Rejection of $83 million bid expected to delay full launch of Rochester rapid transit project

ROCHESTER — The rejection of a contractor’s proposed price for construction work along the planned Link Bus Rapid Transit route is likely to delay the full launch of the service into early 2027.

“We have a couple different ways we can approach it,” Deputy City Administrator Cindy Steinhauser said of addressing efforts to secure a contractor for the work along a planned 2.8-mile route through downtown Rochester.

The options are likely to delay the project beyond the planned launch at the end of 2025, following the Rochester City Council’s unanimous rejection of three bids Monday, with the lowest coming in at roughly $32 million beyond the anticipated costs of street work and installation of six transit stations and other amenities.

While city staff considered seeking added Destination Medical Center funding to cover the proposed $83 million in work, Steinhauser said the contractor pulled its bid after an error was found, which would have increased the cost.

Steve Sampson Brown, Rochester’s director of construction, said the next lowest bid would have added $20 million to the project.

With approximately $58 million the project’s current $175.1 million budget already spent in securing 60-foot electric buses and preparing for construction, Sampson Brown said the council’s rejection of the submitted bids opens a path toward reducing costs of the work along Second Street, between Avalon Cove Court Southwest and Third Avenue Southeast, as well as approximately four blocks south on Third Avenue.

He said city staff and its design consultants will review bids to determine why costs were above estimates and what adjustments could be made to provide more flexibility for the project, which could reduce overall costs.

Among options is splitting the project into two parts. One would likely include street construction and the development of a tunnel under Second Street Southwest near Saint Marys Hospital, while the other would be connected to creation of six transit stations and other above-ground work along the route.

Sampson Brown said the mix of underground and transit station construction added complexity to the project, with the tunnel and station platforms accounting for the bulk of the increased expenses. He said splitting the work could attract contractors with expertise in each aspect, which could lower costs.

He told the City Council the cost for street work connected to the rejected bid was below the engineer’s estimates, so splitting the project also creates the potential for a quicker turnaround for street work, while allowing more time to review other aspects of the plan in an effort to find savings.

Since nearly $85 million of the budget is covered by federal funds and the bulk of added expenses is from state Destination Medical Center funds, Steinhauser said the bidding process didn't allow for tweaks to the project until the bids were accepted or rejected.

Meanwhile, the council did approve a nearly $7.7 million contract Monday with Elcor Construction for planned development of public spaces and amenities at the West Transit Village. The contract is approximately $1.4 million less than the estimated cost of the work, which includes the creation of a transit center plaza south of Cascade Lake.

Council member Norman Wahl cited disappointment related to the uncertainty of the increasing project costs, but he added it’s an important effort to decrease downtown congestion and save future city costs related to potential parking ramp needs.

“I think it would be irresponsible to abandon a vital cog in making our downtown more accessible for decades to come,” he said.

In addition to the planned West Transit Village plaza, the Link project will include stations:

• Near the 19th Avenue Southwest intersection of Second Street
• Near Saint Marys Hospital
• Near the Sixth Avenue Southwest intersection with Second Street 
• Near the Second Avenue Southwest intersection with Second Street 
• Near the Mayo Civic Center 
• Near the intersection of Third Avenue Southeast and Sixth Street. 
  

The West Transit Village and Sixth Street Southeast sites will serve as endpoints to the dedicated route, with other stations offering boardings in each direction every 5 minutes during peak periods and every 10 minutes during other times, including weekends.

Peak periods are expected to be from 6 a.m. to 9 a .m. and 3 p.m. to 6 p.m. on weekdays, with service operations anticipated from 5 a.m. to midnight on weekdays and 8 a.m. to midnight on weekends.

In other city business, the council:

• Unanimously approved a zoning change for 3.9 acres at 2221 Marion Road SE. The change from residential zoning to mixed use in an effort to develop the site for a construction business . 
• Unanimously approved vacating an east-west alley west of First Avenue Northeast, between Eighth and Ninth streets to make way for a planned housing development . 
• Approved a nearly $3.8 million contract for restoration of the city’s Center Street parking ramp near North Broadway Avenue. The project is expected to be funded through parking revenue. 
• Approved a layout for the reconstruction of 18th Avenue Southwest, between Mayowood Road and 40th Street. The approval provides authorization to move the project from preliminary design to final design for the anticipated $16.1 million project being coordinated by the city and Olmsted County, with $5.6 million in federal funds and $2.3 million in utility funds. Construction is expected to start in 2026 and continue in 2027.