cars has only been a third delivered and is three years behind. The cars that have come in are each 6,000 pounds overweight, which the LA Times says "forced the MTA to reinforce some bridges." The new agreement threw in two free cars for the trouble (Would those also be overweight?). Metro points out that Measure R means the city needs a lot of light rail cars quickly (and even quicker if the mayor's 30/10 plan gets any traction), and they have been preparing to solicit additional bids in case the AB contract didn't work out, saying "If all goes according to schedule" they'll award a contract by next spring.

But now that this deal has fallen through, what will happen to AB's lease of CRA/LA land? The September release said an environmental impact report was already underway. The deal was for a 50 year lease on 14 acres of land, on which AB would build a green plant in partnership with Steve Bing's Shangri-La construction company. CRA/LA president Cecilia Estolano was quoted saying AB's $15 million rent prepayment would allow the agency "to repay our loan on the entire [CleanTech Manufacturing Center] site. We will own the land free and clear. This deal has the potential to have the same, if not greater long-term, positive economic impact as CRA/LA’s early investments in Bunker Hill." Oh dear.
· Breaking News: Contract Talks Between Metro, AnsaldoBreda Break Off. Rail Car Contract Goes to Bid [Streetsblog LA]
· MTA's rail-car contract falls apart at last minute, scuttling hundreds of jobs [Updated] [LAT]