Central Subway Pagoda Deal Will Take $9 Million From Muni Operating Funds

Updated 2/23

A deal struck by the SF Municipal Transportation Agency to extract tunnel drills at the site of the abandoned Pagoda Theatre will cost the agency an estimated $9.15 million. While the lease deal with building owner Joel Campos allows the SFMTA to move forward with an extraction plan that’s less disruptive to the North Beach neighborhood than the original one, agency Director of Transportation Ed Reiskin said the money will come out of Muni’s operating budget, unless it receives an additional grant from the Federal Transit Administration to plug the gap, according to the SF Examiner.

The site of the abandoned Pagoda Theatre at Powell Street and Columbus Avenue. Image: Google Maps

The news confirms fears that the Central Subway’s ever-ballooning costs will eat away at funds needed to provide existing Muni service. Put in terms of bus service lost, $9.15 million equates to roughly 100,000 service hours, based on a back-of-the-envelope calculation using the cost savings estimated by the SFMTA when it proposed service cuts in 2010.

“MUNI bus service to North Beach and Telegraph Hill has been slashed continually for years due to operational funding shortfalls,” said Mike Sonn, chair of the Telegraph Hill Dwellers Transportation and Parking Committee, in a letter sent today to Reiskin and the Board of Supervisors [PDF]. “Today, residents and visitors to North Beach no longer have even one direct bus route to or from downtown that runs during non-rush hour times. And in MUNI’s proposed new ‘Transit Effectiveness Plan,’ service to North Beach would be reduced even further through cuts to the 8X line.”

THD is urging the SFMTA to instead “pursue the less-expensive and less-disruptive alternative to leave the drilling machine under the ground near the final Central Subway stop on Washington Street.”

Though the Pagoda plan initially had support from Central Subway skeptics because it could open the door for a future North Beach station, the site’s property manager, Martin Kirkwood, told the Examiner Campos intends to move forward with plans to develop the site, ruling out the possibility of turning it into a station.

“Diverting $9.15 million in precious funds from MUNI’s operational budget will steal that money directly from the bus service we desperately need for an unnecessary drilling machine extraction site we absolutely don’t,” said Sonn.

Update 2/23, 1:00 p.m.: Responding in the comment section on this article, SFMTA spokesperson Paul Rose said that the funds would not come from the operating budget, as Reiskin stated, but from reserves in the city’s General Fund:

While we respect concerns for Muni and its budget, some of these details misrepresent the facts about Muni service to North Beach and the Pagoda Palace plan. Regarding the Pagoda deal, we will not use our current operating budget to pay for the lease or the additional construction costs. Instead, the funds will initially come from our General Fund reserve, which is larger than expected due to a stronger economy. The two-year lease includes $400k in yearly rent, but all other payments up to a maximum of $3.15 million are conditional upon our approval of ownership’s out-of-pocket costs. Going forward, we will work with the Federal Transit Administration to secure their approval to reimburse these costs. With the addition of the Central Subway, the T Third Line is projected to become Muni’s most utilized light rail line, with more than 65,000 boardings per day by 2030. That means less crowded streets and buses, and more efficient travel through downtown, Chinatown, North Beach and beyond.  Contrary to what is stated, Muni provides North Beach residents and visitors a variety of transit options, including the 8x, 30, 45 and 41 bus routes and the historic cable cars, for travel to and from the Financial District, Union Square and other downtown areas. Most of these routes operate all day, within and outside of rush hour times. Also, through programs like the Transit Effectiveness Project, we aim to add transit-only lanes, widen streets and improve transit signal priority to make bus routes throughout the city more efficient, faster and reliable.

  • So… what’s the reason for spending all this money if there’s no chance of a station ever being built? 

  • yimby

    Apparently it’s being spent to appease the North Beach neighbors and businesses who screamed bloody murder about any construction and extraction occurring within the right-of-way.

  • jwz

    The point of extracting the drill at all is that it has resale value. So the actual total will be less than $9.5m or they wouldn’t bother. Without knowing that number I don’t know who I’m supposed to be outraged at.

  • Richard Mlynarik

    Central Subway: pure, unadulterated, unmitigated, limitless fraud.

    It’s not that “cost is no object”, it’s that maximizing cost is the only object.

    Roll up to the trough!

  • CV Blank

    $9+ million just to bring the Big Drill up out of the ground at the Pagoda/Palace? without creating a North Beach subway stop or station? Hey, give me $7 million & I’ll bet I can get it out! But since the real agenda is to run this pork-barrel “Tunnel to Nowhere” to Fisherman’s Wharf, why not leave the BD underground in Chinatown until the next bunch of suckers authorize the rest of the route? Or we could take the nice toy away from the boys & try lower-tech solutions, like increasing bus service on Stockton, decreasing vehicle traffic, & asking produce sellers not to spread across the sidewalks.

  • mikesonn

    TBM extraction resale is < $2 million.

  • Bruce Nourish

    Truncating the 8X at Transbay Terminal would probably allow Muni to pull two buses out of 8X schedule. That’s 80,000 annual hours saved in a year. 

    North Beach benefits, North Beach pays. Seems fair to me. 

  • mikesonn

    How does North Beach benefit?

  •  Don’t be silly, they could never build a convenient way to get from Market all the way to Fisherman’s Wharf. 

    The tourist trap stores & restaurants between the cable car terminal and the wharf have a big, wealthy constituency that will stand firmly against any transit improvements in their area.  It would kill their businesses, which is clearly more important than providing adequate transit.

  • mikesonn

    @7a43ae1b0ed7913641d55cdc95e5e86a:disqus I’ll give you that the neighborhood was not up on their homework so when construction information finally made it to businesses/neighbors, they were (rightly, but way late) pissed.

    However, when these options were presented to the neighborhood meeting, there was zero mention that funds for the Pagoda option would come from OPERATIONAL funds. That is completely unacceptable. Also, why is the city clamoring to spend $9+ million to save < $2 million? I understand they don't want to stop the TBMs in the path of a *possible* extension, but they can easy pull a hard right/left and leave them in the ground off any *possible* route.

    Then again, if the city hadn't sat on its hands for the last 15 years, we could be half way to a solid plan for Phase 3 (the part that will make Phase 2 worth something since barely anyone will ride it as it is being built now). Instead, we are giving the Pagoda property owner exactly what he wants, a complete rebuild, without any chance of there being a CS station at the site in the future.

    @google-fab03ce567c7a5c0d86a25985fb41623:disqus Truncating the 8X at Transbay completely misses the main demographic that rides the 8X. And to suggest that North Beach is somehow benefiting from this Pagoda option misses the point that we are getting 100% construction and 0% transit benefit (well, negative transit benefit since we will see reduced bus service due to TEP and future Central Subway induced surface cuts).

  • mike

    This is primarily happening because some people/groups in N Beach didn’t want a construction zone on Columbus Ave and waited until the last second to make a huge stink.

  • So to clear up any confusion, can anyone explain to me exactly where the tunnel will run and what stations will be built? 

  • mikesonn

    I tried to warn people and get them organized sooner but yeah, that didn’t happen.

  • mikesonn

    It is coming up Stockton and will take slight left under Columbus. Current plan is to pull out TBMs in Columbus just north of Union requiring two lanes to be closed 24/7 for 18+ months.

    Pagoda option will take the tunnels an extra 200+/- ft past this spot and turn them so that they end up under the theater.

    The northern most station has always been in Chinatown at Washington Street.

  • Why doesn’t the city just condemn the Pagoda property?  Extract the TBM’s, build the station and sell the air rights to whoever wants to develop the property at that time.  It should be fabulously valuable sitting right on top of a station.

  • mikesonn

    Remember, the city has done ZERO planning for phase 3 of the Central Subway.

  • Paul Rose – SFMTA

    While we respect concerns for Muni and its budget, some of these details misrepresent the facts about Muni service to North Beach and the Pagoda Palace plan. Regarding the Pagoda deal, we will not use our current operating budget to pay for the lease or the additional construction costs. Instead, the funds will initially come from our General Fund reserve, which is larger than expected due to a stronger economy. The two-year lease includes $400k in yearly rent, but all other payments up to a maximum of $3.15 million are conditional upon our approval of ownership’s out-of-pocket costs. Going forward, we will work with the Federal Transit Administration to secure their approval to reimburse these costs. With the addition of the Central Subway, the T Third Line is projected to become Muni’s most utilized light rail line, with more than 65,000 boardings per day by 2030. That means less crowded streets and buses, and more efficient travel through downtown, Chinatown, North Beach and beyond.  Contrary to what is stated, Muni provides North Beach residents and visitors a variety of transit options, including the 8x, 30, 45 and 41 bus routes and the historic cable cars, for travel to and from the Financial District, Union Square and other downtown areas. Most of these routes operate all day, within and outside of rush hour times. Also, through programs like the Transit Effectiveness Project, we aim to add transit-only lanes, widen streets and improve transit signal priority to make bus routes throughout the city more efficient, faster and reliable.

  • Jamison Wieser

    @mikesonn:disqus the city hasn’t exactly been sitting on its hands about “phase 3” when this was only a 2 phase project that was bounded by Washington Street when the project began. 
    Yet here we are with a tunnel about to be built to North Beach and a two year lease on a potential site for the future station. The fact we are building a tunnel to North Beach is a much better stake in the ground than any separate planning process.

  • Paul – when I find money in my couch, I don’t decide to spend it on something I don’t need.

    If you have an extra 9 million lying around, go build us some bike lanes.

  • Jamison – is the tunnel as designed optimal for an extension? If I read it right, the extra tunnel involves a turn? Not good…

  • mikesonn

    The *promise* of phase 3 has always been on the tips of the city’s collect tongue. I meet many many many people under the impression North Beach was going to have a stop (not just NB residents) on this phase. The original stories in SFGate and Examiner were phrased in such a way that furthered that misconception to the point that Ed Reiskin was forced to state several times in a MTA meeting that there were no plans to put a station at the Pagoda site.

    I think the worst was when SPUR was at the North Beach festival passing out handouts saying the subway would extend to NB. http://sfappeal.com/news/2012/06/central-subway-is-going-to-extend-to-washington-square-well-not-really.phpWhile you may be technically right, there has been quite a bit of half-truths and allowing of rumors to push this project (just look at the map they’ve been using for the last 7 years). Regardless, the subway only going to Washington will be underutilized and an extension (while 20+ years away) is desperately needed.

  • mikesonn

    Actual connections to the FiDi are limited to the 41 for North Beach (rush hours only). You can ride the 10/12 from Broadway but that’s at the southern edge of North Beach. The 30/45/8x do not connect with the FiDi, especially now that they have been rerouted further to the west because of CS construction.

  • SaveMuni.com

    The Pagoda Theater’s unnecessary $9.15 million cut to operating funds adds to Muni’s service cuts, route eliminations and fee/fine/fare increases since 2007.  In 2007, the T-Line quietly eliminated the 15-Kearny Bus, cut back the 41-Union Bus and later eliminated the 20-Columbus Bus—ending links to the Montgomery and Embarcadero Metro/ BART Stations.  Similarly, if built, the Central Subway Project will reduce surface transit throughout the northeast quadrant.  In the Federal Transit Administration’s summary, the Central Subway will take $15.21 million in operating funds from Muni—annually.  Per the Final SEIS/SEIR, the subway will cause 76,400 hours of reduced Annual Diesel/ Trolley Bus Hours.   In the FY 2012 New Starts Criteria Report, the subway will cause 34,426 hours of reduced Annual Trolley Bus Hours. 
    SFMTA has wasted funds on transit-poor projects, like the 1.7 mile Central Subway, while underfunding Muni, transit-preferential streets, pedestrian-bicycle enhancements, street beautification, commercial corridors and neighborhoods. 

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