The Oregon Transportation Commission voted Thursday to move construction of the I-5 Rose Quarter Improvement Project to its next phase despite limited funding. The Oregon Department of Transportation will use $167.7 million to pay for work set to begin in 2027.

Last year, ODOT received a $450 million grant from the Federal Highway Administration via its Reconnecting Communities and Neighborhoods (RCN) program. This money was intended to pay for the Broadway Weidler Phase 1 package, including construction of the southern portion of the highway cover, completion of the southbound I-5 auxiliary lane and shoulder from I-405 to the Moda Center, and other improvements.

ODOT was able to obligate $67.5 million of the RCN funding before the remainder ($382.5 million) was rescinded by the 2025 Budget Reconciliation Act. The obligated funding can be used for preliminary engineering as well as work related to right of way and utilities.

There is $479.9 million in total funding available for the I-5 Rose Quarter Improvement Project, a staff report states. Travis Brouwer, ODOT deputy director of revenue, finance and compliance, said that funding is not sufficient to finish the project.

The available funding includes $380 million in House Bill 2017 Urban Mobility Strategy funding. Of that portion, currently $167.7 million can go toward phase 1 construction, Brouwer said.

The funding also includes $32.4 million in federal, state and local money for preliminary engineering and phase 1A construction.

“Phase 1A packages work in the corridor both in the north end near the I-5 interchange and at the south end at the I-84 interchange,” said Monica Blanchard, interim program director of the I-5 Rose Quarter Improvement Project.

Phase 1A is under way and scheduled to finish in late 2026. Its focus is on bridge maintenance, stormwater-related work, and early safety improvements. Subcontractors have been selected, the right of entry permit has been finalized, erosion control has been installed on site, and stormwater work on the drainage pond has started, Blanchard said.

ODOT completed a value engineering study and cost reduction workshop after May’s Oregon Transportation Commission meeting. A cost reduction concept of micropiles for the highway cover foundation has been adopted. According to ODOT, micropiles offer flexibility in construction and are better suited to address subsurface obstructions if encountered. Micropiles use smaller drilling equipment than other traditional foundation types and can be better mobilized in restrictive areas. The results are a $45 million cost reduction and no impact on the construction schedule.

ODOT will continue to consider other ways project costs can be lowered, Blanchard said. In fact, eight other concepts are being evaluated. However, officials have ruled out removing the second auxiliary lane on I-84 to Weidler Street, reducing the width of the highway within the highway cover, and using buried concrete arches in lieu of girders.

Moving forward, ODOT presented three construction options to the commission. Option 1 would be construction of phase 1B with the available $167.7 million. Crews would complete some of the operational and safety improvements on I-5 between I-84 and the Broadway/Weidler off-ramp, including widening over the Rose Quarter Transit Center and removing the pinch point at the I-84 northbound on-ramp. Construction would begin in 2027, after completion of phase 1A, and allow for a continuous transition from phase 1A to phase 1B.

Option 2 would delay construction of the full Broadway Weidler Phase 1 package until the third quarter of 2028 if additional funding is secured. ODOT would use remaining preliminary engineering funds, including the RCN grant, to complete design for all of phase 1.

Under option 3, construction funding for the Broadway Weidler Phase 1 package would be reallocated or reprioritized legislatively. Design of Broadway Weidler Phase 1 would be completed with federal RCN grant funding. The team would focus on completing the phase 1A construction package. The rest of the budget would be allocated to other ODOT priorities. ODOT staff did not recommend this option because the project cost would grow each year.

However, a fourth option was proposed by Metro, the city of Portland and Albina Vision Trust. In a letter, the partners proposed something similar to option 1 but with ODOT working with them on phasing and scope of phase 1B and phase 1C.

Commissioners voted unanimously to advance option 4, which directs ODOT to work collaboratively with local and regional partners to analyze the proposed construction scope and develop a feasible plan. ODOT will return before the commission in March or April with a progress report.

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An effort to widen Interstate 5 through Portland and build developable highway covers in Albina stands to lose $412 million in federal funding, a state analysis found.

The I-5 Rose Quarter Improvement Project will lose $150 million in 2027-29 and $262 million in 2029-31 after the passage of a Republican-led funding bill, according to an analysis by the Oregon Department of Administrative Services‘ Chief Financial Office.

President Donald Trump’s so-called “Big Beautiful Bill,” also known at House Bill 1, rescinds unobligated funds from the Neighborhood Access and Equity grant program, according to the state’s preliminary analysis, which was released on Monday.

The Trump administration’s move to pull previously approved funding puts the project’s immediate future in doubt, according to the state analysis.

“While an initial $60 million contract for paving and stormwater work that is part of phase 1 has advanced, constructing the remainder of phase 1 and phase 2 will be exceedingly difficult, if not impossible, without federal funding,” the Financial Office stated.

The funding rescission may cloud the project’s future, because it cannot be completed without hundreds of millions of dollars in additional funding, and state transportation funding is also stretched. A special session called for Aug. 29 is expected to produce money for operations and maintenance, but not major infrastructure projects such as the I-5 improvements.

The Rose Quarter project is expected to cost $2.1 billion, according to the Oregon Department of Transportation‘s most recent estimate.

“Any pause or delay will result in project cost escalation and removal of scope elements to bring down costs would significantly impact community support,” the analysis adds. “ODOT continues to evaluate the committed project financing, weighing options, as well as considering alternative investments since the total financing for the Rose Quarter Improvement Project is no longer secured.”

Joe Cortright, an economist and frequent ODOT critic, said the agency should pause the project until funding is secured.

“The idea that you would start work on this project, move forward with this project, when you’re at least $1 billion short makes no fiscal sense at all,” he said.

ODOT officials said they have no intention of delaying initial construction on the I-5 Rose Quarter Improvement Project. Construction will begin this summer and continue into late 2026, spokeswoman Rose Gerber stated in an email.

There are no plans for a ground-breaking ceremony, Gerber stated.

The first phase will include the extension of an auxiliary lane within the existing footprint of I-5 between the I-84 and the Morrison/OMSI exits, along with stormwater improvements and bridge maintenance. The work was previously approved by the Oregon Transportation Commission. Future phases are less clear.

“The agency is reviewing project financing and determining next steps,” Gerber stated. “ODOT is committed to working with its partners to secure additional funding to construct the project.”

Cortright said he’s concerned that ODOT intends to begin the project and then request a bailout from the Legislature. That is how he described ODOT paying for the Abernethy Bridge project at Oregon City.

“They started work on it, so they’re throwing more money at it,” Cortright said. “I think the ODOT plan is to repeat that process. Get started on it … and then go to the governor and the Legislature and ask for more.”

Whether ODOT’s plans to reconnect the Albina neighborhood with a freeway cover over I-5 will happen also remains to be seen. The cover has a been a key demand of Portland’s Black community, which is seeking to reconnect the North-Northeast Portland neighborhood that was partially demolished via 20th-century urban renewal practices.

A spokesperson for Albina Vision Trust, the group spearheading the effort, did not respond to messages requesting comment on Thursday.

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Initial construction of the I-5 Rose Quarter Improvement Project is scheduled to begin next month despite the recent loss of $412.5 million in federal funding.

The Oregon Transportation Commission on Thursday authorized the estimated $75 million phase 1A to proceed. Construction is scheduled to begin on Aug. 25 and continue through fall 2026. That work will primarily be deferred maintenance and stormwater management. It will involve performing bridge rail retrofits, constructing stormwater treatment facilities for highway runoff to the Willamette River, handling roadway asphalt paving and lighting, installing signage and pavement markings, and building the southern portion of the southbound auxiliary lane between Interstate 84 and the Morrison Bridge.

Phase 1 is currently expected to cost around $549.75 million. Last year, the Oregon Department of Transportation (ODOT) received a $450 million Reconnecting Communities and Neighborhoods grant from the Federal Highway Administration. To date, $37.5 million has been obligated for preliminary engineering of phase 1 and relocating utilities. But the remaining $412.5 million was rescinded as part of the One Big Beautiful Bill Act signed into law by President Trump earlier this month.

Approximately $146.8 million has been spent on the project to this point. Currently, there is around $303.1 million available, and that is expected to pay for professional engineering services tied to phase 1 ($51.3 million), property acquisition to gain right-of-way for phase 1 ($30.3 million), utility relocation for phase 1 ($9 million), all work in phase 1A ($75 million), and other phase 1 construction ($137.5 million).

The commission on Thursday authorized ODOT to continue design of phase 1. The work will involve building the southern portion of the highway cover (30 percent of the cover length) and multimodal improvements, completing the southbound auxiliary lane and shoulder from Interstate 405 to the Morrison Bridge exit, extending the northbound auxiliary lane and shoulder under the highway cover, installing signage for highway cover safety and construction, and widening Holladay/Hassalo Bridge, according to the project’s website. Construction is expected to start in early 2027 and finish in 2030.

Travis Brouwer, ODOT assistant director of revenue, finance and compliance, said the agency has enough money to complete phase 1A but not phase 1. There is $137.5 million available for phase 1, but construction of the highway cover is expected to cost from $400 million to $500 million. The $137.5 million will pay for construction of the northbound I-5 auxiliary lane between I-84 and the Weidler Road ramp.

The commission considered the option of pausing construction of phase 1A and seeing if funding will be made available for phase 1 by the Oregon Legislature but ultimately decided to move forward after weighing risks such as cost increases due to delays and possible lost revenue.

As part of Thursday’s action, ODOT will continue assessing cost reduction concepts to bring the total project budget within the $1.5 billion to $1.9 billion range.

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The Oregon Legislature‘s failure to pass a transportation funding bill is beginning to impact projects around the state.

On Friday, the Oregon Department of Transportation sent a notice that it was canceling a chip seal project on Route 34 near Corvallis. Work was set to begin on Monday. Other chip seal projects were canceled in Union and Grant counties in eastern Oregon.

“ODOT is experiencing a significant and immediate funding shortfall that is resulting in staff layoffs and reduced capacity across the agency,” the department stated.

ODOT began implementing layoffs on Monday, with 483 employees let go. That number was expected to rise to 600 to 700 later in the day. A second wave of layoffs is planned for early 2026 without further funding from the Legislature, the governor’s office stated Monday.

“Consequences to essential transportation services are imminent across the state,” Gov. Tina Kotek stated on Monday. “This is not business as usual. These layoffs constitute an emergency in Oregon’s transportation system that will hurt every part of Oregon.”

Hundreds of vacant positions held open in the past four years will be permanently eliminated, the governor’s office warned.

The layoffs list totals 11 pages, and includes engineering specialists, transportation maintenance specialists and information systems specialists. Unionized staff who receive layoff notices may be able to move into other positions, both vacant and filled, following specific processes, an ODOT spokeswoman stated in an email. As such, the impacts to specific regions and programs may not be known for months.

Kotek cautioned that Oregonians would begin noticing reduced services, including fewer potholes getting filled, reduced pavement maintenance and road striping. Brush clearing and fire-prevention work will also be scaled back.

As winter approaches, drivers can expect slower and less frequent snow and ice removal, particularly in rural and mountainous areas, the governor’s office stated.

“This emergency was preventable, and we still have time to intervene,” Kotek stated. “I have not and will not stop fighting for Oregonians who rely on us to keep our roads safe and people and products moving. Come winter, without a shared commitment to solve this crisis from partners and lawmakers, Oregonians will be left out in the cold — literally.”

The funding shortfall leaves ODOT relying on diminished gas tax revenue, vehicle registration fees and other sources. A monthslong effort to pass a landmark transportation bill failed after opposition from Republicans and some Democrats in the Legislature.

Some observers have called on Kotek to reconvene legislators in a special session.

Beyond short-term maintenance needs, the agency’s funding troubles put the state’s big freeway projects — including the Interstate 5 Rose Quarter Improvement Project — at risk, said Joe Cortright, president of City Observatory and a longtime ODOT critic.

The transportation bill’s failure “puts them in a really dire situation,” he said. “The question is whether ODOT should be taking on a $2 billion project for which it has no money at the same time it’s laying off hundreds of employees. Doesn’t make much sense to me.”

Cortright also questioned how much of a $450 million federal grant, announced in March 2024, for highway cover design and initial construction of the I-5 project will be realized.

“It’s very much a question up in the air as to how much of that money continues to be available,” he said.

The Legislature in this session approved $250 million for the Interstate Bridge replacement program. That followed the 2023 Legislature’s approval of House Bill 5005, which identified Oregon’s eight-year plan to allocate $1 billion for its share of the project. An updated price tag is expected soon; the most recent estimate was $6 billion.

Editor’s note: This story has been updated to reflect that the 2025 Oregon Legislature approved $250 million for the Interstate Bridge replacement program.

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