A nearly decade-long debate over where the Rhode Island Public Transport Authority should construct its new bus hub may come to a close as early as the end of the month. But many questions — including how much the hub will cost and what complications might be associated with its cost — may remain.
In 2022, the hub was estimated to cost between $200 and $250 million. RIPTA’s website states that the hub will be funded using both the money that remains from $35 million in bonds that voters approved in 2014 to fund transit improvements, and a public-private partnership with Next Wave Rhode Island Partners, a development consortium.
RIPTA has said that “access to private capital, as well as the private-sector partner’s skills and assets,” were two motivating reasons behind the public-private partnership.
But some transit advocates have expressed concern over the planned funding model.
Amy Joy Glidden, an advocate with RI Transit Riders, pointed out that RIPTA does not currently have the authorization to borrow from Next Wave what it would need to in order to fund the transit hub. H7491 — a bill that would have given RIPTA the power to take actions like borrowing more than 80% of its revenue — has twice failed to become law. The most recent bill died in committee.
Randall Rose, an advocate with the Kennedy Plaza Resilience Coalition, also raised doubts about the fact that RIPTA won’t know the exact cost of building the hub when they sign the contract to build it.
In a statement addressed to the House Finance Committee, the Kennedy Plaza Resilience Coalition wrote that H7491 is designed such that “there is no upper limit on how much a bidder can end up charging after they win the contract.”
Glidden also expressed concern about the lack of an upper limit on what RIPTA can borrow.
While RIPTA currently has a $16.9 million contract with Next Wave to determine a location for the hub and plan some of its design, it has not yet signed onto the second phase of the project, which would give Next Wave the job of finishing the design of the hub, building it and operating it.
Cristy Raposo Perry, RIPTA’s communications director, said RIPTA will make the decision “to move forward with a project or not, following coordination with our Board of Directors, state leaders, our riders and the public.”
Noting that the hub will include residential and commercial spaces, Rose also expressed concern about Next Wave’s operation of the hub, saying that Next Wave “would have interests that are very different from bus riders.” He added that “they would try to make profits from the rest of the building, and they wouldn’t necessarily be running the hub in riders’ interests.”
Glidden also took issue with the idea that RIPTA would “hand over operations to Next Wave,” describing it as “bizarre.”
According to the request for proposals, Next Wave could receive rental income from the hub for up to 75 years.
“RIPTA does not know its way around the financial markets, and it does not know its way around real estate, so it’s going to be at a disadvantage in the negotiations,” Rose said. “There is a risk that a deal is going to be structured in a way that isn’t to RIPTA’s advantage.”
“It’s a very favorable contract to Next Wave,” he added. “In one form or another, taxpayer money may end up being used to pay whatever huge price Next Wave is asking for.”
Raposo Perry wrote that RIPTA is “fully committed to thorough analysis of every aspect of this project — including financial planning — to ensure we deliver a state-of-the-art transit center” that is cost-effective and “responsibly utilizes the resources available to us.”
She added that locating the hub at a site close to the train station, which RIPTA has stated is the most likely location, would “enhance the project’s multimodal connectivity and create opportunities for funding” through the Transportation Infrastructure Finance and Innovation Act and the Railroad Rehabilitation & Improvement Financing program.
These federal lending programs are offered by the Department of Transportation and provided alongside public-private partnerships.
John Flaherty, a principal at the urban planning firm Green Street Associates, said that he is not concerned with funding plans for the hub precisely because of the potential that RIPTA could borrow from the federal government.
Flaherty said that the Department of Transportation would pay close attention to the new hub because “they don’t want to have a failure on their hands.”
Flaherty added that he is “just not convinced” that concerns over RIPTA’s potential financial losses are a reason to “oppose moving forward with a hub.”
Mikayla Kennedy is a Metro editor covering housing and transportation. They are a junior from New York City studying Political Science and Public Policy Economics.
