The Oregon Department of Transportation (ODOT) has lost the majority of the funding it was counting on to construct the first phases of its I-5 Rose Quarter project. With a hostile federal administration and chaos in the Oregon Legislature, it’s unclear when or if the department can expect more money for the project. Even so, the Oregon Transportation Commission (OTC) just gave ODOT the green light to start initial work on the Rose Quarter plan—while acknowledging the uncertain path forward.

ODOT and Rose Quarter project leaders talked to the OTC about the plan’s challenges at a July 24 meeting, and it was clear they wanted the transportation commission to give them permission to start construction next month. They emphasized the consequences of pausing work at this point in the project, saying further delays would only increase future costs and create more hoops to jump through.

ODOT’s plan for the Rose Quarter project includes expanding I-5 between I-84 and I-405 by adding auxiliary lanes to each direction of the freeway. The agency also plans to construct caps over the freeway to reconnect the Albina neighborhood, a historically Black district bisected by the original I-5 construction in the 1960s. The plan would make other changes to the streets surrounding the freeway, too, including with a new pedestrian and bicycle bridge over I-5 near the Moda Center. In total, ODOT expects the project to cost $2.1 billion. The agency currently has only a small fraction of that budget on hand.

Others, including contractors working with ODOT and advocates for a plan to cap I-5 through the Rose Quarter and reconnect the historically Black Albina neighborhood, also urged commissioners to give the go-ahead. Meanwhile, critics slammed the project for its economic and environmental footprint. 

Commissioners ultimately voted to support ODOT’s plan to start early Rose Quarter project construction in August, but OTC members said their approval now doesn’t guarantee future support. That will depend on the financial outlook.

“I really feel strongly that we need to move forward with [initial construction],” OTC Chair Julie Brown said at the July 24 meeting. “But everyone in this room needs to understand that beyond that, there is no money. It’s going to be up to us collectively to figure out how we’re going to fund the rest of this.”

ODOT would begin construction on the project amid mass layoffs at the agency, triggered by the Oregon Legislature’s failure to approve a transportation funding package. Governor Tina Kotek recently announced plans to reconvene the Legislature later this summer for a special session focused on transportation, but it’s unclear what that effort will yield.

Lacking complete funding, ODOT broke the full project into multiple parts. Until recently, the agency said it had the money to begin work on what it dubbed phase 1A and phase 1 of the project. Phase 1A, expected to cost $75 million, consists of maintenance work, including stormwater facility construction and seismic retrofits to two I-5 bridge structures. Through phase 1, expected to cost about $560 million, ODOT would complete the freeway widening on the southbound section of I-5, partially construct the northbound expansion, and begin work on a small section of the freeway cap plan.

One major element driving ODOT’s decision making: The agency has already signed agreements with contractors for the initial phase of the project, leaving the agency open to lawsuits if it halts its plans now (and putting contractors in tough economic positions). Commissioners also determined the stormwater and deferred maintenance elements of phase 1A would be necessary regardless of whether the rest of the project proceeds. With that in mind, the OTC gave ODOT permission to start work on phase 1A. 

The agency planned to fund a good chunk of its phase 1 work with a $450 million grant allocated by the Biden administration. But most of that funding was rescinded earlier this month, when President Trump’s budget reconciliation bill passed Congress. ODOT also didn’t get any new funding from the Oregon Legislature, which failed to pass a transportation funding package during the regular legislative session earlier this year. 

Without the federal grant, ODOT can pay for phase 1A using money allocated by the Legislature in 2017. But that leaves the agency with only about $137 million for phase 1, roughly a quarter of the funding required to complete that portion of the project. When it comes to anything beyond phase 1— completing the freeway cap, for example— ODOT has nothing. 

The question on the table at the July 24 OTC meeting: Should ODOT break ground on the first phase when it doesn’t have the money to pay for the rest of the plan? Many project opponents answered that question with a firm “no.” 

“Oregon is in crisis. Hundreds of safety-critical ODOT employees have been given layoff notices,” Doug Allen, representing the Association of Oregon Rail and Transit Advocates, said. “The obvious solution is to put the Rose Quarter expansion on ice…Please act now to avoid disruption and disaster.”

ODOT’s funding scarcity has pitted Oregonians against each other, as state transportation officials are forced to recalibrate priorities.

Portlander Jordan Lewis said he was disheartened to hear about TriMet’s plans to reduce transit service due to a lack of funding, and asked the OTC to consider the "opportunity costs” of embarking on a $2.1 billion project “in a system where every dollar counts.” Lewis and others said they believe when the Legislature reconvenes for a special session in August, lawmakers put other, more immediate priorities ahead of the Rose Quarter megaproject. 

“I’m testifying today [to ask] that you pause the Rose Quarter project, not necessarily on the merits of the project, but because of the context of the moment—the federal sabotage, state dysfunction and historic underfunding of our entire transportation system,” Lewis said. “If we want to build a Rose Quarter project, we first have to find the funding for it. On the way, we should probably find funding to keep our existing roads and bridges in decent shape, keep our transit agencies running for people who depend on them, and make our dangerous, high-speed roads habitable.” 

Others had a different perspective. 

JT Flowers, government affairs director at Albina Vision Trust, said the project is the “result of years worth of community engagement, a community-brokered compromise created through a half decade of organized resistance.” 

“I did not come here today to litigate with white environmentalists who have absolutely no connection to our people, our pain, or our collective struggle for progress,” Flowers said. 

“We expect that our state leaders, both in the Legislature and in the governor's mansion, will match our unwavering commitment to not only delivering this project, but delivering on the promise of what Oregon can be.” 

For years, the Rose Quarter project has been touted for its expected benefits to minority contractors and workers, specifically Black-owned construction companies.

Nate McCoy, executive director of Oregon’s chapter of the National Association of Minority Contractors, said the project and its commitment to a diverse workforce is more important than ever, as the federal government attacks diversity, equity, and inclusion commitments. 

“We want to make sure the harm is repaired by getting our folks to work. I know you all are champions for seeing people of color and small businesses grow in our state, and this is the time to do it,” McCoy said. “Please, please, please, help us bring this project across the finish line.”

ODOT has committed to awarding roughly 20 percent of the total Rose Quarter project contract value to minority-operated businesses, and set workforce diversity targets for racial minority groups and women. (Reports show ODOT has largely awarded contract work on its financially lucrative megaprojects to white-owned businesses, with very little money going to Black construction firms.) 

But it’s unclear how ODOT will be able to cobble together funding for this project to meaningfully honor their diverse workforce and Albina reconnection commitments. 

Tiffani Penson, the new director of ODOT’s Urban Mobility Office overseeing the Rose Quarter project, told OTC members the agency’s current funds will only go so far in phase 1, noting “$137 million is not enough money to start dealing with the cap in phase 1.” Penson noted it’s possible ODOT could use that money for some relatively minor components of the project, but they will "definitely need more money to start phase 1.”

Members of the OTC made no promises to help ODOT find that money.

“I want us to be very mindful [not to] promise anyone that we can make any progress on phase 1 at this moment in time,” Commissioner Phil Chang said. 

Commissioner Brown doubled down on that caveat, trying to ensure project stakeholders fully understood the OTC was “not saying we are going to move forward with the complete Rose Quarter.” 

ODOT plans to start work on the $75 million phase 1A next month. The construction, which will include addressing stormwater problems near the I-5 and I-405 intersection and bridge work near the intersection of I-5 and I-84, is set to last until fall 2026.