Title
Capitol Extension and I-10 West Light Rail Project Update and Options - Districts 4, 5, and 7
Description
This report provides an update to the Transportation, Infrastructure, and Planning Subcommittee on the Capitol Light Rail Extension (CAPEX) and I-10 West Light Rail Extension (10WEST) projects and requests the Transportation, Infrastructure, and Planning Subcommittee recommend to the City Council to either select a new CAPEX Locally Preferred Alternative (LPA) route (Option 1) or re-evaluate other high-capacity transit alternatives to serve West Phoenix (Option 2). The CAPEX project is currently in the Federal Transit Administration’s (FTA) Capital Investment Grant (CIG) program to qualify and compete for discretionary funding. The deadline for the first phase of the CIG process, known as Project Development, is April 2026 and requires a policy decision by City Council to move forward.
THIS ITEM IS FOR DISCUSSION AND POSSIBLE ACTION.
Report
Summary
The CAPEX and 10WEST light rail extensions were included in the Transportation 2050 (T2050) investment plan approved by the City of Phoenix voters in 2015 and were originally envisioned as one project. In 2016, the single project was separated into two phases to accommodate reprioritization of other light rail project investments. The CAPEX project is designed to extend light rail service from downtown Phoenix to the State Capitol Mall, with a future phase planned to connect to I-10 West and to the Desert Sky Transit Center at 79th Avenue and Thomas Road.
In 2019, the City Council instructed staff to perform a re-evaluation of the CAPEX and 10WEST projects, both from a technical perspective and to seek further community feedback. The technical analysis and public input at that time both supported light rail as the preferred transit mode for this corridor, citing higher ridership potential, operating cost efficiencies, increased capacity and strong public support.
In 2021, the City Council approved the current LPA for CAPEX, which was a single-track loop configuration from 3rd Avenue to 19th Avenue along both Washington Street and Jefferson Street (also called the 19th Ave Loop). However, when the State Legislature negotiated Proposition 479 in 2023, Senate Bill 1102 was passed into law, which prohibits light rail within 50 yards of the Capitol complex, specifically the area with a boundary of 17th Avenue on the East, Adams Street on the North, 18th Avenue on the West and Jefferson Street on the South. This legislative action eliminated the ability to implement the previously adopted CAPEX LPA or 19th Ave Loop. As a result, Valley Metro and City of Phoenix initiated an effort to re-design the route and requested a one-year extension from the FTA to remain in Project Development, allowing time for the City to consider alternative routes. The FTA granted a one-year extension, effective April 2025, which is set to expire in April 2026.
Over the past two years, City staff, Mayor and Council, and Valley Metro have engaged stakeholders, state and county agencies and the community in the redesign process to ensure their feedback is considered ahead of decision making. Initial route options focused on alignments that utilized 15th Avenue North or 19th Avenue North as connection points between CAPEX and 10WEST. Both connection options were deemed non-viable due to significant stakeholder opposition and high project risk considerations. Stakeholder and public outreach efforts have revealed concerns particularly related to:
• 15th Avenue: Concerns included property acquisition/condemnation (five homes impacted), bisection of a historic neighborhood, utility relocation, and impact on the Arizona Supreme Court fiber network.
• 19th Avenue: Concerns included impacts to businesses, legislative relations/accessibility to Capitol buildings, existing traffic congestion, and proximity to freight rail.
Given this feedback, in August 2025, Valley Metro and City staff began to identify three different CAPEX route options, that connected with 10WEST, for community and City Council consideration (Option 1). Additionally, a new option was suggested to re-evaluate high-capacity transit alternatives that may be more economical and efficient to provide transit service to West Phoenix (Option 2). This report discusses both options for consideration.
Options for Consideration
This report includes three CAPEX LPA route options for consideration (Option 1). City staff and Valley Metro considered alternatives based on stakeholder feedback, technical analysis, and financial forecasting. Three CAPEX route options emerged, each of them utilizing a double track on Jefferson Street to address cost and stakeholder concerns. The technical analysis used to identify the three route options were based on rating criteria including engineering, construction, project cost, and timeline. These route options include 16th Avenue North, 16th Avenue South, and 7th Avenue North (Attachment A).
The three CAPEX route options each have a projected number of daily trips ranging from 2,300 to 2,400 based on the FTA Simplified Trips-on-Project Software (STOPS) Model used by Valley Metro. According to the Community and Economic Development Department, the routes display potential for job creation in the range of 10,800 to 14,700 and economic development in the range of $3.2 billion to $4.3 billion (Attachment A).
The new potential 16th Avenue North and 16th Avenue South route options generally scored better than the 7th Avenue North route option on project execution (engineering, operations, cost and project timeline). These 16th Avenue options allow for continuation in the FTA CIG Project Development phase and assume FTA concurrence with the required environmental evaluation or NEPA (National Environmental Policy Act). However, the 7th Avenue North option received the worst rating for having the longest or most challenging timeline because this route would require a pause in FTA Project Development and an entirely new NEPA process, which would delay the project. Attachment B provides the estimated project timeline for each of the options.
Each of the options includes specific underlying assumptions that have been integrated into the attached project timeline (Attachment B). Furthermore, a series of required next steps have been identified for each route option if approved by City Council. These options exhibit varying levels of implementation requirements necessary to proceed. The next major steps for each route option are provided below and are not all inclusive.
16th Avenue North and South Options
• State law (ARS 41-791.02 Section K) requires: “Before entering into any contract or agreement with a city or regional public transportation authority regarding the placement of a light rail station in the governmental mall, the director shall submit the contract or agreement to the joint legislative budget committee for approval. The committee shall approve or reject the contract or agreement not more than one hundred twenty days after the submission.”
• FTA concurrence on environmental re-evaluation for NEPA.
• 16th Avenue North option would require approval to purchase two State owned buildings from the Arizona Department of Administration.
• Valley Metro Board and Maricopa Association of Governments (MAG) Transportation Policy Committee (TPC) approval of the new LPA route no later than March 2026.
7th Avenue North Option
• Valley Metro Board and MAG TPC approval of the 7th Avenue LPA route.
• Pause current FTA Project Development process and initiate a new NEPA evaluation.
Financial Considerations
Financial modeling demonstrates all proposed CAPEX route alternatives could be viable under current federal funding assumptions, provided the project remains eligible to receive federal CIG funding. The FTA CIG Program is a competitive design and construction grant program. Projects are evaluated on defined justification criteria and local funding commitment; a City Council approved LPA is required to enter the next step of the CIG program, called the Engineering phase.
The FTA FY 2025-26 Annual Report on funding recommendations to Congress rated the CAPEX project with an overall project rating of “Medium-High”. Projects need at least a Medium to receive funding recommendations to advance to a full funding grant agreement (FFGA). It is important to note that while the CAPEX project is currently in the FTA CIG Project Development phase, federal funding is not guaranteed and has not been awarded or appropriated by Congress. The CAPEX project would be re-rated prior to entering a FFGA.
The total estimated costs and funding sources for the CAPEX route alternatives are provided in Attachment C. Cost estimates provided are based on assumptions, including T2050 cash flow modeling that assumes continued sales tax growth and that FTA CIG funding is awarded by Congress. If any of the assumptions used were to change or not be realized, project viability may be at risk. Estimated project costs for each CAPEX route option range between $608 million to $648 million, with federal, regional, and local sources identified. Project cost estimates for the 10West project are also provided in Attachment C and are subject to change.
Over the last few years, scrutiny about the CAPEX project has intensified. Some of the most frequently cited concerns include cost per mile, ridership potential, business and neighborhood disruption and/or displacement, and stakeholder uncertainty, particularly with the State of Arizona. Construction costs (labor and materials) have dramatically increased in recent years, in metro Phoenix and nationally. This is particularly evident in the cost per mile. The last two light rail extensions in Phoenix (Northwest Extension Phase II and South Central Extension/Downtown Hub) had an average cost of approximately $250M per mile whereas the three CAPEX route options (16th Ave. North, 16th Ave. South, and 7th Ave. North) are estimated to cost approximately $468M - $498M per mile depending on which option is selected. The construction industry has seen steep inflation during and following the COVID-19 pandemic. Maricopa County’s construction price growth has outpaced national averages, being one of the fastest growing regions in the nation. Valley Metro and City of Phoenix are evaluating new and different ways to contain costs and be innovative with materials, contracting methods, and acceleration opportunities.
Due to the identified CAPEX challenges, it was suggested by the City Manager that if the City Council decide not to identify a new CAPEX LPA route an option could be to work with partner agencies including Valley Metro, Arizona Department of Transportation, and MAG to re-evaluate other economical and effective high-capacity transit alternatives to provide service to West Phoenix (Option 2). This option would require notification to the FTA to formally exit CIG Project Development.
If Option 2 is chosen, staff request specific direction from City Council on what high capacity transit alternative(s) to evaluate and would work with partner agencies to develop a comprehensive re-evaluation work plan that incorporates the following steps:
• Develop a scope for re-evaluation of high-capacity transit investment options to provide transit services to West Phoenix.
• Develop a preliminary timeline and associated estimated cost, which may require execution of a new funding agreement.
• Coordinate with the FTA and regional partners as necessary to evaluate options and funding opportunities.
• Community and stakeholder engagement on the implementation plan.
Staff would plan to provide an update to the City Council on the comprehensive re-evaluation work plan and next steps by Fall 2026.
Policy Direction
City staff and Valley Metro request policy direction and action to either adopt Option 1 or Option 2 ahead of the FTA CIG Project Development extension expiration in April 2026. A summary of each option with pros and cons is provided below.
Option 1: Select a new CAPEX LPA light rail route (16th Ave. North, 16th Ave. South, or 7th Ave. North)
Pros
• Maintains progress in federal funding process and planned Revenue Service Date.
• Serves as first phase of a light rail extension to West Phoenix, creating a funding offset for the 10WEST project.
• Keeps the CAPEX project on track to utilize Prop 400 and T2050 funds as planned.
• Leverages existing analysis, outreach and procurements completed and/or underway.
Cons
• Requires a definitive decision on alignment (e.g., 16th Ave. North, 16th Ave. South, or 7th Ave. North) despite potential stakeholder concerns and/or project challenges.
• The project could face a substantial risk if a NEPA extension is required or the inability to complete the Federal CIG application process within the established time frame.
• Utilizes a significant amount of T2050 funds that could be used on other high-capacity transit projects.
Option 2: Consideration of other alternatives to provide high-capacity transit options to West Phoenix with or without the CAPEX extension. This would happen outside of the current federal funding timeline constraints. Formal communication will be required to inform the FTA that the City intends to evaluate other alternatives.
Pros
• Provides additional time to evaluate and study alternatives without the immediate pressure of the April 2026 FTA CIG Project Development deadline.
• Allows staff and partner agencies to vet alternatives and re-connect with the community, potentially identifying other efficient high-capacity transit alternatives.
Cons
• Forfeits current eligibility for federal CIG funding, which is essential to the current financial structure and stops project advancement.
• May delay providing high-capacity transit service to West Phoenix.
• Requires a major update and communication to all funding partners and community stakeholders regarding project timelines and funding reallocation.
Community Outreach
Community and stakeholder input is essential to decision-making on either Option 1 or Option 2. Valley Metro and staff have consistently conducted community engagement to gather feedback throughout the CAPEX project development and preliminary design stages. Building upon this foundation, a more focused outreach effort to inform stakeholders and the community of the two options to be considered by City Council commenced the week of November 10, 2025. Outreach and advertising have consisted of in-person and virtual public meetings, also hosted by Council offices, pop-up events at local business and community locations, canvassing, notification to businesses and residents along the potential CAPEX routes, mailers, flyers, social media posts, media engagement, and distribution of feedback forms asking for input on the two options. This effort will continue through January 2026.
Below is the most recent update on community engagement (as of December 8, 2025).
1,629 feedback forms received:
• 62% favor moving forward with CAPEX (Option 1)
• 38% favor re-evaluation (Option 2)
Outreach was conducted via the following methods:
• Five public meetings with 215+ attendees
• Six tables at community events or local businesses
• 26+ media stories in print and broadcast
• 1:1 stakeholder engagement
• Social media posts generating 227,359 impressions
• Email communication to 2,000+ subscribers
• Print flyer distribution to local neighborhood groups, events and at light rail stations
Concurrence/Previous Action
The Citizens Transportation Commission (CTC) considered this item at the December 4, 2025 meeting and did not reach a majority vote on either Option 1 or Option 2, and therefore no recommendation is moved forward for City Council consideration. Attachment D includes the CTC December 4, 2025 summary meeting minutes on this item for reference.
Request for Action
Staff respectfully request the Transportation, Infrastructure and Planning Subcommittee provide a recommendation to City Council to either select a new CAPEX LPA light rail route and continue within the FTA’s CIG Project Development program (Option 1) or re-evaluate other high-capacity transit alternatives to serve West Phoenix (Option 2). This item will be presented to City Council for consideration and action on January 27, 2026.
Location
Council Districts: 4, 5, 7
Department
Responsible Department
This item is submitted by Deputy City Manager Amber Williamson and the Public Transit Department.