Despite Redevelopment Hiccup, East Washington Project on Track, City Says

Despite uncertainty over the fate of redevelopment funds, transportation officials say the East Washington interchange project is continuing and may even be completed earlier than its May 2014 deadline.

Last month, the city received a letter from the California Department of Finance saying that it could not access some $34 million in tax increment collected from the redevelopment district, money that had been set aside for projects such as improving the East Washington interchange and the overpass at Old Redwood Highway.

But city, Caltrans and Sonoma County Transportation Authority officials all say that the contract for East Washington has long been awarded (to North Bay construction company Ghilotti) and that the state’s rejection will have no impact on the work.

“Once a contract signed, it’s a go,” said Public Works Director Dan St. John. “However, we are concerned about the state’s letter and hope that the issue is resolved quickly.”

The $8.3 million project (half of which was supposed to be funded by redevelopment funds) began earlier this year and is about 30 percent complete. It will create a new northbound onramp for cars traveling west on East Washington Street and straighten the southbound ramp onto Highway 101 in the hopes of easing traffic congestion.

Last Friday, working were busy putting in two abutments to support the ends of the overpass and will soon begin installing four large girders that will support the new onramp.

But the rejection by the state means a new funding source will have to be found to cover the outstanding $4 million, including possibly taking on debt to finance the project.

However, the bigger concern is Old Redwood Highway where improvements to highway onramps and widening the structure were expected to start this October. The project was counting on $15 million in redevelopment funds, but more than $11 million were rejected by the state, which argued that the agreements are obligations of the city and not the former redevelopment agency.

The state also said that the city missed the June 28, 2011 deadline for entering into a contract with a vendor.

If improvements on Old Redwood Highway do not occur and no similar project is found, the Sonoma County Transportation Authority (SCTA) could lose out on some $4.6 million in state funds, dealing a devastating blow to both the agency and the city.

“Should Petaluma not be able to provide that match through local or other sources post redevelopment, we risk losing a much needed project that was committed to in the (Measure M) sales tax program,” wrote Suzanne Smith, the executive director of SCTA in an email to directors last week. Smith added that the project is “very far along” with one right of way purchased and negotiation for the other ongoing.

Other infrastructure projects that are threatened are improvements to the marina, assistance for housing programs, planning and environmental study of the Rainier crosstown connector and the brownfields remediation program.

The city has said that it plans to fight to collect the redevelopment funds, which may include filing a lawsuit in conjunction with other municipalities.