$1.4 billion tunnel contract is signed; opposition still working to halt project

After signing a $1.4 billion contract Thursday, the Spanish construction giant Dragados pledged to hire predominantly local workers to build the Highway 99 tunnel.

The five-year project still faces opposition, but a contract signing makes it that much harder to stop the state's political and legal momentum toward a possible construction start by August. The four-lane highway to replace the old Alaskan Way Viaduct is to be done by the end of 2015.

"We will deliver the project on time and on budget," declared Manuel Pardo, project executive for Seattle Tunnel Partners.

In an interview later, Pardo said there will be close to 480 people on average working in the tunnel and its portals, agreeing with the figure in an environmental-impact statement.

Predominantly, they would come from nearby unions, he said, including laborers, carpenters, operating engineers and electricians, with whom labor agreements have been reached, said Pardo. Trucking, engineering and manufacturing — of concrete tunnel rings and drilling equipment, for instance — would employ additional people.

Dragados and its partner Tutor-Perini, of Sylmar, Calif., would supply certain trainers and managers. "From Spain, if we bring six, there are too many," he said.

Team members include Seattle-area firms Mowat Construction and Frank Coluccio Construction. Meanwhile, the Laborers' International Union of North America is using leftover equipment from King County's Brightwater sewer tunnel to teach tunneling techniques at Elma, site of an unfinished nuclear plant. Talks are under way about minority-owned businesses, said Pardo and state Department of Transportation (DOT) leaders. In 2006, small groups of demonstrators took to the streets and Sound Transit work sites to protest a lack of African-American small contractors on Rainier Valley and Beacon Hill light-rail jobs.

Many objections and problems remain unsettled.

The latest comes from artists in the 101-year-old Western Building, on Western Avenue near Yesler Way, which must be reinforced or demolished because of vibrations from the giant 57.5-foot tunnel boring machine. Either way, tenants would be evicted in March 2012, said Ron Paananen, DOT program administrator.

Artist Johnny O'Brady questioned officials at the ceremony, saying the city should find replacement housing in Pioneer Square. And if the Western Building is retrofitted, 100 artists should be able to return at previous rent levels, he said.

The anti-tunnel Initiative 101 campaign announced Thursday it has gathered 22,271 signatures, above the 20,629 needed to qualify for a possible May ballot. I-101 seeks to ban the use of city right of way for tunnel construction. The group will keep collecting names until the Feb. 1 deadline, to assure a cushion in case some signatures are invalid.

Another measure, I-102, focuses on the risk of cost overruns to city taxpayers.

Gov. Chris Gregoire said at a Thursday news conference that, although she does not believe there will be cost overruns, she continues to believe that the cost-overrun provision in the Legislature's tunnel bill is unenforceable. Gregoire, the former attorney general, said her analysis is shared by current Attorney General Rob McKenna, her legal adviser and Seattle City Attorney Pete Holmes. "We all agree that language is not operative. It has no force or effect."

She said she does not have the power herself to remove the provision, and believes it would take an act of the Legislature to pass cost overruns to Seattle taxpayers. "I've been very clear; if a bill came to me to remove that language, I'd sign it." Gregoire said.

I-102 Spokesman Drew Paxton also criticized government for pushing ahead without a "clear, transparent" finance plan showing how the Port of Seattle will get $300 million it promises to contribute, and how the state will collect $400 million in tunnel tolls.

"It's astonishing that during these challenging economic times, our elected leaders refuse to have an honest and open conversation about something as basic as how they plan to pay for a project with so much risk," Paxton said.

Port CEO Tay Yoshitani, asked at Thursday's signing ceremony about the $300 million, didn't give specifics, but said the Port has a few years before its money is needed.

The pro-tunnel City Council is expected to vote on agreements with DOT in February, while Mayor Mike McGinn continues to criticize the $2 billion tunnel.

The contract value includes a $1.1 billion base price, $210 million in stipends for insurance and inflation, city-reimbursed utility work and up to $70 million incentive pay, DOT said Thursday.

At the ceremony, Transportation Secretary Paula Hammond gave a figure of 5,000 jobs for the entire $3.1 billion project, including non-tunnel sections. That figure, based on general economic models, would be for the peak of construction, including indirect jobs and "induced" jobs created when tunnel dollars circulate in the community, a spokeswoman said later.

Times staff reporter Jonathan Martin contributed to this report.

Mike Lindblom: 206-515-5631 or mlindblom@seattletimes.com