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Old 02-07-2019, 09:05 AM   #381
tangent
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Re: Red Line / Blue Line Connector

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Originally Posted by bigpicture7 View Post
Honest question:
What about the state issuing municipal bonds to fund this?

-Administered by the state (so, in the end, it's public money)
-Allows anyone who supports the cause to get involved
-Isn't a mere donation because it will pay a (modest) dividend to the investor
-Could allow for both citizen and institutional investors (e.g., companies who stand to gain from the project can actively support it without the project itself becoming privatized).

Datadyne,
If you & TM colleagues agree, it would be great if TM could advance this as a near-term funding model. Muni bonds are nothing new at all, they're issued all the time (e.g., I believe Massport has a history with this)
You realize bonds need to be paid back? Getting financing isn't the issue, it is paying it back without necessarily having to raise taxes/fares on the system/society as a whole. At least to the extent that the whole system isn't improved...

I think what you kinda are getting at though is the disconnect between funding transit and the existing and future needs of ridership.

If we want a growth model of transit improvements then there does need to be some way to make those improvements directly funded by the increased revenue. As it is now every transit proposal is evaluated as a cost first and then as an return on investment as an afterthought. Often with a wink and a nod that it is really just a construction jobs project and not really going to have a ROI. If we want sustainable transit then growing the system needs to grow the direct revenue with some pay back period that can be forecast reliably.

So back to bonds. If we can go to a toll bridge type of model, where extensions like this proposal can be paid for by an extra charge (time limited to just pay for the capital costs) on blue line riders choosing to get on or off the blue line at the new station, then perhaps that is a model for expansion of the system in general.

The downside is if you create a perverse incentive to neglect other infrastructure in favor of the infrastructure that has the tolls... like the way the Pike used to (still does?) cost way more per mile to maintain than the other non-toll roads.
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Old 02-07-2019, 09:06 AM   #382
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Re: Red Line / Blue Line Connector

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Originally Posted by datadyne007 View Post
The Kendall Sq people and Tom O'Brien from HYM (Suffolk Downs) were actually there/submitted comments. We've got them on board.

I wholeheartedly disagree that we should be putting the onus on private developers to fund these things though, like Boston Landing and Assembly. The T (state) needs to be building these things for their citizens without extorting developers.
Isn't it the same thing, though? The Commonwealth gets money from all sectors of the public, and that's where funding for RBX would come from.

Since MBTA funding comes primarily from sales tax, gas tax, and fares, you're essentially arguing that you'd rather citizens across the State who don't use RBX fund the project than the developers who will make a direct profit from the work. Beyond that, you're arguing that money should be diverted from other T capital projects to pay for this when there may be an appetite for private money to offset the cost.

At least shaking the tree seems appropriate in this case, particularly when the cost is low enough that chump change from people like HYM and MGH can make a serious dent.
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Old 02-07-2019, 09:25 AM   #383
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Re: Red Line / Blue Line Connector

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If we want a growth model of transit improvements then there does need to be some way to make those improvements directly funded by the increased revenue. .... If we can go to a toll bridge type of model, where extensions like this proposal can be paid for by an extra charge (time limited to just pay for the capital costs) on blue line riders choosing to get on or off the blue line at the new station, then perhaps that is a model for expansion of the system in general.
I think this doesn't work.

Transportation is a network (obviously), and any change anywhere in the network affects the performance of the whole thing.

It's just not accurate to say that the riders exiting at a new station would be the only people who benefit from a new extension (e.g. people driving though the Sumner Tunnel at 8:30am would benefit too, among countless other examples).

Not to mention that the transport network is tightly couple with real estate and land value etc.
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Old 02-07-2019, 09:41 AM   #384
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Re: Red Line / Blue Line Connector

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I think this doesn't work.

Transportation is a network (obviously), and any change anywhere in the network affects the performance of the whole thing.

It's just not accurate to say that the riders exiting at a new station would be the only people who benefit from a new extension (e.g. people driving though the Sumner Tunnel at 8:30am would benefit too, among countless other examples).

Not to mention that the transport network is tightly couple with real estate and land value etc.
Prove it. I mean you are right, undoubtedly at least in part, but if you can get to a mathematical model then you could make sure the costs get distributed accurately and then you can fund growth based on projected growth that you are enabling.

Too often it seems that the argument ends at if you build it they will come... of course if you build it then someone is going to use it, but that isn't sustainable growth.

Some infrastructure projects seem so obvious, this one is close, but if you can find a funding model that actually funds it based on demand modeling, bonding out the project and paying back the bond with fares... rather than based on political pecking order for pork projects, then you are going to be in a much better place.

Otherwise, it really looks like the only way anyone is able to do the math on new stations around here is if a single owner owns all the surrounding real estate and actually pays for the station or links a development with the construction of the station. Like with Boston Landing and Assembly stations. But that only seems like a funding model good for station projects under $100 million.

Just do the math... total up the costs, divide by projected ridership, decide on a dedicated portion of the fares from that extension or new station, bond out the project and get it done.
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Old 02-07-2019, 09:56 AM   #385
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Re: Red Line / Blue Line Connector

I mean - you could also just pay the debt service for it out of general revenue - property, sales, and income taxes, on the theory that investments like this aggregate into the general prosperity of the commonwealth. The old fashioned term for it is a 'public good'.
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Old 02-07-2019, 10:47 AM   #386
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Re: Red Line / Blue Line Connector

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Originally Posted by CSTH View Post
I mean - you could also just pay the debt service for it out of general revenue - property, sales, and income taxes, on the theory that investments like this aggregate into the general prosperity of the commonwealth. The old fashioned term for it is a 'public good'.
Yes you could, but that brings us back to prioritization. If you use the money you already have then this is bumping $350M worth of projects back in the line. The point of defraying with private money is to make the project more palatable and increase the total pot available for everyone.
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Old 02-07-2019, 10:57 AM   #387
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Re: Red Line / Blue Line Connector

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Originally Posted by datadyne007 View Post
The Kendall Sq people and Tom O'Brien from HYM (Suffolk Downs) were actually there/submitted comments. We've got them on board.

I wholeheartedly disagree that we should be putting the onus on private developers to fund these things though, like Boston Landing and Assembly. The T (state) needs to be building these things for their citizens without extorting developers.
Before I propose a middle way, how about I stake out the other extreme:
Landowners should stop being allowed to work politicians to shower corporate welfare on their parcels. MIT & HYM & MGH all know exactly how valuable RBC will be to their parcels and buildings. Plutocrats show up for FMCB meetings to line their pockets, not because they believe in transit equity. Well-connected Billionaires (individuals and endowments) play parcel flippers based on their ability to turn gravel lots into TOD parcels, just like the McCourts did atop I-90 & Silver Line, by applying just a few coats of palm grease.

Assembly and Boston Landing got built because a clear-thinking owner saw that infill stations have such a freakishly high benefit/cost that they volunteered their share. But none can pretend that the commercial value of transit to landowners is distant, indirect, and mysterious.

West Station is not being built because BU's share could only be extracted voluntarily and therefore partially (and with lots of anti-bus strings attached).

Further, Cities should stop practicing Crony Urbanism: forcing the state to spend billions of general money, but allowing the cities to keep the property taxes
SOMEBODY has to pay for "state" infrastructure, why isn't it fairest and most efficient that the people who most measurably benefit (owners & municipalities) are asked to contribute?

SOME contribution is appropriate from each according to their benefit
- Owners, whose parcel gets a windfall (see: McCourt in Seaport (unpaid) & U2 in Union Square (committed))
- City, whose tax base just scored a win (as Som/Camb see on GLX)
- State, who wants an efficient, mobile workforce & economy (and sees some return in sales & income taxes)
- Feds, who benefit from rising income and climate-responsiveness (and sees some return in higher incomes and improved health)

The Tax Increment Financing that Somerville & Cambridge agreed to for the GLX is pretty much best practice. (I forget what the official Mass name for TIF is, but we have our own acronym, just like we're the RMV/OUI weirdos in an DMV/DUI world). Landowners pay a high% of the incremental additional value of transit to help pay for the transit (and still pocket some).

Here we need both a Land Tax on anything "walkable" to existing transit (to discourage nonsense like the empty parcels 1 block north of Central Sq) and TIF on any new transit.
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Last edited by Arlington; 02-07-2019 at 11:37 AM.
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Old 02-07-2019, 12:15 PM   #388
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Re: Red Line / Blue Line Connector

“The initial 2010 estimate had put the cost of tunneling at $413 million in 2018 dollars. A more recent study found that the tunnel could cost as little as $200 million to construct.

The next step in the MBTA's decision process is to decide with the MBTA Fiscal Management and Control Board whether the connector should be one of the next priorities to tackle by 2020. This discussion is likely to occur by early 2019.”


https://news.bostonrealestate.com/mb...on-hq2-pass-up
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Old 02-07-2019, 12:26 PM   #389
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Re: Red Line / Blue Line Connector

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Originally Posted by stick n move View Post
“The next step in the MBTA's decision process is to decide with the MBTA Fiscal Management and Control Board whether the connector should be one of the next priorities to tackle by 2020. This discussion is likely to occur by early 2019.”


https://news.bostonrealestate.com/mb...on-hq2-pass-up
That's misleading. The next step is to decide whether to fund the project and to put together a plan for how the funding works. Then, they probably do a GLX-style design-build RFP that takes some months for people to respond to, with payments spread out over the likely 2-3 year construction period. Then, you need to work with the City of Boston to get traffic management together, since Cambridge Street is (I think) a City street.

This would not be a priority to tackle "by 2020". The most we'd likely see in 2020 is RFP responses and the selection of a team. 2025 is more realistic for an opening.
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Old 02-07-2019, 01:25 PM   #390
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Re: Red Line / Blue Line Connector

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Originally Posted by Equilibria View Post
That's misleading. The next step is to decide whether to fund the project and to put together a plan for how the funding works. Then, they probably do a GLX-style design-build RFP that takes some months for people to respond to, with payments spread out over the likely 2-3 year construction period. Then, you need to work with the City of Boston to get traffic management together, since Cambridge Street is (I think) a City street.

This would not be a priority to tackle "by 2020". The most we'd likely see in 2020 is RFP responses and the selection of a team. 2025 is more realistic for an opening.
Based on the previous studies of the project I think even getting it open by 2025 would be a real stretch. The reality is funding wouldn't be secured for at least a year, then you have the design phase, I say you would be lucky to break ground by 2023. Lets keep in mind other MBTA projects such as GLX, South Coast Rail etc, all spent several years in design, permitting, funding stages. SCR got it's contract awarded in 2014 and 5 years later is just finishing final design to go out to contractor bidding... Even just environmental impact reports take years.

Also unpopular opinion but I don't think Red/Blue connector should be such a priority for the MBTA, I can think of several other projects that would benefit more people and deserve the funding more can't you? OL extension to roslindale, connecting SL1/2/3 with SL4/5 (silver line phase III), Urban Ring, Indigo Line, Fairmount Line regional rail, (or even Ruggles Station roofing project), etc. But of course all these projects don't benefit large companies and affluent riders so they just kinda get pushed under the rug for now and abandoned. Can someone explain what makes Red/Blue so much more of a priority right now? I feel like some of these other projects would benefit far more people for the cost.
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Old 02-07-2019, 01:43 PM   #391
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Re: Red Line / Blue Line Connector

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Originally Posted by HelloBostonHi View Post
Also unpopular opinion but I don't think Red/Blue connector should be such a priority for the MBTA, I can think of several other projects that would benefit more people and deserve the funding more can't you? OL extension to roslindale, connecting SL1/2/3 with SL4/5 (silver line phase III), Urban Ring, Indigo Line, Fairmount Line regional rail, (or even Ruggles Station roofing project), etc. But of course all these projects don't benefit large companies and affluent riders so they just kinda get pushed under the rug for now and abandoned. Can someone explain what makes Red/Blue so much more of a priority right now? I feel like some of these other projects would benefit far more people for the cost.
Keep in mind that Red/Blue Connector frees up capacity in the most overcrowded portions of the Green (between Park Street and Government Center) and Orange Lines (between Downtown Crossing and State), by giving people more direct transfers.

This, in turn, makes a project like OL to Roslindale, GLX, or heck even Silver Line Phase III, with Green Line to South Boston Transitway, more doable.

I would argue that you are absolutely right that there are plenty of (larger) projects, like Urban Ring or the unmentioned North-South Rail Link that do benefit more people. But these projects are much larger and much more expensive, so would require a massive funding mechanism.
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Old 02-07-2019, 02:03 PM   #392
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Re: Red Line / Blue Line Connector

You're pretty much guaranteed to get heavy usage of Red-Blue if they do it. Some of the aforementioned projects, that's not the case.
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Old 02-08-2019, 07:18 AM   #393
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Re: Red Line / Blue Line Connector

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Originally Posted by tangent View Post
You realize bonds need to be paid back? Getting financing isn't the issue, it is paying it back without necessarily having to raise taxes/fares on the system/society as a whole. At least to the extent that the whole system isn't improved...

I think what you kinda are getting at though is the disconnect between funding transit and the existing and future needs of ridership.

If we want a growth model of transit improvements then there does need to be some way to make those improvements directly funded by the increased revenue. As it is now every transit proposal is evaluated as a cost first and then as an return on investment as an afterthought. Often with a wink and a nod that it is really just a construction jobs project and not really going to have a ROI. If we want sustainable transit then growing the system needs to grow the direct revenue with some pay back period that can be forecast reliably.

So back to bonds. If we can go to a toll bridge type of model, where extensions like this proposal can be paid for by an extra charge (time limited to just pay for the capital costs) on blue line riders choosing to get on or off the blue line at the new station, then perhaps that is a model for expansion of the system in general.

The downside is if you create a perverse incentive to neglect other infrastructure in favor of the infrastructure that has the tolls... like the way the Pike used to (still does?) cost way more per mile to maintain than the other non-toll roads.
Of course bonds need to be paid back. My point was with regard to the corporate and community involvement aspect...
Upthread, folks were criticizing corporations' direct involvement in building transit infrastructure outright (bordering on extortion of monies contingent on getting their development projects approved, etc)...and the downside of companies building transit stations thus absolving the MBTA from dealing with things they should be dealing with...

I simply wanted to call attention to the fact that if muni bonds are used for financing (and I get that there are myriad other financing options), then anyone who has an interest in advancing the project can support it by buying bonds, companies included. And it's clean. "Company A invested in the project by investing in its bonds." They will be paid back, with interest.

Bond financing can be attractive because it gives municipalities some ability to customize the arrangement. The annual budget expenditure, for instance, can be made more politically attractive.

Massport does this all the time.
http://www.massport.com/massport/fin...or-relations/#

And, as an example on a very similar scale as RL/BL:
Massport recently issued $207mil in bonds to build the CONRAC facility:
https://www.bizjournals.com/boston/r...bond-sale.html

I understand your point that this still doesn't solve "how" is the state/MBTA going to pay back the bonds. The answer lies in whether a sufficiently attractive annual expenditure arrangement can be conjured through the terms of the bond financing.
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Old 02-08-2019, 08:35 AM   #394
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Re: Red Line / Blue Line Connector

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Of course bonds need to be paid back. My point was with regard to the corporate and community involvement aspect...
Upthread, folks were criticizing corporations' direct involvement in building transit infrastructure outright (bordering on extortion of monies contingent on getting their development projects approved, etc)...and the downside of companies building transit stations thus absolving the MBTA from dealing with things they should be dealing with...

I simply wanted to call attention to the fact that if muni bonds are used for financing (and I get that there are myriad other financing options), then anyone who has an interest in advancing the project can support it by buying bonds, companies included. And it's clean. "Company A invested in the project by investing in its bonds." They will be paid back, with interest.

Bond financing can be attractive because it gives municipalities some ability to customize the arrangement. The annual budget expenditure, for instance, can be made more politically attractive.

Massport does this all the time.
http://www.massport.com/massport/fin...or-relations/#

And, as an example on a very similar scale as RL/BL:
Massport recently issued $207mil in bonds to build the CONRAC facility:
https://www.bizjournals.com/boston/r...bond-sale.html

I understand your point that this still doesn't solve "how" is the state/MBTA going to pay back the bonds. The answer lies in whether a sufficiently attractive annual expenditure arrangement can be conjured through the terms of the bond financing.

Right, you can raise the capital for the project with a bond issue. But how do you pay back the bonds? Funding bond repayments is the problem.

I was trying to answer that part of the question you weren't asking or answering, but that was implied by your idea... also the bonding part isn't really the hard part as long as you have a decent bond rating.

If you couple a bond with a dedicated funding source (contracts with local landowners, specific station fees as I suggested, or basically whatever funding you can cobble together and is specifically dedicated to repaying the bond) you could perhaps start to get to a model for growing capacity and funding system improvements of the MBTA that offsets any impact on the overall budget by increasing ridership and revenue.
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Old 02-08-2019, 10:09 AM   #395
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Re: Red Line / Blue Line Connector

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I was trying to answer that part of the question you weren't asking or answering, but that was implied by your idea... also the bonding part isn't really the hard part as long as you have a decent bond rating.
I understand, and that's fair. But my main point (question) was whether this could be a way to get interested parties' skin in the game without giving them private ownership of MBTA assets. I was simply pointing out that they could be involved as an investor-stakeholder, rather than a property owner.

Quote:
Originally Posted by tangent View Post
If you couple a bond with a dedicated funding source (contracts with local landowners, specific station fees as I suggested, or basically whatever funding you can cobble together and is specifically dedicated to repaying the bond) you could perhaps start to get to a model for growing capacity and funding system improvements of the MBTA that offsets any impact on the overall budget by increasing ridership and revenue.
^I love where you are going with this. It implies the type of strategic thinking that has been lacking thus far (I know, I am wishing for a lot).
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Old 02-12-2019, 09:06 AM   #396
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Re: Red Line / Blue Line Connector

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^I love where you are going with this. It implies the type of strategic thinking that has been lacking thus far (I know, I am wishing for a lot).
Thanks, really it is an old idea... the toll bridge. The concept that some infrastructure is so much more expensive and benefits particular users much more than other people that a dedicated toll would be assessed just for people crossing the bridge.

So instead of going around trying to convince the rest of the public that your new infrastructure will make their lives .05% better because you are not clogging up the roads they actually use. You just charge a toll and approvals become a lot easier if your demand model can demonstrate the bond will be payed off on time and the construction budget is rock solid.

The state does need to think about projects and if they will undermine the bond rating if the demand is not there to pay off the bonds or if they could undercut other bonded/tolled projects. So for instance for many years Harvard owned the only bridge across the Charles and the monopoly was very lucrative and there were disincentives to creating new bridges until demand became overwhelming.

Say there was a 30 year bond for $300 million and you divide that up by some ridership projections and you get a number like $4 or $5 per person as a surcharge... Can you get that construction cost down to $150 million and make that $2? Can you split the difference and spread some of that cost around to make it a $1 surcharge.

Then from the riders perspective, would this new connector be worth a $1 surcharge for entries and transfers? Or $1.50 surcharge? Something like that could mean the difference between getting this expansion done by 2040 or just getting it "planned for" with another study or something by 2040.

To my thinking a $1 surcharge would only begin to impact demand. $2 and you start to significantly impact demand.
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Old 02-12-2019, 10:57 AM   #397
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Re: Red Line / Blue Line Connector

Quote:
Originally Posted by tangent View Post
Thanks, really it is an old idea... the toll bridge. The concept that some infrastructure is so much more expensive and benefits particular users much more than other people that a dedicated toll would be assessed just for people crossing the bridge.

So instead of going around trying to convince the rest of the public that your new infrastructure will make their lives .05% better because you are not clogging up the roads they actually use. You just charge a toll and approvals become a lot easier if your demand model can demonstrate the bond will be payed off on time and the construction budget is rock solid.

The state does need to think about projects and if they will undermine the bond rating if the demand is not there to pay off the bonds or if they could undercut other bonded/tolled projects. So for instance for many years Harvard owned the only bridge across the Charles and the monopoly was very lucrative and there were disincentives to creating new bridges until demand became overwhelming.

Say there was a 30 year bond for $300 million and you divide that up by some ridership projections and you get a number like $4 or $5 per person as a surcharge... Can you get that construction cost down to $150 million and make that $2? Can you split the difference and spread some of that cost around to make it a $1 surcharge.

Then from the riders perspective, would this new connector be worth a $1 surcharge for entries and transfers? Or $1.50 surcharge? Something like that could mean the difference between getting this expansion done by 2040 or just getting it "planned for" with another study or something by 2040.

To my thinking a $1 surcharge would only begin to impact demand. $2 and you start to significantly impact demand.
The T did this with the Red Line Braintree extension. There was an extra token to get in and a token to exit up until the advent of Charlie Cards as I recall. The catch with this project is that it is a transfer station. The benefit come from people who are already entered into the T system. Do you charge Red Line only entry for the Blue? In AFC 2.0 you could probably assess a charge to those who start on Blue and exit at Red or vice versa
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