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The Oregon Department of Transportation is forging ahead with raising funds for the Interstate 5 Rose Quarter Improvement Project after learning that it will not receive a $750 million federal grant.

ODOT was notified last week that the project was not selected for a federal INFRA infrastructure grant, dealing a significant blow to the highway expansion proposal.

Nevertheless, ODOT remains committed to the project, said Megan Channell, Rose Quarter project director.

鈥淭he absence of this grant funding in this cycle does not change ODOT鈥檚 commitment to this project or to the community,鈥� Channell said in an interview.

The project has $600 million in available funding, but ODOT鈥檚 cost estimates range from $1.5 billion to $1.9 billion, leaving a yawning financial gap.

Channell said ODOT would continue to pursue federal and state funding alongside community partners such as Albina Vision Trust. ODOT has given no indication that it is reevaluating the project鈥檚 scope.

鈥淥DOT remains committed to building a project that is meeting the community vision, which is to reconnect and realize the thriving Albina neighborhood while also making sure that we’re addressing the key safety and operational issues on I-5,鈥� Channell said.

The failed grant application came after a successful one: In March, ODOT was awarded a $450 million Reconnecting Communities grant by the U.S. Department of Transportation to build highway covers over I-5 that would reconnect the Lower Albina neighborhood.

The funding situation has left ODOT with money to begin building highway covers over I-5 to reknit the street grid, but not funding to improve the interstate itself.

The U.S. Department of Transportation鈥檚 denial of the INFRA grant application adds urgency to the 2025 state legislative session, when legislators are expected to grapple with a major transportation funding bill. The Legislature鈥檚 Joint Committee on Transportation recently completed a 13-city summer tour to hear from constituents and drum up support.

鈥淲hat鈥檚 being highlighted there is, again, a need for transportation funding in the 2025 legislative session,鈥� Channell said. 鈥淪o, we remain focused on partnering with our legislative partners on that front, and Rose Quarter is part of the Legislature鈥檚 consideration of focusing on unfinished business.鈥�

The Rose Quarter project would provide a major boost to the state鈥檚 construction industry. A series of megaprojects, including the recently completed Portland International Airport main terminal and the proposed Interstate Bridge replacement project, has helped keep contractors afloat while high interest rates have led private-sector project teams to pull back.

鈥淚t鈥檚 really important to offset some of the sagging we鈥檝e seen on the private side,鈥� said Mike Salsgiver, executive director of the Associated General Contractors鈥� Oregon-Columbia chapter.

The political controversy over the project has impacted its funding, he said in an interview.

鈥淚t is clear that the community is not fully aligned on what its priorities are for that project,鈥� Salsgiver said. 鈥淚 think once that happens, that鈥檒l help either the current administration or a new administration make a fully informed, positive decision.鈥�

The I-5 Rose Quarter Improvement Project was authorized by the Legislature in 2017. Some advocates have framed finishing the project as a matter of keeping the state鈥檚 promises.

鈥淭here were commitments made in House Bill 2017 that have to be finished in order to maintain trust in this process,鈥� Jana Jarvis, a lobbyist for the Oregon Trucking Associations, said during last week鈥檚 work group meeting.

ODOT says the I-5 project would reduce congestion, improve safety and modernize aging infrastructure. Critics have blasted the Rose Quarter proposal, saying it amounts to an expensive boondoggle that won鈥檛 solve traffic woes.

Joe Cortright, a Portland economist and ODOT critic, said the state should reexamine some aspects of the project鈥檚 scope, such as 160-feet freeway widths in some areas. Cortright is involved with two lawsuits brought by community group No More Freeways challenging the project.

鈥淲e think there is a real opportunity to rightsize this project,鈥� he said in an interview. 鈥淚f they were to do so, it would be more affordable, have fewer environmental impacts and be more likely to get done.鈥�