A $400 million economic stimulus grant from the federal government for the proposed Transbay Terminal in San Francisco will provide the final piece of financing for construction of the first, $1.2 billion phase of the terminal project. However, federal transportation officials appear to have stepped into the middle of a dispute between local officials and the California High Speed Rail Authority over the precise terminus for high-speed rail in San Francisco by siding with the locals. In addition, one rail authority board member, former judge and state Sen. Quentin Kopp, said that only the rail authority may allocate the $400 million to the San Francisco project.

The $4 billion Transbay Terminal is proposed to be a 900,000-square-foot station for high-speed rail, CalTrain commuter rail, and local and regional buses (see CP&DR Public Development, August 2004). The facility would replace a dilapidated and undersized terminal. Groundbreaking was originally scheduled for 2008, but litigation, financing issues and engineering problems have caused delays.

Only days after federal officials promised a $171 million loan for the Transbay Terminal project, U.S. Transportation Secretary Ray LaHood announced on January 28 the project would receive a $400 million stimulus grant as part of $2.25 billion for the state's high-speed rail system. LaHood insisted the money was designated for a terminal that would serve as the San Francisco terminus of the high-speed rail line. But the rail authority disagrees with the alignment and terminal plans adopted by the local Transbay Joint Powers Authority.

Kopp told the San Francisco Chronicle that the rail authority will decide how to spend the $2.25 billion federal grant, and that no federal money may be spent on the Transbay Terminal until the high speed rail authority completes an analysis of alternatives in 2011.