Commentary: The LAX people mover wasn’t ready for the 2026 World Cup. Will it even be ready for the 2028 Olympics?

Like any loyal citizens, we Angelenos like to think we’re No. 1 in important things. The conclusion is often debatable, but not in respect to one major municipal project.

The LAX people mover train, which is designed to carry 10,000 passengers a day throughout the airport’s terminals and out to a rental car center and the green line of the L.A. subway, can lay claim to being the most ridiculously mismanaged construction project in the United States.

Construction on the 2.25-mile line began in 2019, with a projected opening in 2023. The idea was for it to be ready to accommodate crowds coming to this year’s World Cup, followed by the 2027 Super Bowl at SoFi Stadium next February, and — the big event — the 2028 L.A. Olympics.

By all accounts, the project is 99.6% complete — drivers in the LAX loop today can spot the people mover cars doing test runs on the tracks. But those last 0.4 percentage points are a nightmare. The last technical steps before its opening are things like safety and security testing. And also settling a very childish dispute between the airport and the contractors.

Obviously, the project missed the World Cup. Whether it will be operating in time for the Super Bowl is open to question. There’s even reason to doubt it will be ready for the Olympics. Meanwhile, its cost has ballooned from the original estimate of $1.95 billion to a projected $3.3 billion, at least.

That will make it considerably more expensive than such major projects as the UCLA Ronald Reagan Hospital, completed in 2004 for an inflation-adjusted $2 billion, or the Getty Center, which cost an inflation-adjusted $2.6 billion.

Those figures come from a report issued in June 2025 by the Los Angeles County grand jury (and expertly parsed by filmmaker Nick Andert on YouTube). The jury alleged that the construction consortium — LINXS, for “LAX Integrated Express Solution” — in effect held the project hostage by threatening delays in order to squeeze more money from Los Angeles World Airports, the city enterprise that owns and operates LAX. LINXS has a 30-year contract to design, build finance and operate the people mover once it’s finished.

Recently, the relationship has gotten worse. On July 9, the contractors sued the city for allegedly refusing to settle a construction dispute as a plot to subject the contractors to severe financial penalties from their lenders. As it happens, that’s the same stratagem the grand jury detected — except the jury blamed the contractors for exploiting the city’s desire to complete the project on time to force the city to agree to pay millions of dollars for disputed change orders.

On July 21, as my colleague Colleen Shalby has reported, the bond rating firm Fitch downgraded the project bonds to “junk” status (the second time they’ve sunk to that level). Fitch cited “existing discord” between the city and the contractors that could lead to further delays in the project and a default on the bonds.

The relationship has continued to deteriorate. On July 24, the city accused LINXS of eavesdropping on a confidential conversation between a city consultant and a city lawyer, ostensibly regarding the city’s litigation strategy. The privileged conversation, according to the city, provided gist for the LINXS lawsuit.

The city has asked the judge presiding over the case to bar two Chicago lawyers working for LINXS who it says were linked to the breach from appearing in the case. One of those lawyers even wrote a letter to LAWA admitting that a LINXS employee overheard the conversation and adding, a bit ominously, that LINXS had avoided putting all the details of the conversation into its lawsuit to avoid “embarrassing” the LAWA attorney. The Los Angeles County judge hasn’t yet ruled.

To understand how the people mover mushroomed in price, let’s start at the beginning. According to the grand jury, LAWA placed the project in the hands of blue-ribbon partners. Its contract with the project builders was drafted by the law firm Nossaman, whose expertise covered such public-private public works. The construction consortium was headed by Fluor Corp., a leading construction firm.

The consortium was tasked with designing, building and financing the project, and operating and maintaining the people mover for 25 years after its completion. The arrangement was aimed at minimizing the number and cost of change orders, which are the bane of construction projects. Neither Nossaman nor Fluor responded to my questions about their roles in the project.

“The Jury found no fraud, no corruption and no mismanagement,” the grand jury reported, nor any “nefarious villain that the Jury can recommend going after.”

Yet over time, the project incurred an astonishing $880 million in change orders, swamping the original $1.95-billion cost estimate.

So what went wrong?

(LAWA told me by email that it “does not intend to comment on matters related to private financing arrangements, lender discussions, contractual milestones, or rating agency decisions involving the LINXS consortium.”)

The grand jury pointed to the appointment of a “project neutral,” a mediator-like figure whose job, as the jury found, was to listen to both sides in a dispute and calculate how it would be resolved if it came to litigation — an outcome LAWA was desperate to avoid due to the likelihood that any lawsuits could delay the project by years. I couldn’t reach the project neutral, John C. O’Rourke Jr., a Chicago lawyer who has made this practice his specialty.

LAWA soon noticed that O’Rourke almost invariably sided with the contractors. But there was no provision in the contract to replace him if either side was dissatisfied — a flaw the jury blamed on Nossaman.

The first major dispute concerned building codes. The construction contract said the project had to comply with the city’s bridge code, but that was wrong. The right code was the seismic code. City officials communicated that to LINXS, but not in writing, so LINKS went ahead and designed it to meet the wrong code. LAWA’s position is that LINXS, as the designer and builder, should have figured out the right code itself.

LINXS asked for $143 million to change the specifications. The project neutral ruled that a lawsuit would yield $97 million. LAWA concluded that though it might win in court, a lawsuit would take so long that, in the jury’s words, it would “endanger the completion of the project.” So it paid the contractors $97 million.

That set a pattern.

LAWA reached an informal agreement with the city that permit applications for the people mover would get priority, with approvals to come within 20 days. The contractors, according to the grand jury, exploited this agreement to the hilt. City officials told the jury that LINXS overwhelmed them with permit submissions — “two-foot tall piles of documents” that couldn’t conceivably be reviewed in the time allowed.

Consequently, construction delays mounted, all transmogrified into change orders. If all these claims had to go to court, progress at LAX would grind to a halt. Pressure to move the project along mounted, and in 2024 LAWA agreed to settle the contractors’ claims for $550 million. Another $233 million in smaller change orders brought the total to $880 million.

In its lawsuit, LINXS turned this scenario around, accusing LAWA of pressuring the contractors into making concessions by “intentionally delaying or refusing to grant additional time to complete construction.”

While the overall project deadline is Dec. 8, the contractors face an even tighter schedule: They have to complete construction by Oct. 8, or their lenders may demand payment of their loans in full.

The lawsuit turns on what laypeople might consider a minor quibble: who is responsible for the equipment connecting the city Department of Water and Power’s electrical grid to the people mover. LINXS says it’s the city, and that when DWP workers opened an electrical cabinet to make some repairs, it put the cabinet out of commission for six months. It demanded a 141-day extension on its completion deadline.

LAWA refused, stating that whatever problems are in the equipment are LINXS’ to fix. So now they’re in court.

Over at Fitch, the feeling is that the project will almost certainly be finished in time for the Olympics, mostly because the consequences of missing that deadline are too horrible to contemplate.

But resorting to litigation rather than negotiating a settlement to this trivial dispute could open a new source of pain.

“When you go into the legal system,” says Seth Lehman, the Fitch analyst on the LNXS bonds, “it has a timeline of its own.”

Will that timeline allow the project to carry passengers coming for the Olympics? Place your bets now.

Like any loyal citizens, we Angelenos like to think we’re No. 1 in important things. The conclusion is often debatable, but not in respect to one major municipal project.

The LAX people mover train, which is designed to carry 10,000 passengers a day throughout the airport’s terminals and out to a rental car center and the green line of the L.A. subway, can lay claim to being the most ridiculously mismanaged construction project in the United States.

Construction on the 2.25-mile line began in 2019, with a projected opening in 2023. The idea was for it to be ready to accommodate crowds coming to this year’s World Cup, followed by the 2027 Super Bowl at SoFi Stadium next February, and — the big event — the 2028 L.A. Olympics.

By all accounts, the project is 99.6% complete — drivers in the LAX loop today can spot the people mover cars doing test runs on the tracks. But those last 0.4 percentage points are a nightmare. The last technical steps before its opening are things like safety and security testing. And also settling a very childish dispute between the airport and the contractors.

Obviously, the project missed the World Cup. Whether it will be operating in time for the Super Bowl is open to question. There’s even reason to doubt it will be ready for the Olympics. Meanwhile, its cost has ballooned from the original estimate of $1.95 billion to a projected $3.3 billion, at least.

That will make it considerably more expensive than such major projects as the UCLA Ronald Reagan Hospital, completed in 2004 for an inflation-adjusted $2 billion, or the Getty Center, which cost an inflation-adjusted $2.6 billion.

Those figures come from a report issued in June 2025 by the Los Angeles County grand jury (and expertly parsed by filmmaker Nick Andert on YouTube). The jury alleged that the construction consortium — LINXS, for “LAX Integrated Express Solution” — in effect held the project hostage by threatening delays in order to squeeze more money from Los Angeles World Airports, the city enterprise that owns and operates LAX. LINXS has a 30-year contract to design, build finance and operate the people mover once it’s finished.

Recently, the relationship has gotten worse. On July 9, the contractors sued the city for allegedly refusing to settle a construction dispute as a plot to subject the contractors to severe financial penalties from their lenders. As it happens, that’s the same stratagem the grand jury detected — except the jury blamed the contractors for exploiting the city’s desire to complete the project on time to force the city to agree to pay millions of dollars for disputed change orders.

On July 21, as my colleague Colleen Shalby has reported, the bond rating firm Fitch downgraded the project bonds to “junk” status (the second time they’ve sunk to that level). Fitch cited “existing discord” between the city and the contractors that could lead to further delays in the project and a default on the bonds.

The relationship has continued to deteriorate. On July 24, the city accused LINXS of eavesdropping on a confidential conversation between a city consultant and a city lawyer, ostensibly regarding the city’s litigation strategy. The privileged conversation, according to the city, provided gist for the LINXS lawsuit.

The city has asked the judge presiding over the case to bar two Chicago lawyers working for LINXS who it says were linked to the breach from appearing in the case. One of those lawyers even wrote a letter to LAWA admitting that a LINXS employee overheard the conversation and adding, a bit ominously, that LINXS had avoided putting all the details of the conversation into its lawsuit to avoid “embarrassing” the LAWA attorney. The Los Angeles County judge hasn’t yet ruled.

To understand how the people mover mushroomed in price, let’s start at the beginning. According to the grand jury, LAWA placed the project in the hands of blue-ribbon partners. Its contract with the project builders was drafted by the law firm Nossaman, whose expertise covered such public-private public works. The construction consortium was headed by Fluor Corp., a leading construction firm.

The consortium was tasked with designing, building and financing the project, and operating and maintaining the people mover for 25 years after its completion. The arrangement was aimed at minimizing the number and cost of change orders, which are the bane of construction projects. Neither Nossaman nor Fluor responded to my questions about their roles in the project.

“The Jury found no fraud, no corruption and no mismanagement,” the grand jury reported, nor any “nefarious villain that the Jury can recommend going after.”

Yet over time, the project incurred an astonishing $880 million in change orders, swamping the original $1.95-billion cost estimate.

So what went wrong?

(LAWA told me by email that it “does not intend to comment on matters related to private financing arrangements, lender discussions, contractual milestones, or rating agency decisions involving the LINXS consortium.”)

The grand jury pointed to the appointment of a “project neutral,” a mediator-like figure whose job, as the jury found, was to listen to both sides in a dispute and calculate how it would be resolved if it came to litigation — an outcome LAWA was desperate to avoid due to the likelihood that any lawsuits could delay the project by years. I couldn’t reach the project neutral, John C. O’Rourke Jr., a Chicago lawyer who has made this practice his specialty.

LAWA soon noticed that O’Rourke almost invariably sided with the contractors. But there was no provision in the contract to replace him if either side was dissatisfied — a flaw the jury blamed on Nossaman.

The first major dispute concerned building codes. The construction contract said the project had to comply with the city’s bridge code, but that was wrong. The right code was the seismic code. City officials communicated that to LINXS, but not in writing, so LINKS went ahead and designed it to meet the wrong code. LAWA’s position is that LINXS, as the designer and builder, should have figured out the right code itself.

LINXS asked for $143 million to change the specifications. The project neutral ruled that a lawsuit would yield $97 million. LAWA concluded that though it might win in court, a lawsuit would take so long that, in the jury’s words, it would “endanger the completion of the project.” So it paid the contractors $97 million.

That set a pattern.

LAWA reached an informal agreement with the city that permit applications for the people mover would get priority, with approvals to come within 20 days. The contractors, according to the grand jury, exploited this agreement to the hilt. City officials told the jury that LINXS overwhelmed them with permit submissions — “two-foot tall piles of documents” that couldn’t conceivably be reviewed in the time allowed.

Consequently, construction delays mounted, all transmogrified into change orders. If all these claims had to go to court, progress at LAX would grind to a halt. Pressure to move the project along mounted, and in 2024 LAWA agreed to settle the contractors’ claims for $550 million. Another $233 million in smaller change orders brought the total to $880 million.

In its lawsuit, LINXS turned this scenario around, accusing LAWA of pressuring the contractors into making concessions by “intentionally delaying or refusing to grant additional time to complete construction.”

While the overall project deadline is Dec. 8, the contractors face an even tighter schedule: They have to complete construction by Oct. 8, or their lenders may demand payment of their loans in full.

The lawsuit turns on what laypeople might consider a minor quibble: who is responsible for the equipment connecting the city Department of Water and Power’s electrical grid to the people mover. LINXS says it’s the city, and that when DWP workers opened an electrical cabinet to make some repairs, it put the cabinet out of commission for six months. It demanded a 141-day extension on its completion deadline.

LAWA refused, stating that whatever problems are in the equipment are LINXS’ to fix. So now they’re in court.

Over at Fitch, the feeling is that the project will almost certainly be finished in time for the Olympics, mostly because the consequences of missing that deadline are too horrible to contemplate.

But resorting to litigation rather than negotiating a settlement to this trivial dispute could open a new source of pain.

“When you go into the legal system,” says Seth Lehman, the Fitch analyst on the LNXS bonds, “it has a timeline of its own.”

Will that timeline allow the project to carry passengers coming for the Olympics? Place your bets now.

Like any loyal citizens, we Angelenos like to think we’re No. 1 in important things. The conclusion is often debatable, but not in respect to one major municipal project.

The LAX people mover train, which is designed to carry 10,000 passengers a day throughout the airport’s terminals and out to a rental car center and the green line of the L.A. subway, can lay claim to being the most ridiculously mismanaged construction project in the United States.

Construction on the 2.25-mile line began in 2019, with a projected opening in 2023. The idea was for it to be ready to accommodate crowds coming to this year’s World Cup, followed by the 2027 Super Bowl at SoFi Stadium next February, and — the big event — the 2028 L.A. Olympics.

By all accounts, the project is 99.6% complete — drivers in the LAX loop today can spot the people mover cars doing test runs on the tracks. But those last 0.4 percentage points are a nightmare. The last technical steps before its opening are things like safety and security testing. And also settling a very childish dispute between the airport and the contractors.

Obviously, the project missed the World Cup. Whether it will be operating in time for the Super Bowl is open to question. There’s even reason to doubt it will be ready for the Olympics. Meanwhile, its cost has ballooned from the original estimate of $1.95 billion to a projected $3.3 billion, at least.

That will make it considerably more expensive than such major projects as the UCLA Ronald Reagan Hospital, completed in 2004 for an inflation-adjusted $2 billion, or the Getty Center, which cost an inflation-adjusted $2.6 billion.

Those figures come from a report issued in June 2025 by the Los Angeles County grand jury (and expertly parsed by filmmaker Nick Andert on YouTube). The jury alleged that the construction consortium — LINXS, for “LAX Integrated Express Solution” — in effect held the project hostage by threatening delays in order to squeeze more money from Los Angeles World Airports, the city enterprise that owns and operates LAX. LINXS has a 30-year contract to design, build finance and operate the people mover once it’s finished.

Recently, the relationship has gotten worse. On July 9, the contractors sued the city for allegedly refusing to settle a construction dispute as a plot to subject the contractors to severe financial penalties from their lenders. As it happens, that’s the same stratagem the grand jury detected — except the jury blamed the contractors for exploiting the city’s desire to complete the project on time to force the city to agree to pay millions of dollars for disputed change orders.

On July 21, as my colleague Colleen Shalby has reported, the bond rating firm Fitch downgraded the project bonds to “junk” status (the second time they’ve sunk to that level). Fitch cited “existing discord” between the city and the contractors that could lead to further delays in the project and a default on the bonds.

The relationship has continued to deteriorate. On July 24, the city accused LINXS of eavesdropping on a confidential conversation between a city consultant and a city lawyer, ostensibly regarding the city’s litigation strategy. The privileged conversation, according to the city, provided gist for the LINXS lawsuit.

The city has asked the judge presiding over the case to bar two Chicago lawyers working for LINXS who it says were linked to the breach from appearing in the case. One of those lawyers even wrote a letter to LAWA admitting that a LINXS employee overheard the conversation and adding, a bit ominously, that LINXS had avoided putting all the details of the conversation into its lawsuit to avoid “embarrassing” the LAWA attorney. The Los Angeles County judge hasn’t yet ruled.

To understand how the people mover mushroomed in price, let’s start at the beginning. According to the grand jury, LAWA placed the project in the hands of blue-ribbon partners. Its contract with the project builders was drafted by the law firm Nossaman, whose expertise covered such public-private public works. The construction consortium was headed by Fluor Corp., a leading construction firm.

The consortium was tasked with designing, building and financing the project, and operating and maintaining the people mover for 25 years after its completion. The arrangement was aimed at minimizing the number and cost of change orders, which are the bane of construction projects. Neither Nossaman nor Fluor responded to my questions about their roles in the project.

“The Jury found no fraud, no corruption and no mismanagement,” the grand jury reported, nor any “nefarious villain that the Jury can recommend going after.”

Yet over time, the project incurred an astonishing $880 million in change orders, swamping the original $1.95-billion cost estimate.

So what went wrong?

(LAWA told me by email that it “does not intend to comment on matters related to private financing arrangements, lender discussions, contractual milestones, or rating agency decisions involving the LINXS consortium.”)

The grand jury pointed to the appointment of a “project neutral,” a mediator-like figure whose job, as the jury found, was to listen to both sides in a dispute and calculate how it would be resolved if it came to litigation — an outcome LAWA was desperate to avoid due to the likelihood that any lawsuits could delay the project by years. I couldn’t reach the project neutral, John C. O’Rourke Jr., a Chicago lawyer who has made this practice his specialty.

LAWA soon noticed that O’Rourke almost invariably sided with the contractors. But there was no provision in the contract to replace him if either side was dissatisfied — a flaw the jury blamed on Nossaman.

The first major dispute concerned building codes. The construction contract said the project had to comply with the city’s bridge code, but that was wrong. The right code was the seismic code. City officials communicated that to LINXS, but not in writing, so LINKS went ahead and designed it to meet the wrong code. LAWA’s position is that LINXS, as the designer and builder, should have figured out the right code itself.

LINXS asked for $143 million to change the specifications. The project neutral ruled that a lawsuit would yield $97 million. LAWA concluded that though it might win in court, a lawsuit would take so long that, in the jury’s words, it would “endanger the completion of the project.” So it paid the contractors $97 million.

That set a pattern.

LAWA reached an informal agreement with the city that permit applications for the people mover would get priority, with approvals to come within 20 days. The contractors, according to the grand jury, exploited this agreement to the hilt. City officials told the jury that LINXS overwhelmed them with permit submissions — “two-foot tall piles of documents” that couldn’t conceivably be reviewed in the time allowed.

Consequently, construction delays mounted, all transmogrified into change orders. If all these claims had to go to court, progress at LAX would grind to a halt. Pressure to move the project along mounted, and in 2024 LAWA agreed to settle the contractors’ claims for $550 million. Another $233 million in smaller change orders brought the total to $880 million.

In its lawsuit, LINXS turned this scenario around, accusing LAWA of pressuring the contractors into making concessions by “intentionally delaying or refusing to grant additional time to complete construction.”

While the overall project deadline is Dec. 8, the contractors face an even tighter schedule: They have to complete construction by Oct. 8, or their lenders may demand payment of their loans in full.

The lawsuit turns on what laypeople might consider a minor quibble: who is responsible for the equipment connecting the city Department of Water and Power’s electrical grid to the people mover. LINXS says it’s the city, and that when DWP workers opened an electrical cabinet to make some repairs, it put the cabinet out of commission for six months. It demanded a 141-day extension on its completion deadline.

LAWA refused, stating that whatever problems are in the equipment are LINXS’ to fix. So now they’re in court.

Over at Fitch, the feeling is that the project will almost certainly be finished in time for the Olympics, mostly because the consequences of missing that deadline are too horrible to contemplate.

But resorting to litigation rather than negotiating a settlement to this trivial dispute could open a new source of pain.

“When you go into the legal system,” says Seth Lehman, the Fitch analyst on the LNXS bonds, “it has a timeline of its own.”

Will that timeline allow the project to carry passengers coming for the Olympics? Place your bets now.

Like any loyal citizens, we Angelenos like to think we’re No. 1 in important things. The conclusion is often debatable, but not in respect to one major municipal project.

The LAX people mover train, which is designed to carry 10,000 passengers a day throughout the airport’s terminals and out to a rental car center and the green line of the L.A. subway, can lay claim to being the most ridiculously mismanaged construction project in the United States.

Construction on the 2.25-mile line began in 2019, with a projected opening in 2023. The idea was for it to be ready to accommodate crowds coming to this year’s World Cup, followed by the 2027 Super Bowl at SoFi Stadium next February, and — the big event — the 2028 L.A. Olympics.

By all accounts, the project is 99.6% complete — drivers in the LAX loop today can spot the people mover cars doing test runs on the tracks. But those last 0.4 percentage points are a nightmare. The last technical steps before its opening are things like safety and security testing. And also settling a very childish dispute between the airport and the contractors.

Obviously, the project missed the World Cup. Whether it will be operating in time for the Super Bowl is open to question. There’s even reason to doubt it will be ready for the Olympics. Meanwhile, its cost has ballooned from the original estimate of $1.95 billion to a projected $3.3 billion, at least.

That will make it considerably more expensive than such major projects as the UCLA Ronald Reagan Hospital, completed in 2004 for an inflation-adjusted $2 billion, or the Getty Center, which cost an inflation-adjusted $2.6 billion.

Those figures come from a report issued in June 2025 by the Los Angeles County grand jury (and expertly parsed by filmmaker Nick Andert on YouTube). The jury alleged that the construction consortium — LINXS, for “LAX Integrated Express Solution” — in effect held the project hostage by threatening delays in order to squeeze more money from Los Angeles World Airports, the city enterprise that owns and operates LAX. LINXS has a 30-year contract to design, build finance and operate the people mover once it’s finished.

Recently, the relationship has gotten worse. On July 9, the contractors sued the city for allegedly refusing to settle a construction dispute as a plot to subject the contractors to severe financial penalties from their lenders. As it happens, that’s the same stratagem the grand jury detected — except the jury blamed the contractors for exploiting the city’s desire to complete the project on time to force the city to agree to pay millions of dollars for disputed change orders.

On July 21, as my colleague Colleen Shalby has reported, the bond rating firm Fitch downgraded the project bonds to “junk” status (the second time they’ve sunk to that level). Fitch cited “existing discord” between the city and the contractors that could lead to further delays in the project and a default on the bonds.

The relationship has continued to deteriorate. On July 24, the city accused LINXS of eavesdropping on a confidential conversation between a city consultant and a city lawyer, ostensibly regarding the city’s litigation strategy. The privileged conversation, according to the city, provided gist for the LINXS lawsuit.

The city has asked the judge presiding over the case to bar two Chicago lawyers working for LINXS who it says were linked to the breach from appearing in the case. One of those lawyers even wrote a letter to LAWA admitting that a LINXS employee overheard the conversation and adding, a bit ominously, that LINXS had avoided putting all the details of the conversation into its lawsuit to avoid “embarrassing” the LAWA attorney. The Los Angeles County judge hasn’t yet ruled.

To understand how the people mover mushroomed in price, let’s start at the beginning. According to the grand jury, LAWA placed the project in the hands of blue-ribbon partners. Its contract with the project builders was drafted by the law firm Nossaman, whose expertise covered such public-private public works. The construction consortium was headed by Fluor Corp., a leading construction firm.

The consortium was tasked with designing, building and financing the project, and operating and maintaining the people mover for 25 years after its completion. The arrangement was aimed at minimizing the number and cost of change orders, which are the bane of construction projects. Neither Nossaman nor Fluor responded to my questions about their roles in the project.

“The Jury found no fraud, no corruption and no mismanagement,” the grand jury reported, nor any “nefarious villain that the Jury can recommend going after.”

Yet over time, the project incurred an astonishing $880 million in change orders, swamping the original $1.95-billion cost estimate.

So what went wrong?

(LAWA told me by email that it “does not intend to comment on matters related to private financing arrangements, lender discussions, contractual milestones, or rating agency decisions involving the LINXS consortium.”)

The grand jury pointed to the appointment of a “project neutral,” a mediator-like figure whose job, as the jury found, was to listen to both sides in a dispute and calculate how it would be resolved if it came to litigation — an outcome LAWA was desperate to avoid due to the likelihood that any lawsuits could delay the project by years. I couldn’t reach the project neutral, John C. O’Rourke Jr., a Chicago lawyer who has made this practice his specialty.

LAWA soon noticed that O’Rourke almost invariably sided with the contractors. But there was no provision in the contract to replace him if either side was dissatisfied — a flaw the jury blamed on Nossaman.

The first major dispute concerned building codes. The construction contract said the project had to comply with the city’s bridge code, but that was wrong. The right code was the seismic code. City officials communicated that to LINXS, but not in writing, so LINKS went ahead and designed it to meet the wrong code. LAWA’s position is that LINXS, as the designer and builder, should have figured out the right code itself.

LINXS asked for $143 million to change the specifications. The project neutral ruled that a lawsuit would yield $97 million. LAWA concluded that though it might win in court, a lawsuit would take so long that, in the jury’s words, it would “endanger the completion of the project.” So it paid the contractors $97 million.

That set a pattern.

LAWA reached an informal agreement with the city that permit applications for the people mover would get priority, with approvals to come within 20 days. The contractors, according to the grand jury, exploited this agreement to the hilt. City officials told the jury that LINXS overwhelmed them with permit submissions — “two-foot tall piles of documents” that couldn’t conceivably be reviewed in the time allowed.

Consequently, construction delays mounted, all transmogrified into change orders. If all these claims had to go to court, progress at LAX would grind to a halt. Pressure to move the project along mounted, and in 2024 LAWA agreed to settle the contractors’ claims for $550 million. Another $233 million in smaller change orders brought the total to $880 million.

In its lawsuit, LINXS turned this scenario around, accusing LAWA of pressuring the contractors into making concessions by “intentionally delaying or refusing to grant additional time to complete construction.”

While the overall project deadline is Dec. 8, the contractors face an even tighter schedule: They have to complete construction by Oct. 8, or their lenders may demand payment of their loans in full.

The lawsuit turns on what laypeople might consider a minor quibble: who is responsible for the equipment connecting the city Department of Water and Power’s electrical grid to the people mover. LINXS says it’s the city, and that when DWP workers opened an electrical cabinet to make some repairs, it put the cabinet out of commission for six months. It demanded a 141-day extension on its completion deadline.

LAWA refused, stating that whatever problems are in the equipment are LINXS’ to fix. So now they’re in court.

Over at Fitch, the feeling is that the project will almost certainly be finished in time for the Olympics, mostly because the consequences of missing that deadline are too horrible to contemplate.

But resorting to litigation rather than negotiating a settlement to this trivial dispute could open a new source of pain.

“When you go into the legal system,” says Seth Lehman, the Fitch analyst on the LNXS bonds, “it has a timeline of its own.”

Will that timeline allow the project to carry passengers coming for the Olympics? Place your bets now.

Like any loyal citizens, we Angelenos like to think we’re No. 1 in important things. The conclusion is often debatable, but not in respect to one major municipal project.

The LAX people mover train, which is designed to carry 10,000 passengers a day throughout the airport’s terminals and out to a rental car center and the green line of the L.A. subway, can lay claim to being the most ridiculously mismanaged construction project in the United States.

Construction on the 2.25-mile line began in 2019, with a projected opening in 2023. The idea was for it to be ready to accommodate crowds coming to this year’s World Cup, followed by the 2027 Super Bowl at SoFi Stadium next February, and — the big event — the 2028 L.A. Olympics.

By all accounts, the project is 99.6% complete — drivers in the LAX loop today can spot the people mover cars doing test runs on the tracks. But those last 0.4 percentage points are a nightmare. The last technical steps before its opening are things like safety and security testing. And also settling a very childish dispute between the airport and the contractors.

Obviously, the project missed the World Cup. Whether it will be operating in time for the Super Bowl is open to question. There’s even reason to doubt it will be ready for the Olympics. Meanwhile, its cost has ballooned from the original estimate of $1.95 billion to a projected $3.3 billion, at least.

That will make it considerably more expensive than such major projects as the UCLA Ronald Reagan Hospital, completed in 2004 for an inflation-adjusted $2 billion, or the Getty Center, which cost an inflation-adjusted $2.6 billion.

Those figures come from a report issued in June 2025 by the Los Angeles County grand jury (and expertly parsed by filmmaker Nick Andert on YouTube). The jury alleged that the construction consortium — LINXS, for “LAX Integrated Express Solution” — in effect held the project hostage by threatening delays in order to squeeze more money from Los Angeles World Airports, the city enterprise that owns and operates LAX. LINXS has a 30-year contract to design, build finance and operate the people mover once it’s finished.

Recently, the relationship has gotten worse. On July 9, the contractors sued the city for allegedly refusing to settle a construction dispute as a plot to subject the contractors to severe financial penalties from their lenders. As it happens, that’s the same stratagem the grand jury detected — except the jury blamed the contractors for exploiting the city’s desire to complete the project on time to force the city to agree to pay millions of dollars for disputed change orders.

On July 21, as my colleague Colleen Shalby has reported, the bond rating firm Fitch downgraded the project bonds to “junk” status (the second time they’ve sunk to that level). Fitch cited “existing discord” between the city and the contractors that could lead to further delays in the project and a default on the bonds.

The relationship has continued to deteriorate. On July 24, the city accused LINXS of eavesdropping on a confidential conversation between a city consultant and a city lawyer, ostensibly regarding the city’s litigation strategy. The privileged conversation, according to the city, provided gist for the LINXS lawsuit.

The city has asked the judge presiding over the case to bar two Chicago lawyers working for LINXS who it says were linked to the breach from appearing in the case. One of those lawyers even wrote a letter to LAWA admitting that a LINXS employee overheard the conversation and adding, a bit ominously, that LINXS had avoided putting all the details of the conversation into its lawsuit to avoid “embarrassing” the LAWA attorney. The Los Angeles County judge hasn’t yet ruled.

To understand how the people mover mushroomed in price, let’s start at the beginning. According to the grand jury, LAWA placed the project in the hands of blue-ribbon partners. Its contract with the project builders was drafted by the law firm Nossaman, whose expertise covered such public-private public works. The construction consortium was headed by Fluor Corp., a leading construction firm.

The consortium was tasked with designing, building and financing the project, and operating and maintaining the people mover for 25 years after its completion. The arrangement was aimed at minimizing the number and cost of change orders, which are the bane of construction projects. Neither Nossaman nor Fluor responded to my questions about their roles in the project.

“The Jury found no fraud, no corruption and no mismanagement,” the grand jury reported, nor any “nefarious villain that the Jury can recommend going after.”

Yet over time, the project incurred an astonishing $880 million in change orders, swamping the original $1.95-billion cost estimate.

So what went wrong?

(LAWA told me by email that it “does not intend to comment on matters related to private financing arrangements, lender discussions, contractual milestones, or rating agency decisions involving the LINXS consortium.”)

The grand jury pointed to the appointment of a “project neutral,” a mediator-like figure whose job, as the jury found, was to listen to both sides in a dispute and calculate how it would be resolved if it came to litigation — an outcome LAWA was desperate to avoid due to the likelihood that any lawsuits could delay the project by years. I couldn’t reach the project neutral, John C. O’Rourke Jr., a Chicago lawyer who has made this practice his specialty.

LAWA soon noticed that O’Rourke almost invariably sided with the contractors. But there was no provision in the contract to replace him if either side was dissatisfied — a flaw the jury blamed on Nossaman.

The first major dispute concerned building codes. The construction contract said the project had to comply with the city’s bridge code, but that was wrong. The right code was the seismic code. City officials communicated that to LINXS, but not in writing, so LINKS went ahead and designed it to meet the wrong code. LAWA’s position is that LINXS, as the designer and builder, should have figured out the right code itself.

LINXS asked for $143 million to change the specifications. The project neutral ruled that a lawsuit would yield $97 million. LAWA concluded that though it might win in court, a lawsuit would take so long that, in the jury’s words, it would “endanger the completion of the project.” So it paid the contractors $97 million.

That set a pattern.

LAWA reached an informal agreement with the city that permit applications for the people mover would get priority, with approvals to come within 20 days. The contractors, according to the grand jury, exploited this agreement to the hilt. City officials told the jury that LINXS overwhelmed them with permit submissions — “two-foot tall piles of documents” that couldn’t conceivably be reviewed in the time allowed.

Consequently, construction delays mounted, all transmogrified into change orders. If all these claims had to go to court, progress at LAX would grind to a halt. Pressure to move the project along mounted, and in 2024 LAWA agreed to settle the contractors’ claims for $550 million. Another $233 million in smaller change orders brought the total to $880 million.

In its lawsuit, LINXS turned this scenario around, accusing LAWA of pressuring the contractors into making concessions by “intentionally delaying or refusing to grant additional time to complete construction.”

While the overall project deadline is Dec. 8, the contractors face an even tighter schedule: They have to complete construction by Oct. 8, or their lenders may demand payment of their loans in full.

The lawsuit turns on what laypeople might consider a minor quibble: who is responsible for the equipment connecting the city Department of Water and Power’s electrical grid to the people mover. LINXS says it’s the city, and that when DWP workers opened an electrical cabinet to make some repairs, it put the cabinet out of commission for six months. It demanded a 141-day extension on its completion deadline.

LAWA refused, stating that whatever problems are in the equipment are LINXS’ to fix. So now they’re in court.

Over at Fitch, the feeling is that the project will almost certainly be finished in time for the Olympics, mostly because the consequences of missing that deadline are too horrible to contemplate.

But resorting to litigation rather than negotiating a settlement to this trivial dispute could open a new source of pain.

“When you go into the legal system,” says Seth Lehman, the Fitch analyst on the LNXS bonds, “it has a timeline of its own.”

Will that timeline allow the project to carry passengers coming for the Olympics? Place your bets now.

Like any loyal citizens, we Angelenos like to think we’re No. 1 in important things. The conclusion is often debatable, but not in respect to one major municipal project.

The LAX people mover train, which is designed to carry 10,000 passengers a day throughout the airport’s terminals and out to a rental car center and the green line of the L.A. subway, can lay claim to being the most ridiculously mismanaged construction project in the United States.

Construction on the 2.25-mile line began in 2019, with a projected opening in 2023. The idea was for it to be ready to accommodate crowds coming to this year’s World Cup, followed by the 2027 Super Bowl at SoFi Stadium next February, and — the big event — the 2028 L.A. Olympics.

By all accounts, the project is 99.6% complete — drivers in the LAX loop today can spot the people mover cars doing test runs on the tracks. But those last 0.4 percentage points are a nightmare. The last technical steps before its opening are things like safety and security testing. And also settling a very childish dispute between the airport and the contractors.

Obviously, the project missed the World Cup. Whether it will be operating in time for the Super Bowl is open to question. There’s even reason to doubt it will be ready for the Olympics. Meanwhile, its cost has ballooned from the original estimate of $1.95 billion to a projected $3.3 billion, at least.

That will make it considerably more expensive than such major projects as the UCLA Ronald Reagan Hospital, completed in 2004 for an inflation-adjusted $2 billion, or the Getty Center, which cost an inflation-adjusted $2.6 billion.

Those figures come from a report issued in June 2025 by the Los Angeles County grand jury (and expertly parsed by filmmaker Nick Andert on YouTube). The jury alleged that the construction consortium — LINXS, for “LAX Integrated Express Solution” — in effect held the project hostage by threatening delays in order to squeeze more money from Los Angeles World Airports, the city enterprise that owns and operates LAX. LINXS has a 30-year contract to design, build finance and operate the people mover once it’s finished.

Recently, the relationship has gotten worse. On July 9, the contractors sued the city for allegedly refusing to settle a construction dispute as a plot to subject the contractors to severe financial penalties from their lenders. As it happens, that’s the same stratagem the grand jury detected — except the jury blamed the contractors for exploiting the city’s desire to complete the project on time to force the city to agree to pay millions of dollars for disputed change orders.

On July 21, as my colleague Colleen Shalby has reported, the bond rating firm Fitch downgraded the project bonds to “junk” status (the second time they’ve sunk to that level). Fitch cited “existing discord” between the city and the contractors that could lead to further delays in the project and a default on the bonds.

The relationship has continued to deteriorate. On July 24, the city accused LINXS of eavesdropping on a confidential conversation between a city consultant and a city lawyer, ostensibly regarding the city’s litigation strategy. The privileged conversation, according to the city, provided gist for the LINXS lawsuit.

The city has asked the judge presiding over the case to bar two Chicago lawyers working for LINXS who it says were linked to the breach from appearing in the case. One of those lawyers even wrote a letter to LAWA admitting that a LINXS employee overheard the conversation and adding, a bit ominously, that LINXS had avoided putting all the details of the conversation into its lawsuit to avoid “embarrassing” the LAWA attorney. The Los Angeles County judge hasn’t yet ruled.

To understand how the people mover mushroomed in price, let’s start at the beginning. According to the grand jury, LAWA placed the project in the hands of blue-ribbon partners. Its contract with the project builders was drafted by the law firm Nossaman, whose expertise covered such public-private public works. The construction consortium was headed by Fluor Corp., a leading construction firm.

The consortium was tasked with designing, building and financing the project, and operating and maintaining the people mover for 25 years after its completion. The arrangement was aimed at minimizing the number and cost of change orders, which are the bane of construction projects. Neither Nossaman nor Fluor responded to my questions about their roles in the project.

“The Jury found no fraud, no corruption and no mismanagement,” the grand jury reported, nor any “nefarious villain that the Jury can recommend going after.”

Yet over time, the project incurred an astonishing $880 million in change orders, swamping the original $1.95-billion cost estimate.

So what went wrong?

(LAWA told me by email that it “does not intend to comment on matters related to private financing arrangements, lender discussions, contractual milestones, or rating agency decisions involving the LINXS consortium.”)

The grand jury pointed to the appointment of a “project neutral,” a mediator-like figure whose job, as the jury found, was to listen to both sides in a dispute and calculate how it would be resolved if it came to litigation — an outcome LAWA was desperate to avoid due to the likelihood that any lawsuits could delay the project by years. I couldn’t reach the project neutral, John C. O’Rourke Jr., a Chicago lawyer who has made this practice his specialty.

LAWA soon noticed that O’Rourke almost invariably sided with the contractors. But there was no provision in the contract to replace him if either side was dissatisfied — a flaw the jury blamed on Nossaman.

The first major dispute concerned building codes. The construction contract said the project had to comply with the city’s bridge code, but that was wrong. The right code was the seismic code. City officials communicated that to LINXS, but not in writing, so LINKS went ahead and designed it to meet the wrong code. LAWA’s position is that LINXS, as the designer and builder, should have figured out the right code itself.

LINXS asked for $143 million to change the specifications. The project neutral ruled that a lawsuit would yield $97 million. LAWA concluded that though it might win in court, a lawsuit would take so long that, in the jury’s words, it would “endanger the completion of the project.” So it paid the contractors $97 million.

That set a pattern.

LAWA reached an informal agreement with the city that permit applications for the people mover would get priority, with approvals to come within 20 days. The contractors, according to the grand jury, exploited this agreement to the hilt. City officials told the jury that LINXS overwhelmed them with permit submissions — “two-foot tall piles of documents” that couldn’t conceivably be reviewed in the time allowed.

Consequently, construction delays mounted, all transmogrified into change orders. If all these claims had to go to court, progress at LAX would grind to a halt. Pressure to move the project along mounted, and in 2024 LAWA agreed to settle the contractors’ claims for $550 million. Another $233 million in smaller change orders brought the total to $880 million.

In its lawsuit, LINXS turned this scenario around, accusing LAWA of pressuring the contractors into making concessions by “intentionally delaying or refusing to grant additional time to complete construction.”

While the overall project deadline is Dec. 8, the contractors face an even tighter schedule: They have to complete construction by Oct. 8, or their lenders may demand payment of their loans in full.

The lawsuit turns on what laypeople might consider a minor quibble: who is responsible for the equipment connecting the city Department of Water and Power’s electrical grid to the people mover. LINXS says it’s the city, and that when DWP workers opened an electrical cabinet to make some repairs, it put the cabinet out of commission for six months. It demanded a 141-day extension on its completion deadline.

LAWA refused, stating that whatever problems are in the equipment are LINXS’ to fix. So now they’re in court.

Over at Fitch, the feeling is that the project will almost certainly be finished in time for the Olympics, mostly because the consequences of missing that deadline are too horrible to contemplate.

But resorting to litigation rather than negotiating a settlement to this trivial dispute could open a new source of pain.

“When you go into the legal system,” says Seth Lehman, the Fitch analyst on the LNXS bonds, “it has a timeline of its own.”

Will that timeline allow the project to carry passengers coming for the Olympics? Place your bets now.

Like any loyal citizens, we Angelenos like to think we’re No. 1 in important things. The conclusion is often debatable, but not in respect to one major municipal project.

The LAX people mover train, which is designed to carry 10,000 passengers a day throughout the airport’s terminals and out to a rental car center and the green line of the L.A. subway, can lay claim to being the most ridiculously mismanaged construction project in the United States.

Construction on the 2.25-mile line began in 2019, with a projected opening in 2023. The idea was for it to be ready to accommodate crowds coming to this year’s World Cup, followed by the 2027 Super Bowl at SoFi Stadium next February, and — the big event — the 2028 L.A. Olympics.

By all accounts, the project is 99.6% complete — drivers in the LAX loop today can spot the people mover cars doing test runs on the tracks. But those last 0.4 percentage points are a nightmare. The last technical steps before its opening are things like safety and security testing. And also settling a very childish dispute between the airport and the contractors.

Obviously, the project missed the World Cup. Whether it will be operating in time for the Super Bowl is open to question. There’s even reason to doubt it will be ready for the Olympics. Meanwhile, its cost has ballooned from the original estimate of $1.95 billion to a projected $3.3 billion, at least.

That will make it considerably more expensive than such major projects as the UCLA Ronald Reagan Hospital, completed in 2004 for an inflation-adjusted $2 billion, or the Getty Center, which cost an inflation-adjusted $2.6 billion.

Those figures come from a report issued in June 2025 by the Los Angeles County grand jury (and expertly parsed by filmmaker Nick Andert on YouTube). The jury alleged that the construction consortium — LINXS, for “LAX Integrated Express Solution” — in effect held the project hostage by threatening delays in order to squeeze more money from Los Angeles World Airports, the city enterprise that owns and operates LAX. LINXS has a 30-year contract to design, build finance and operate the people mover once it’s finished.

Recently, the relationship has gotten worse. On July 9, the contractors sued the city for allegedly refusing to settle a construction dispute as a plot to subject the contractors to severe financial penalties from their lenders. As it happens, that’s the same stratagem the grand jury detected — except the jury blamed the contractors for exploiting the city’s desire to complete the project on time to force the city to agree to pay millions of dollars for disputed change orders.

On July 21, as my colleague Colleen Shalby has reported, the bond rating firm Fitch downgraded the project bonds to “junk” status (the second time they’ve sunk to that level). Fitch cited “existing discord” between the city and the contractors that could lead to further delays in the project and a default on the bonds.

The relationship has continued to deteriorate. On July 24, the city accused LINXS of eavesdropping on a confidential conversation between a city consultant and a city lawyer, ostensibly regarding the city’s litigation strategy. The privileged conversation, according to the city, provided gist for the LINXS lawsuit.

The city has asked the judge presiding over the case to bar two Chicago lawyers working for LINXS who it says were linked to the breach from appearing in the case. One of those lawyers even wrote a letter to LAWA admitting that a LINXS employee overheard the conversation and adding, a bit ominously, that LINXS had avoided putting all the details of the conversation into its lawsuit to avoid “embarrassing” the LAWA attorney. The Los Angeles County judge hasn’t yet ruled.

To understand how the people mover mushroomed in price, let’s start at the beginning. According to the grand jury, LAWA placed the project in the hands of blue-ribbon partners. Its contract with the project builders was drafted by the law firm Nossaman, whose expertise covered such public-private public works. The construction consortium was headed by Fluor Corp., a leading construction firm.

The consortium was tasked with designing, building and financing the project, and operating and maintaining the people mover for 25 years after its completion. The arrangement was aimed at minimizing the number and cost of change orders, which are the bane of construction projects. Neither Nossaman nor Fluor responded to my questions about their roles in the project.

“The Jury found no fraud, no corruption and no mismanagement,” the grand jury reported, nor any “nefarious villain that the Jury can recommend going after.”

Yet over time, the project incurred an astonishing $880 million in change orders, swamping the original $1.95-billion cost estimate.

So what went wrong?

(LAWA told me by email that it “does not intend to comment on matters related to private financing arrangements, lender discussions, contractual milestones, or rating agency decisions involving the LINXS consortium.”)

The grand jury pointed to the appointment of a “project neutral,” a mediator-like figure whose job, as the jury found, was to listen to both sides in a dispute and calculate how it would be resolved if it came to litigation — an outcome LAWA was desperate to avoid due to the likelihood that any lawsuits could delay the project by years. I couldn’t reach the project neutral, John C. O’Rourke Jr., a Chicago lawyer who has made this practice his specialty.

LAWA soon noticed that O’Rourke almost invariably sided with the contractors. But there was no provision in the contract to replace him if either side was dissatisfied — a flaw the jury blamed on Nossaman.

The first major dispute concerned building codes. The construction contract said the project had to comply with the city’s bridge code, but that was wrong. The right code was the seismic code. City officials communicated that to LINXS, but not in writing, so LINKS went ahead and designed it to meet the wrong code. LAWA’s position is that LINXS, as the designer and builder, should have figured out the right code itself.

LINXS asked for $143 million to change the specifications. The project neutral ruled that a lawsuit would yield $97 million. LAWA concluded that though it might win in court, a lawsuit would take so long that, in the jury’s words, it would “endanger the completion of the project.” So it paid the contractors $97 million.

That set a pattern.

LAWA reached an informal agreement with the city that permit applications for the people mover would get priority, with approvals to come within 20 days. The contractors, according to the grand jury, exploited this agreement to the hilt. City officials told the jury that LINXS overwhelmed them with permit submissions — “two-foot tall piles of documents” that couldn’t conceivably be reviewed in the time allowed.

Consequently, construction delays mounted, all transmogrified into change orders. If all these claims had to go to court, progress at LAX would grind to a halt. Pressure to move the project along mounted, and in 2024 LAWA agreed to settle the contractors’ claims for $550 million. Another $233 million in smaller change orders brought the total to $880 million.

In its lawsuit, LINXS turned this scenario around, accusing LAWA of pressuring the contractors into making concessions by “intentionally delaying or refusing to grant additional time to complete construction.”

While the overall project deadline is Dec. 8, the contractors face an even tighter schedule: They have to complete construction by Oct. 8, or their lenders may demand payment of their loans in full.

The lawsuit turns on what laypeople might consider a minor quibble: who is responsible for the equipment connecting the city Department of Water and Power’s electrical grid to the people mover. LINXS says it’s the city, and that when DWP workers opened an electrical cabinet to make some repairs, it put the cabinet out of commission for six months. It demanded a 141-day extension on its completion deadline.

LAWA refused, stating that whatever problems are in the equipment are LINXS’ to fix. So now they’re in court.

Over at Fitch, the feeling is that the project will almost certainly be finished in time for the Olympics, mostly because the consequences of missing that deadline are too horrible to contemplate.

But resorting to litigation rather than negotiating a settlement to this trivial dispute could open a new source of pain.

“When you go into the legal system,” says Seth Lehman, the Fitch analyst on the LNXS bonds, “it has a timeline of its own.”

Will that timeline allow the project to carry passengers coming for the Olympics? Place your bets now.

Like any loyal citizens, we Angelenos like to think we’re No. 1 in important things. The conclusion is often debatable, but not in respect to one major municipal project.

The LAX people mover train, which is designed to carry 10,000 passengers a day throughout the airport’s terminals and out to a rental car center and the green line of the L.A. subway, can lay claim to being the most ridiculously mismanaged construction project in the United States.

Construction on the 2.25-mile line began in 2019, with a projected opening in 2023. The idea was for it to be ready to accommodate crowds coming to this year’s World Cup, followed by the 2027 Super Bowl at SoFi Stadium next February, and — the big event — the 2028 L.A. Olympics.

By all accounts, the project is 99.6% complete — drivers in the LAX loop today can spot the people mover cars doing test runs on the tracks. But those last 0.4 percentage points are a nightmare. The last technical steps before its opening are things like safety and security testing. And also settling a very childish dispute between the airport and the contractors.

Obviously, the project missed the World Cup. Whether it will be operating in time for the Super Bowl is open to question. There’s even reason to doubt it will be ready for the Olympics. Meanwhile, its cost has ballooned from the original estimate of $1.95 billion to a projected $3.3 billion, at least.

That will make it considerably more expensive than such major projects as the UCLA Ronald Reagan Hospital, completed in 2004 for an inflation-adjusted $2 billion, or the Getty Center, which cost an inflation-adjusted $2.6 billion.

Those figures come from a report issued in June 2025 by the Los Angeles County grand jury (and expertly parsed by filmmaker Nick Andert on YouTube). The jury alleged that the construction consortium — LINXS, for “LAX Integrated Express Solution” — in effect held the project hostage by threatening delays in order to squeeze more money from Los Angeles World Airports, the city enterprise that owns and operates LAX. LINXS has a 30-year contract to design, build finance and operate the people mover once it’s finished.

Recently, the relationship has gotten worse. On July 9, the contractors sued the city for allegedly refusing to settle a construction dispute as a plot to subject the contractors to severe financial penalties from their lenders. As it happens, that’s the same stratagem the grand jury detected — except the jury blamed the contractors for exploiting the city’s desire to complete the project on time to force the city to agree to pay millions of dollars for disputed change orders.

On July 21, as my colleague Colleen Shalby has reported, the bond rating firm Fitch downgraded the project bonds to “junk” status (the second time they’ve sunk to that level). Fitch cited “existing discord” between the city and the contractors that could lead to further delays in the project and a default on the bonds.

The relationship has continued to deteriorate. On July 24, the city accused LINXS of eavesdropping on a confidential conversation between a city consultant and a city lawyer, ostensibly regarding the city’s litigation strategy. The privileged conversation, according to the city, provided gist for the LINXS lawsuit.

The city has asked the judge presiding over the case to bar two Chicago lawyers working for LINXS who it says were linked to the breach from appearing in the case. One of those lawyers even wrote a letter to LAWA admitting that a LINXS employee overheard the conversation and adding, a bit ominously, that LINXS had avoided putting all the details of the conversation into its lawsuit to avoid “embarrassing” the LAWA attorney. The Los Angeles County judge hasn’t yet ruled.

To understand how the people mover mushroomed in price, let’s start at the beginning. According to the grand jury, LAWA placed the project in the hands of blue-ribbon partners. Its contract with the project builders was drafted by the law firm Nossaman, whose expertise covered such public-private public works. The construction consortium was headed by Fluor Corp., a leading construction firm.

The consortium was tasked with designing, building and financing the project, and operating and maintaining the people mover for 25 years after its completion. The arrangement was aimed at minimizing the number and cost of change orders, which are the bane of construction projects. Neither Nossaman nor Fluor responded to my questions about their roles in the project.

“The Jury found no fraud, no corruption and no mismanagement,” the grand jury reported, nor any “nefarious villain that the Jury can recommend going after.”

Yet over time, the project incurred an astonishing $880 million in change orders, swamping the original $1.95-billion cost estimate.

So what went wrong?

(LAWA told me by email that it “does not intend to comment on matters related to private financing arrangements, lender discussions, contractual milestones, or rating agency decisions involving the LINXS consortium.”)

The grand jury pointed to the appointment of a “project neutral,” a mediator-like figure whose job, as the jury found, was to listen to both sides in a dispute and calculate how it would be resolved if it came to litigation — an outcome LAWA was desperate to avoid due to the likelihood that any lawsuits could delay the project by years. I couldn’t reach the project neutral, John C. O’Rourke Jr., a Chicago lawyer who has made this practice his specialty.

LAWA soon noticed that O’Rourke almost invariably sided with the contractors. But there was no provision in the contract to replace him if either side was dissatisfied — a flaw the jury blamed on Nossaman.

The first major dispute concerned building codes. The construction contract said the project had to comply with the city’s bridge code, but that was wrong. The right code was the seismic code. City officials communicated that to LINXS, but not in writing, so LINKS went ahead and designed it to meet the wrong code. LAWA’s position is that LINXS, as the designer and builder, should have figured out the right code itself.

LINXS asked for $143 million to change the specifications. The project neutral ruled that a lawsuit would yield $97 million. LAWA concluded that though it might win in court, a lawsuit would take so long that, in the jury’s words, it would “endanger the completion of the project.” So it paid the contractors $97 million.

That set a pattern.

LAWA reached an informal agreement with the city that permit applications for the people mover would get priority, with approvals to come within 20 days. The contractors, according to the grand jury, exploited this agreement to the hilt. City officials told the jury that LINXS overwhelmed them with permit submissions — “two-foot tall piles of documents” that couldn’t conceivably be reviewed in the time allowed.

Consequently, construction delays mounted, all transmogrified into change orders. If all these claims had to go to court, progress at LAX would grind to a halt. Pressure to move the project along mounted, and in 2024 LAWA agreed to settle the contractors’ claims for $550 million. Another $233 million in smaller change orders brought the total to $880 million.

In its lawsuit, LINXS turned this scenario around, accusing LAWA of pressuring the contractors into making concessions by “intentionally delaying or refusing to grant additional time to complete construction.”

While the overall project deadline is Dec. 8, the contractors face an even tighter schedule: They have to complete construction by Oct. 8, or their lenders may demand payment of their loans in full.

The lawsuit turns on what laypeople might consider a minor quibble: who is responsible for the equipment connecting the city Department of Water and Power’s electrical grid to the people mover. LINXS says it’s the city, and that when DWP workers opened an electrical cabinet to make some repairs, it put the cabinet out of commission for six months. It demanded a 141-day extension on its completion deadline.

LAWA refused, stating that whatever problems are in the equipment are LINXS’ to fix. So now they’re in court.

Over at Fitch, the feeling is that the project will almost certainly be finished in time for the Olympics, mostly because the consequences of missing that deadline are too horrible to contemplate.

But resorting to litigation rather than negotiating a settlement to this trivial dispute could open a new source of pain.

“When you go into the legal system,” says Seth Lehman, the Fitch analyst on the LNXS bonds, “it has a timeline of its own.”

Will that timeline allow the project to carry passengers coming for the Olympics? Place your bets now.

Like any loyal citizens, we Angelenos like to think we’re No. 1 in important things. The conclusion is often debatable, but not in respect to one major municipal project.

The LAX people mover train, which is designed to carry 10,000 passengers a day throughout the airport’s terminals and out to a rental car center and the green line of the L.A. subway, can lay claim to being the most ridiculously mismanaged construction project in the United States.

Construction on the 2.25-mile line began in 2019, with a projected opening in 2023. The idea was for it to be ready to accommodate crowds coming to this year’s World Cup, followed by the 2027 Super Bowl at SoFi Stadium next February, and — the big event — the 2028 L.A. Olympics.

By all accounts, the project is 99.6% complete — drivers in the LAX loop today can spot the people mover cars doing test runs on the tracks. But those last 0.4 percentage points are a nightmare. The last technical steps before its opening are things like safety and security testing. And also settling a very childish dispute between the airport and the contractors.

Obviously, the project missed the World Cup. Whether it will be operating in time for the Super Bowl is open to question. There’s even reason to doubt it will be ready for the Olympics. Meanwhile, its cost has ballooned from the original estimate of $1.95 billion to a projected $3.3 billion, at least.

That will make it considerably more expensive than such major projects as the UCLA Ronald Reagan Hospital, completed in 2004 for an inflation-adjusted $2 billion, or the Getty Center, which cost an inflation-adjusted $2.6 billion.

Those figures come from a report issued in June 2025 by the Los Angeles County grand jury (and expertly parsed by filmmaker Nick Andert on YouTube). The jury alleged that the construction consortium — LINXS, for “LAX Integrated Express Solution” — in effect held the project hostage by threatening delays in order to squeeze more money from Los Angeles World Airports, the city enterprise that owns and operates LAX. LINXS has a 30-year contract to design, build finance and operate the people mover once it’s finished.

Recently, the relationship has gotten worse. On July 9, the contractors sued the city for allegedly refusing to settle a construction dispute as a plot to subject the contractors to severe financial penalties from their lenders. As it happens, that’s the same stratagem the grand jury detected — except the jury blamed the contractors for exploiting the city’s desire to complete the project on time to force the city to agree to pay millions of dollars for disputed change orders.

On July 21, as my colleague Colleen Shalby has reported, the bond rating firm Fitch downgraded the project bonds to “junk” status (the second time they’ve sunk to that level). Fitch cited “existing discord” between the city and the contractors that could lead to further delays in the project and a default on the bonds.

The relationship has continued to deteriorate. On July 24, the city accused LINXS of eavesdropping on a confidential conversation between a city consultant and a city lawyer, ostensibly regarding the city’s litigation strategy. The privileged conversation, according to the city, provided gist for the LINXS lawsuit.

The city has asked the judge presiding over the case to bar two Chicago lawyers working for LINXS who it says were linked to the breach from appearing in the case. One of those lawyers even wrote a letter to LAWA admitting that a LINXS employee overheard the conversation and adding, a bit ominously, that LINXS had avoided putting all the details of the conversation into its lawsuit to avoid “embarrassing” the LAWA attorney. The Los Angeles County judge hasn’t yet ruled.

To understand how the people mover mushroomed in price, let’s start at the beginning. According to the grand jury, LAWA placed the project in the hands of blue-ribbon partners. Its contract with the project builders was drafted by the law firm Nossaman, whose expertise covered such public-private public works. The construction consortium was headed by Fluor Corp., a leading construction firm.

The consortium was tasked with designing, building and financing the project, and operating and maintaining the people mover for 25 years after its completion. The arrangement was aimed at minimizing the number and cost of change orders, which are the bane of construction projects. Neither Nossaman nor Fluor responded to my questions about their roles in the project.

“The Jury found no fraud, no corruption and no mismanagement,” the grand jury reported, nor any “nefarious villain that the Jury can recommend going after.”

Yet over time, the project incurred an astonishing $880 million in change orders, swamping the original $1.95-billion cost estimate.

So what went wrong?

(LAWA told me by email that it “does not intend to comment on matters related to private financing arrangements, lender discussions, contractual milestones, or rating agency decisions involving the LINXS consortium.”)

The grand jury pointed to the appointment of a “project neutral,” a mediator-like figure whose job, as the jury found, was to listen to both sides in a dispute and calculate how it would be resolved if it came to litigation — an outcome LAWA was desperate to avoid due to the likelihood that any lawsuits could delay the project by years. I couldn’t reach the project neutral, John C. O’Rourke Jr., a Chicago lawyer who has made this practice his specialty.

LAWA soon noticed that O’Rourke almost invariably sided with the contractors. But there was no provision in the contract to replace him if either side was dissatisfied — a flaw the jury blamed on Nossaman.

The first major dispute concerned building codes. The construction contract said the project had to comply with the city’s bridge code, but that was wrong. The right code was the seismic code. City officials communicated that to LINXS, but not in writing, so LINKS went ahead and designed it to meet the wrong code. LAWA’s position is that LINXS, as the designer and builder, should have figured out the right code itself.

LINXS asked for $143 million to change the specifications. The project neutral ruled that a lawsuit would yield $97 million. LAWA concluded that though it might win in court, a lawsuit would take so long that, in the jury’s words, it would “endanger the completion of the project.” So it paid the contractors $97 million.

That set a pattern.

LAWA reached an informal agreement with the city that permit applications for the people mover would get priority, with approvals to come within 20 days. The contractors, according to the grand jury, exploited this agreement to the hilt. City officials told the jury that LINXS overwhelmed them with permit submissions — “two-foot tall piles of documents” that couldn’t conceivably be reviewed in the time allowed.

Consequently, construction delays mounted, all transmogrified into change orders. If all these claims had to go to court, progress at LAX would grind to a halt. Pressure to move the project along mounted, and in 2024 LAWA agreed to settle the contractors’ claims for $550 million. Another $233 million in smaller change orders brought the total to $880 million.

In its lawsuit, LINXS turned this scenario around, accusing LAWA of pressuring the contractors into making concessions by “intentionally delaying or refusing to grant additional time to complete construction.”

While the overall project deadline is Dec. 8, the contractors face an even tighter schedule: They have to complete construction by Oct. 8, or their lenders may demand payment of their loans in full.

The lawsuit turns on what laypeople might consider a minor quibble: who is responsible for the equipment connecting the city Department of Water and Power’s electrical grid to the people mover. LINXS says it’s the city, and that when DWP workers opened an electrical cabinet to make some repairs, it put the cabinet out of commission for six months. It demanded a 141-day extension on its completion deadline.

LAWA refused, stating that whatever problems are in the equipment are LINXS’ to fix. So now they’re in court.

Over at Fitch, the feeling is that the project will almost certainly be finished in time for the Olympics, mostly because the consequences of missing that deadline are too horrible to contemplate.

But resorting to litigation rather than negotiating a settlement to this trivial dispute could open a new source of pain.

“When you go into the legal system,” says Seth Lehman, the Fitch analyst on the LNXS bonds, “it has a timeline of its own.”

Will that timeline allow the project to carry passengers coming for the Olympics? Place your bets now.

Like any loyal citizens, we Angelenos like to think we’re No. 1 in important things. The conclusion is often debatable, but not in respect to one major municipal project.

The LAX people mover train, which is designed to carry 10,000 passengers a day throughout the airport’s terminals and out to a rental car center and the green line of the L.A. subway, can lay claim to being the most ridiculously mismanaged construction project in the United States.

Construction on the 2.25-mile line began in 2019, with a projected opening in 2023. The idea was for it to be ready to accommodate crowds coming to this year’s World Cup, followed by the 2027 Super Bowl at SoFi Stadium next February, and — the big event — the 2028 L.A. Olympics.

By all accounts, the project is 99.6% complete — drivers in the LAX loop today can spot the people mover cars doing test runs on the tracks. But those last 0.4 percentage points are a nightmare. The last technical steps before its opening are things like safety and security testing. And also settling a very childish dispute between the airport and the contractors.

Obviously, the project missed the World Cup. Whether it will be operating in time for the Super Bowl is open to question. There’s even reason to doubt it will be ready for the Olympics. Meanwhile, its cost has ballooned from the original estimate of $1.95 billion to a projected $3.3 billion, at least.

That will make it considerably more expensive than such major projects as the UCLA Ronald Reagan Hospital, completed in 2004 for an inflation-adjusted $2 billion, or the Getty Center, which cost an inflation-adjusted $2.6 billion.

Those figures come from a report issued in June 2025 by the Los Angeles County grand jury (and expertly parsed by filmmaker Nick Andert on YouTube). The jury alleged that the construction consortium — LINXS, for “LAX Integrated Express Solution” — in effect held the project hostage by threatening delays in order to squeeze more money from Los Angeles World Airports, the city enterprise that owns and operates LAX. LINXS has a 30-year contract to design, build finance and operate the people mover once it’s finished.

Recently, the relationship has gotten worse. On July 9, the contractors sued the city for allegedly refusing to settle a construction dispute as a plot to subject the contractors to severe financial penalties from their lenders. As it happens, that’s the same stratagem the grand jury detected — except the jury blamed the contractors for exploiting the city’s desire to complete the project on time to force the city to agree to pay millions of dollars for disputed change orders.

On July 21, as my colleague Colleen Shalby has reported, the bond rating firm Fitch downgraded the project bonds to “junk” status (the second time they’ve sunk to that level). Fitch cited “existing discord” between the city and the contractors that could lead to further delays in the project and a default on the bonds.

The relationship has continued to deteriorate. On July 24, the city accused LINXS of eavesdropping on a confidential conversation between a city consultant and a city lawyer, ostensibly regarding the city’s litigation strategy. The privileged conversation, according to the city, provided gist for the LINXS lawsuit.

The city has asked the judge presiding over the case to bar two Chicago lawyers working for LINXS who it says were linked to the breach from appearing in the case. One of those lawyers even wrote a letter to LAWA admitting that a LINXS employee overheard the conversation and adding, a bit ominously, that LINXS had avoided putting all the details of the conversation into its lawsuit to avoid “embarrassing” the LAWA attorney. The Los Angeles County judge hasn’t yet ruled.

To understand how the people mover mushroomed in price, let’s start at the beginning. According to the grand jury, LAWA placed the project in the hands of blue-ribbon partners. Its contract with the project builders was drafted by the law firm Nossaman, whose expertise covered such public-private public works. The construction consortium was headed by Fluor Corp., a leading construction firm.

The consortium was tasked with designing, building and financing the project, and operating and maintaining the people mover for 25 years after its completion. The arrangement was aimed at minimizing the number and cost of change orders, which are the bane of construction projects. Neither Nossaman nor Fluor responded to my questions about their roles in the project.

“The Jury found no fraud, no corruption and no mismanagement,” the grand jury reported, nor any “nefarious villain that the Jury can recommend going after.”

Yet over time, the project incurred an astonishing $880 million in change orders, swamping the original $1.95-billion cost estimate.

So what went wrong?

(LAWA told me by email that it “does not intend to comment on matters related to private financing arrangements, lender discussions, contractual milestones, or rating agency decisions involving the LINXS consortium.”)

The grand jury pointed to the appointment of a “project neutral,” a mediator-like figure whose job, as the jury found, was to listen to both sides in a dispute and calculate how it would be resolved if it came to litigation — an outcome LAWA was desperate to avoid due to the likelihood that any lawsuits could delay the project by years. I couldn’t reach the project neutral, John C. O’Rourke Jr., a Chicago lawyer who has made this practice his specialty.

LAWA soon noticed that O’Rourke almost invariably sided with the contractors. But there was no provision in the contract to replace him if either side was dissatisfied — a flaw the jury blamed on Nossaman.

The first major dispute concerned building codes. The construction contract said the project had to comply with the city’s bridge code, but that was wrong. The right code was the seismic code. City officials communicated that to LINXS, but not in writing, so LINKS went ahead and designed it to meet the wrong code. LAWA’s position is that LINXS, as the designer and builder, should have figured out the right code itself.

LINXS asked for $143 million to change the specifications. The project neutral ruled that a lawsuit would yield $97 million. LAWA concluded that though it might win in court, a lawsuit would take so long that, in the jury’s words, it would “endanger the completion of the project.” So it paid the contractors $97 million.

That set a pattern.

LAWA reached an informal agreement with the city that permit applications for the people mover would get priority, with approvals to come within 20 days. The contractors, according to the grand jury, exploited this agreement to the hilt. City officials told the jury that LINXS overwhelmed them with permit submissions — “two-foot tall piles of documents” that couldn’t conceivably be reviewed in the time allowed.

Consequently, construction delays mounted, all transmogrified into change orders. If all these claims had to go to court, progress at LAX would grind to a halt. Pressure to move the project along mounted, and in 2024 LAWA agreed to settle the contractors’ claims for $550 million. Another $233 million in smaller change orders brought the total to $880 million.

In its lawsuit, LINXS turned this scenario around, accusing LAWA of pressuring the contractors into making concessions by “intentionally delaying or refusing to grant additional time to complete construction.”

While the overall project deadline is Dec. 8, the contractors face an even tighter schedule: They have to complete construction by Oct. 8, or their lenders may demand payment of their loans in full.

The lawsuit turns on what laypeople might consider a minor quibble: who is responsible for the equipment connecting the city Department of Water and Power’s electrical grid to the people mover. LINXS says it’s the city, and that when DWP workers opened an electrical cabinet to make some repairs, it put the cabinet out of commission for six months. It demanded a 141-day extension on its completion deadline.

LAWA refused, stating that whatever problems are in the equipment are LINXS’ to fix. So now they’re in court.

Over at Fitch, the feeling is that the project will almost certainly be finished in time for the Olympics, mostly because the consequences of missing that deadline are too horrible to contemplate.

But resorting to litigation rather than negotiating a settlement to this trivial dispute could open a new source of pain.

“When you go into the legal system,” says Seth Lehman, the Fitch analyst on the LNXS bonds, “it has a timeline of its own.”

Will that timeline allow the project to carry passengers coming for the Olympics? Place your bets now.

Like any loyal citizens, we Angelenos like to think we’re No. 1 in important things. The conclusion is often debatable, but not in respect to one major municipal project.

The LAX people mover train, which is designed to carry 10,000 passengers a day throughout the airport’s terminals and out to a rental car center and the green line of the L.A. subway, can lay claim to being the most ridiculously mismanaged construction project in the United States.

Construction on the 2.25-mile line began in 2019, with a projected opening in 2023. The idea was for it to be ready to accommodate crowds coming to this year’s World Cup, followed by the 2027 Super Bowl at SoFi Stadium next February, and — the big event — the 2028 L.A. Olympics.

By all accounts, the project is 99.6% complete — drivers in the LAX loop today can spot the people mover cars doing test runs on the tracks. But those last 0.4 percentage points are a nightmare. The last technical steps before its opening are things like safety and security testing. And also settling a very childish dispute between the airport and the contractors.

Obviously, the project missed the World Cup. Whether it will be operating in time for the Super Bowl is open to question. There’s even reason to doubt it will be ready for the Olympics. Meanwhile, its cost has ballooned from the original estimate of $1.95 billion to a projected $3.3 billion, at least.

That will make it considerably more expensive than such major projects as the UCLA Ronald Reagan Hospital, completed in 2004 for an inflation-adjusted $2 billion, or the Getty Center, which cost an inflation-adjusted $2.6 billion.

Those figures come from a report issued in June 2025 by the Los Angeles County grand jury (and expertly parsed by filmmaker Nick Andert on YouTube). The jury alleged that the construction consortium — LINXS, for “LAX Integrated Express Solution” — in effect held the project hostage by threatening delays in order to squeeze more money from Los Angeles World Airports, the city enterprise that owns and operates LAX. LINXS has a 30-year contract to design, build finance and operate the people mover once it’s finished.

Recently, the relationship has gotten worse. On July 9, the contractors sued the city for allegedly refusing to settle a construction dispute as a plot to subject the contractors to severe financial penalties from their lenders. As it happens, that’s the same stratagem the grand jury detected — except the jury blamed the contractors for exploiting the city’s desire to complete the project on time to force the city to agree to pay millions of dollars for disputed change orders.

On July 21, as my colleague Colleen Shalby has reported, the bond rating firm Fitch downgraded the project bonds to “junk” status (the second time they’ve sunk to that level). Fitch cited “existing discord” between the city and the contractors that could lead to further delays in the project and a default on the bonds.

The relationship has continued to deteriorate. On July 24, the city accused LINXS of eavesdropping on a confidential conversation between a city consultant and a city lawyer, ostensibly regarding the city’s litigation strategy. The privileged conversation, according to the city, provided gist for the LINXS lawsuit.

The city has asked the judge presiding over the case to bar two Chicago lawyers working for LINXS who it says were linked to the breach from appearing in the case. One of those lawyers even wrote a letter to LAWA admitting that a LINXS employee overheard the conversation and adding, a bit ominously, that LINXS had avoided putting all the details of the conversation into its lawsuit to avoid “embarrassing” the LAWA attorney. The Los Angeles County judge hasn’t yet ruled.

To understand how the people mover mushroomed in price, let’s start at the beginning. According to the grand jury, LAWA placed the project in the hands of blue-ribbon partners. Its contract with the project builders was drafted by the law firm Nossaman, whose expertise covered such public-private public works. The construction consortium was headed by Fluor Corp., a leading construction firm.

The consortium was tasked with designing, building and financing the project, and operating and maintaining the people mover for 25 years after its completion. The arrangement was aimed at minimizing the number and cost of change orders, which are the bane of construction projects. Neither Nossaman nor Fluor responded to my questions about their roles in the project.

“The Jury found no fraud, no corruption and no mismanagement,” the grand jury reported, nor any “nefarious villain that the Jury can recommend going after.”

Yet over time, the project incurred an astonishing $880 million in change orders, swamping the original $1.95-billion cost estimate.

So what went wrong?

(LAWA told me by email that it “does not intend to comment on matters related to private financing arrangements, lender discussions, contractual milestones, or rating agency decisions involving the LINXS consortium.”)

The grand jury pointed to the appointment of a “project neutral,” a mediator-like figure whose job, as the jury found, was to listen to both sides in a dispute and calculate how it would be resolved if it came to litigation — an outcome LAWA was desperate to avoid due to the likelihood that any lawsuits could delay the project by years. I couldn’t reach the project neutral, John C. O’Rourke Jr., a Chicago lawyer who has made this practice his specialty.

LAWA soon noticed that O’Rourke almost invariably sided with the contractors. But there was no provision in the contract to replace him if either side was dissatisfied — a flaw the jury blamed on Nossaman.

The first major dispute concerned building codes. The construction contract said the project had to comply with the city’s bridge code, but that was wrong. The right code was the seismic code. City officials communicated that to LINXS, but not in writing, so LINKS went ahead and designed it to meet the wrong code. LAWA’s position is that LINXS, as the designer and builder, should have figured out the right code itself.

LINXS asked for $143 million to change the specifications. The project neutral ruled that a lawsuit would yield $97 million. LAWA concluded that though it might win in court, a lawsuit would take so long that, in the jury’s words, it would “endanger the completion of the project.” So it paid the contractors $97 million.

That set a pattern.

LAWA reached an informal agreement with the city that permit applications for the people mover would get priority, with approvals to come within 20 days. The contractors, according to the grand jury, exploited this agreement to the hilt. City officials told the jury that LINXS overwhelmed them with permit submissions — “two-foot tall piles of documents” that couldn’t conceivably be reviewed in the time allowed.

Consequently, construction delays mounted, all transmogrified into change orders. If all these claims had to go to court, progress at LAX would grind to a halt. Pressure to move the project along mounted, and in 2024 LAWA agreed to settle the contractors’ claims for $550 million. Another $233 million in smaller change orders brought the total to $880 million.

In its lawsuit, LINXS turned this scenario around, accusing LAWA of pressuring the contractors into making concessions by “intentionally delaying or refusing to grant additional time to complete construction.”

While the overall project deadline is Dec. 8, the contractors face an even tighter schedule: They have to complete construction by Oct. 8, or their lenders may demand payment of their loans in full.

The lawsuit turns on what laypeople might consider a minor quibble: who is responsible for the equipment connecting the city Department of Water and Power’s electrical grid to the people mover. LINXS says it’s the city, and that when DWP workers opened an electrical cabinet to make some repairs, it put the cabinet out of commission for six months. It demanded a 141-day extension on its completion deadline.

LAWA refused, stating that whatever problems are in the equipment are LINXS’ to fix. So now they’re in court.

Over at Fitch, the feeling is that the project will almost certainly be finished in time for the Olympics, mostly because the consequences of missing that deadline are too horrible to contemplate.

But resorting to litigation rather than negotiating a settlement to this trivial dispute could open a new source of pain.

“When you go into the legal system,” says Seth Lehman, the Fitch analyst on the LNXS bonds, “it has a timeline of its own.”

Will that timeline allow the project to carry passengers coming for the Olympics? Place your bets now.

Like any loyal citizens, we Angelenos like to think we’re No. 1 in important things. The conclusion is often debatable, but not in respect to one major municipal project.

The LAX people mover train, which is designed to carry 10,000 passengers a day throughout the airport’s terminals and out to a rental car center and the green line of the L.A. subway, can lay claim to being the most ridiculously mismanaged construction project in the United States.

Construction on the 2.25-mile line began in 2019, with a projected opening in 2023. The idea was for it to be ready to accommodate crowds coming to this year’s World Cup, followed by the 2027 Super Bowl at SoFi Stadium next February, and — the big event — the 2028 L.A. Olympics.

By all accounts, the project is 99.6% complete — drivers in the LAX loop today can spot the people mover cars doing test runs on the tracks. But those last 0.4 percentage points are a nightmare. The last technical steps before its opening are things like safety and security testing. And also settling a very childish dispute between the airport and the contractors.

Obviously, the project missed the World Cup. Whether it will be operating in time for the Super Bowl is open to question. There’s even reason to doubt it will be ready for the Olympics. Meanwhile, its cost has ballooned from the original estimate of $1.95 billion to a projected $3.3 billion, at least.

That will make it considerably more expensive than such major projects as the UCLA Ronald Reagan Hospital, completed in 2004 for an inflation-adjusted $2 billion, or the Getty Center, which cost an inflation-adjusted $2.6 billion.

Those figures come from a report issued in June 2025 by the Los Angeles County grand jury (and expertly parsed by filmmaker Nick Andert on YouTube). The jury alleged that the construction consortium — LINXS, for “LAX Integrated Express Solution” — in effect held the project hostage by threatening delays in order to squeeze more money from Los Angeles World Airports, the city enterprise that owns and operates LAX. LINXS has a 30-year contract to design, build finance and operate the people mover once it’s finished.

Recently, the relationship has gotten worse. On July 9, the contractors sued the city for allegedly refusing to settle a construction dispute as a plot to subject the contractors to severe financial penalties from their lenders. As it happens, that’s the same stratagem the grand jury detected — except the jury blamed the contractors for exploiting the city’s desire to complete the project on time to force the city to agree to pay millions of dollars for disputed change orders.

On July 21, as my colleague Colleen Shalby has reported, the bond rating firm Fitch downgraded the project bonds to “junk” status (the second time they’ve sunk to that level). Fitch cited “existing discord” between the city and the contractors that could lead to further delays in the project and a default on the bonds.

The relationship has continued to deteriorate. On July 24, the city accused LINXS of eavesdropping on a confidential conversation between a city consultant and a city lawyer, ostensibly regarding the city’s litigation strategy. The privileged conversation, according to the city, provided gist for the LINXS lawsuit.

The city has asked the judge presiding over the case to bar two Chicago lawyers working for LINXS who it says were linked to the breach from appearing in the case. One of those lawyers even wrote a letter to LAWA admitting that a LINXS employee overheard the conversation and adding, a bit ominously, that LINXS had avoided putting all the details of the conversation into its lawsuit to avoid “embarrassing” the LAWA attorney. The Los Angeles County judge hasn’t yet ruled.

To understand how the people mover mushroomed in price, let’s start at the beginning. According to the grand jury, LAWA placed the project in the hands of blue-ribbon partners. Its contract with the project builders was drafted by the law firm Nossaman, whose expertise covered such public-private public works. The construction consortium was headed by Fluor Corp., a leading construction firm.

The consortium was tasked with designing, building and financing the project, and operating and maintaining the people mover for 25 years after its completion. The arrangement was aimed at minimizing the number and cost of change orders, which are the bane of construction projects. Neither Nossaman nor Fluor responded to my questions about their roles in the project.

“The Jury found no fraud, no corruption and no mismanagement,” the grand jury reported, nor any “nefarious villain that the Jury can recommend going after.”

Yet over time, the project incurred an astonishing $880 million in change orders, swamping the original $1.95-billion cost estimate.

So what went wrong?

(LAWA told me by email that it “does not intend to comment on matters related to private financing arrangements, lender discussions, contractual milestones, or rating agency decisions involving the LINXS consortium.”)

The grand jury pointed to the appointment of a “project neutral,” a mediator-like figure whose job, as the jury found, was to listen to both sides in a dispute and calculate how it would be resolved if it came to litigation — an outcome LAWA was desperate to avoid due to the likelihood that any lawsuits could delay the project by years. I couldn’t reach the project neutral, John C. O’Rourke Jr., a Chicago lawyer who has made this practice his specialty.

LAWA soon noticed that O’Rourke almost invariably sided with the contractors. But there was no provision in the contract to replace him if either side was dissatisfied — a flaw the jury blamed on Nossaman.

The first major dispute concerned building codes. The construction contract said the project had to comply with the city’s bridge code, but that was wrong. The right code was the seismic code. City officials communicated that to LINXS, but not in writing, so LINKS went ahead and designed it to meet the wrong code. LAWA’s position is that LINXS, as the designer and builder, should have figured out the right code itself.

LINXS asked for $143 million to change the specifications. The project neutral ruled that a lawsuit would yield $97 million. LAWA concluded that though it might win in court, a lawsuit would take so long that, in the jury’s words, it would “endanger the completion of the project.” So it paid the contractors $97 million.

That set a pattern.

LAWA reached an informal agreement with the city that permit applications for the people mover would get priority, with approvals to come within 20 days. The contractors, according to the grand jury, exploited this agreement to the hilt. City officials told the jury that LINXS overwhelmed them with permit submissions — “two-foot tall piles of documents” that couldn’t conceivably be reviewed in the time allowed.

Consequently, construction delays mounted, all transmogrified into change orders. If all these claims had to go to court, progress at LAX would grind to a halt. Pressure to move the project along mounted, and in 2024 LAWA agreed to settle the contractors’ claims for $550 million. Another $233 million in smaller change orders brought the total to $880 million.

In its lawsuit, LINXS turned this scenario around, accusing LAWA of pressuring the contractors into making concessions by “intentionally delaying or refusing to grant additional time to complete construction.”

While the overall project deadline is Dec. 8, the contractors face an even tighter schedule: They have to complete construction by Oct. 8, or their lenders may demand payment of their loans in full.

The lawsuit turns on what laypeople might consider a minor quibble: who is responsible for the equipment connecting the city Department of Water and Power’s electrical grid to the people mover. LINXS says it’s the city, and that when DWP workers opened an electrical cabinet to make some repairs, it put the cabinet out of commission for six months. It demanded a 141-day extension on its completion deadline.

LAWA refused, stating that whatever problems are in the equipment are LINXS’ to fix. So now they’re in court.

Over at Fitch, the feeling is that the project will almost certainly be finished in time for the Olympics, mostly because the consequences of missing that deadline are too horrible to contemplate.

But resorting to litigation rather than negotiating a settlement to this trivial dispute could open a new source of pain.

“When you go into the legal system,” says Seth Lehman, the Fitch analyst on the LNXS bonds, “it has a timeline of its own.”

Will that timeline allow the project to carry passengers coming for the Olympics? Place your bets now.

Like any loyal citizens, we Angelenos like to think we’re No. 1 in important things. The conclusion is often debatable, but not in respect to one major municipal project.

The LAX people mover train, which is designed to carry 10,000 passengers a day throughout the airport’s terminals and out to a rental car center and the green line of the L.A. subway, can lay claim to being the most ridiculously mismanaged construction project in the United States.

Construction on the 2.25-mile line began in 2019, with a projected opening in 2023. The idea was for it to be ready to accommodate crowds coming to this year’s World Cup, followed by the 2027 Super Bowl at SoFi Stadium next February, and — the big event — the 2028 L.A. Olympics.

By all accounts, the project is 99.6% complete — drivers in the LAX loop today can spot the people mover cars doing test runs on the tracks. But those last 0.4 percentage points are a nightmare. The last technical steps before its opening are things like safety and security testing. And also settling a very childish dispute between the airport and the contractors.

Obviously, the project missed the World Cup. Whether it will be operating in time for the Super Bowl is open to question. There’s even reason to doubt it will be ready for the Olympics. Meanwhile, its cost has ballooned from the original estimate of $1.95 billion to a projected $3.3 billion, at least.

That will make it considerably more expensive than such major projects as the UCLA Ronald Reagan Hospital, completed in 2004 for an inflation-adjusted $2 billion, or the Getty Center, which cost an inflation-adjusted $2.6 billion.

Those figures come from a report issued in June 2025 by the Los Angeles County grand jury (and expertly parsed by filmmaker Nick Andert on YouTube). The jury alleged that the construction consortium — LINXS, for “LAX Integrated Express Solution” — in effect held the project hostage by threatening delays in order to squeeze more money from Los Angeles World Airports, the city enterprise that owns and operates LAX. LINXS has a 30-year contract to design, build finance and operate the people mover once it’s finished.

Recently, the relationship has gotten worse. On July 9, the contractors sued the city for allegedly refusing to settle a construction dispute as a plot to subject the contractors to severe financial penalties from their lenders. As it happens, that’s the same stratagem the grand jury detected — except the jury blamed the contractors for exploiting the city’s desire to complete the project on time to force the city to agree to pay millions of dollars for disputed change orders.

On July 21, as my colleague Colleen Shalby has reported, the bond rating firm Fitch downgraded the project bonds to “junk” status (the second time they’ve sunk to that level). Fitch cited “existing discord” between the city and the contractors that could lead to further delays in the project and a default on the bonds.

The relationship has continued to deteriorate. On July 24, the city accused LINXS of eavesdropping on a confidential conversation between a city consultant and a city lawyer, ostensibly regarding the city’s litigation strategy. The privileged conversation, according to the city, provided gist for the LINXS lawsuit.

The city has asked the judge presiding over the case to bar two Chicago lawyers working for LINXS who it says were linked to the breach from appearing in the case. One of those lawyers even wrote a letter to LAWA admitting that a LINXS employee overheard the conversation and adding, a bit ominously, that LINXS had avoided putting all the details of the conversation into its lawsuit to avoid “embarrassing” the LAWA attorney. The Los Angeles County judge hasn’t yet ruled.

To understand how the people mover mushroomed in price, let’s start at the beginning. According to the grand jury, LAWA placed the project in the hands of blue-ribbon partners. Its contract with the project builders was drafted by the law firm Nossaman, whose expertise covered such public-private public works. The construction consortium was headed by Fluor Corp., a leading construction firm.

The consortium was tasked with designing, building and financing the project, and operating and maintaining the people mover for 25 years after its completion. The arrangement was aimed at minimizing the number and cost of change orders, which are the bane of construction projects. Neither Nossaman nor Fluor responded to my questions about their roles in the project.

“The Jury found no fraud, no corruption and no mismanagement,” the grand jury reported, nor any “nefarious villain that the Jury can recommend going after.”

Yet over time, the project incurred an astonishing $880 million in change orders, swamping the original $1.95-billion cost estimate.

So what went wrong?

(LAWA told me by email that it “does not intend to comment on matters related to private financing arrangements, lender discussions, contractual milestones, or rating agency decisions involving the LINXS consortium.”)

The grand jury pointed to the appointment of a “project neutral,” a mediator-like figure whose job, as the jury found, was to listen to both sides in a dispute and calculate how it would be resolved if it came to litigation — an outcome LAWA was desperate to avoid due to the likelihood that any lawsuits could delay the project by years. I couldn’t reach the project neutral, John C. O’Rourke Jr., a Chicago lawyer who has made this practice his specialty.

LAWA soon noticed that O’Rourke almost invariably sided with the contractors. But there was no provision in the contract to replace him if either side was dissatisfied — a flaw the jury blamed on Nossaman.

The first major dispute concerned building codes. The construction contract said the project had to comply with the city’s bridge code, but that was wrong. The right code was the seismic code. City officials communicated that to LINXS, but not in writing, so LINKS went ahead and designed it to meet the wrong code. LAWA’s position is that LINXS, as the designer and builder, should have figured out the right code itself.

LINXS asked for $143 million to change the specifications. The project neutral ruled that a lawsuit would yield $97 million. LAWA concluded that though it might win in court, a lawsuit would take so long that, in the jury’s words, it would “endanger the completion of the project.” So it paid the contractors $97 million.

That set a pattern.

LAWA reached an informal agreement with the city that permit applications for the people mover would get priority, with approvals to come within 20 days. The contractors, according to the grand jury, exploited this agreement to the hilt. City officials told the jury that LINXS overwhelmed them with permit submissions — “two-foot tall piles of documents” that couldn’t conceivably be reviewed in the time allowed.

Consequently, construction delays mounted, all transmogrified into change orders. If all these claims had to go to court, progress at LAX would grind to a halt. Pressure to move the project along mounted, and in 2024 LAWA agreed to settle the contractors’ claims for $550 million. Another $233 million in smaller change orders brought the total to $880 million.

In its lawsuit, LINXS turned this scenario around, accusing LAWA of pressuring the contractors into making concessions by “intentionally delaying or refusing to grant additional time to complete construction.”

While the overall project deadline is Dec. 8, the contractors face an even tighter schedule: They have to complete construction by Oct. 8, or their lenders may demand payment of their loans in full.

The lawsuit turns on what laypeople might consider a minor quibble: who is responsible for the equipment connecting the city Department of Water and Power’s electrical grid to the people mover. LINXS says it’s the city, and that when DWP workers opened an electrical cabinet to make some repairs, it put the cabinet out of commission for six months. It demanded a 141-day extension on its completion deadline.

LAWA refused, stating that whatever problems are in the equipment are LINXS’ to fix. So now they’re in court.

Over at Fitch, the feeling is that the project will almost certainly be finished in time for the Olympics, mostly because the consequences of missing that deadline are too horrible to contemplate.

But resorting to litigation rather than negotiating a settlement to this trivial dispute could open a new source of pain.

“When you go into the legal system,” says Seth Lehman, the Fitch analyst on the LNXS bonds, “it has a timeline of its own.”

Will that timeline allow the project to carry passengers coming for the Olympics? Place your bets now.

Like any loyal citizens, we Angelenos like to think we’re No. 1 in important things. The conclusion is often debatable, but not in respect to one major municipal project.

The LAX people mover train, which is designed to carry 10,000 passengers a day throughout the airport’s terminals and out to a rental car center and the green line of the L.A. subway, can lay claim to being the most ridiculously mismanaged construction project in the United States.

Construction on the 2.25-mile line began in 2019, with a projected opening in 2023. The idea was for it to be ready to accommodate crowds coming to this year’s World Cup, followed by the 2027 Super Bowl at SoFi Stadium next February, and — the big event — the 2028 L.A. Olympics.

By all accounts, the project is 99.6% complete — drivers in the LAX loop today can spot the people mover cars doing test runs on the tracks. But those last 0.4 percentage points are a nightmare. The last technical steps before its opening are things like safety and security testing. And also settling a very childish dispute between the airport and the contractors.

Obviously, the project missed the World Cup. Whether it will be operating in time for the Super Bowl is open to question. There’s even reason to doubt it will be ready for the Olympics. Meanwhile, its cost has ballooned from the original estimate of $1.95 billion to a projected $3.3 billion, at least.

That will make it considerably more expensive than such major projects as the UCLA Ronald Reagan Hospital, completed in 2004 for an inflation-adjusted $2 billion, or the Getty Center, which cost an inflation-adjusted $2.6 billion.

Those figures come from a report issued in June 2025 by the Los Angeles County grand jury (and expertly parsed by filmmaker Nick Andert on YouTube). The jury alleged that the construction consortium — LINXS, for “LAX Integrated Express Solution” — in effect held the project hostage by threatening delays in order to squeeze more money from Los Angeles World Airports, the city enterprise that owns and operates LAX. LINXS has a 30-year contract to design, build finance and operate the people mover once it’s finished.

Recently, the relationship has gotten worse. On July 9, the contractors sued the city for allegedly refusing to settle a construction dispute as a plot to subject the contractors to severe financial penalties from their lenders. As it happens, that’s the same stratagem the grand jury detected — except the jury blamed the contractors for exploiting the city’s desire to complete the project on time to force the city to agree to pay millions of dollars for disputed change orders.

On July 21, as my colleague Colleen Shalby has reported, the bond rating firm Fitch downgraded the project bonds to “junk” status (the second time they’ve sunk to that level). Fitch cited “existing discord” between the city and the contractors that could lead to further delays in the project and a default on the bonds.

The relationship has continued to deteriorate. On July 24, the city accused LINXS of eavesdropping on a confidential conversation between a city consultant and a city lawyer, ostensibly regarding the city’s litigation strategy. The privileged conversation, according to the city, provided gist for the LINXS lawsuit.

The city has asked the judge presiding over the case to bar two Chicago lawyers working for LINXS who it says were linked to the breach from appearing in the case. One of those lawyers even wrote a letter to LAWA admitting that a LINXS employee overheard the conversation and adding, a bit ominously, that LINXS had avoided putting all the details of the conversation into its lawsuit to avoid “embarrassing” the LAWA attorney. The Los Angeles County judge hasn’t yet ruled.

To understand how the people mover mushroomed in price, let’s start at the beginning. According to the grand jury, LAWA placed the project in the hands of blue-ribbon partners. Its contract with the project builders was drafted by the law firm Nossaman, whose expertise covered such public-private public works. The construction consortium was headed by Fluor Corp., a leading construction firm.

The consortium was tasked with designing, building and financing the project, and operating and maintaining the people mover for 25 years after its completion. The arrangement was aimed at minimizing the number and cost of change orders, which are the bane of construction projects. Neither Nossaman nor Fluor responded to my questions about their roles in the project.

“The Jury found no fraud, no corruption and no mismanagement,” the grand jury reported, nor any “nefarious villain that the Jury can recommend going after.”

Yet over time, the project incurred an astonishing $880 million in change orders, swamping the original $1.95-billion cost estimate.

So what went wrong?

(LAWA told me by email that it “does not intend to comment on matters related to private financing arrangements, lender discussions, contractual milestones, or rating agency decisions involving the LINXS consortium.”)

The grand jury pointed to the appointment of a “project neutral,” a mediator-like figure whose job, as the jury found, was to listen to both sides in a dispute and calculate how it would be resolved if it came to litigation — an outcome LAWA was desperate to avoid due to the likelihood that any lawsuits could delay the project by years. I couldn’t reach the project neutral, John C. O’Rourke Jr., a Chicago lawyer who has made this practice his specialty.

LAWA soon noticed that O’Rourke almost invariably sided with the contractors. But there was no provision in the contract to replace him if either side was dissatisfied — a flaw the jury blamed on Nossaman.

The first major dispute concerned building codes. The construction contract said the project had to comply with the city’s bridge code, but that was wrong. The right code was the seismic code. City officials communicated that to LINXS, but not in writing, so LINKS went ahead and designed it to meet the wrong code. LAWA’s position is that LINXS, as the designer and builder, should have figured out the right code itself.

LINXS asked for $143 million to change the specifications. The project neutral ruled that a lawsuit would yield $97 million. LAWA concluded that though it might win in court, a lawsuit would take so long that, in the jury’s words, it would “endanger the completion of the project.” So it paid the contractors $97 million.

That set a pattern.

LAWA reached an informal agreement with the city that permit applications for the people mover would get priority, with approvals to come within 20 days. The contractors, according to the grand jury, exploited this agreement to the hilt. City officials told the jury that LINXS overwhelmed them with permit submissions — “two-foot tall piles of documents” that couldn’t conceivably be reviewed in the time allowed.

Consequently, construction delays mounted, all transmogrified into change orders. If all these claims had to go to court, progress at LAX would grind to a halt. Pressure to move the project along mounted, and in 2024 LAWA agreed to settle the contractors’ claims for $550 million. Another $233 million in smaller change orders brought the total to $880 million.

In its lawsuit, LINXS turned this scenario around, accusing LAWA of pressuring the contractors into making concessions by “intentionally delaying or refusing to grant additional time to complete construction.”

While the overall project deadline is Dec. 8, the contractors face an even tighter schedule: They have to complete construction by Oct. 8, or their lenders may demand payment of their loans in full.

The lawsuit turns on what laypeople might consider a minor quibble: who is responsible for the equipment connecting the city Department of Water and Power’s electrical grid to the people mover. LINXS says it’s the city, and that when DWP workers opened an electrical cabinet to make some repairs, it put the cabinet out of commission for six months. It demanded a 141-day extension on its completion deadline.

LAWA refused, stating that whatever problems are in the equipment are LINXS’ to fix. So now they’re in court.

Over at Fitch, the feeling is that the project will almost certainly be finished in time for the Olympics, mostly because the consequences of missing that deadline are too horrible to contemplate.

But resorting to litigation rather than negotiating a settlement to this trivial dispute could open a new source of pain.

“When you go into the legal system,” says Seth Lehman, the Fitch analyst on the LNXS bonds, “it has a timeline of its own.”

Will that timeline allow the project to carry passengers coming for the Olympics? Place your bets now.

Like any loyal citizens, we Angelenos like to think we’re No. 1 in important things. The conclusion is often debatable, but not in respect to one major municipal project.

The LAX people mover train, which is designed to carry 10,000 passengers a day throughout the airport’s terminals and out to a rental car center and the green line of the L.A. subway, can lay claim to being the most ridiculously mismanaged construction project in the United States.

Construction on the 2.25-mile line began in 2019, with a projected opening in 2023. The idea was for it to be ready to accommodate crowds coming to this year’s World Cup, followed by the 2027 Super Bowl at SoFi Stadium next February, and — the big event — the 2028 L.A. Olympics.

By all accounts, the project is 99.6% complete — drivers in the LAX loop today can spot the people mover cars doing test runs on the tracks. But those last 0.4 percentage points are a nightmare. The last technical steps before its opening are things like safety and security testing. And also settling a very childish dispute between the airport and the contractors.

Obviously, the project missed the World Cup. Whether it will be operating in time for the Super Bowl is open to question. There’s even reason to doubt it will be ready for the Olympics. Meanwhile, its cost has ballooned from the original estimate of $1.95 billion to a projected $3.3 billion, at least.

That will make it considerably more expensive than such major projects as the UCLA Ronald Reagan Hospital, completed in 2004 for an inflation-adjusted $2 billion, or the Getty Center, which cost an inflation-adjusted $2.6 billion.

Those figures come from a report issued in June 2025 by the Los Angeles County grand jury (and expertly parsed by filmmaker Nick Andert on YouTube). The jury alleged that the construction consortium — LINXS, for “LAX Integrated Express Solution” — in effect held the project hostage by threatening delays in order to squeeze more money from Los Angeles World Airports, the city enterprise that owns and operates LAX. LINXS has a 30-year contract to design, build finance and operate the people mover once it’s finished.

Recently, the relationship has gotten worse. On July 9, the contractors sued the city for allegedly refusing to settle a construction dispute as a plot to subject the contractors to severe financial penalties from their lenders. As it happens, that’s the same stratagem the grand jury detected — except the jury blamed the contractors for exploiting the city’s desire to complete the project on time to force the city to agree to pay millions of dollars for disputed change orders.

On July 21, as my colleague Colleen Shalby has reported, the bond rating firm Fitch downgraded the project bonds to “junk” status (the second time they’ve sunk to that level). Fitch cited “existing discord” between the city and the contractors that could lead to further delays in the project and a default on the bonds.

The relationship has continued to deteriorate. On July 24, the city accused LINXS of eavesdropping on a confidential conversation between a city consultant and a city lawyer, ostensibly regarding the city’s litigation strategy. The privileged conversation, according to the city, provided gist for the LINXS lawsuit.

The city has asked the judge presiding over the case to bar two Chicago lawyers working for LINXS who it says were linked to the breach from appearing in the case. One of those lawyers even wrote a letter to LAWA admitting that a LINXS employee overheard the conversation and adding, a bit ominously, that LINXS had avoided putting all the details of the conversation into its lawsuit to avoid “embarrassing” the LAWA attorney. The Los Angeles County judge hasn’t yet ruled.

To understand how the people mover mushroomed in price, let’s start at the beginning. According to the grand jury, LAWA placed the project in the hands of blue-ribbon partners. Its contract with the project builders was drafted by the law firm Nossaman, whose expertise covered such public-private public works. The construction consortium was headed by Fluor Corp., a leading construction firm.

The consortium was tasked with designing, building and financing the project, and operating and maintaining the people mover for 25 years after its completion. The arrangement was aimed at minimizing the number and cost of change orders, which are the bane of construction projects. Neither Nossaman nor Fluor responded to my questions about their roles in the project.

“The Jury found no fraud, no corruption and no mismanagement,” the grand jury reported, nor any “nefarious villain that the Jury can recommend going after.”

Yet over time, the project incurred an astonishing $880 million in change orders, swamping the original $1.95-billion cost estimate.

So what went wrong?

(LAWA told me by email that it “does not intend to comment on matters related to private financing arrangements, lender discussions, contractual milestones, or rating agency decisions involving the LINXS consortium.”)

The grand jury pointed to the appointment of a “project neutral,” a mediator-like figure whose job, as the jury found, was to listen to both sides in a dispute and calculate how it would be resolved if it came to litigation — an outcome LAWA was desperate to avoid due to the likelihood that any lawsuits could delay the project by years. I couldn’t reach the project neutral, John C. O’Rourke Jr., a Chicago lawyer who has made this practice his specialty.

LAWA soon noticed that O’Rourke almost invariably sided with the contractors. But there was no provision in the contract to replace him if either side was dissatisfied — a flaw the jury blamed on Nossaman.

The first major dispute concerned building codes. The construction contract said the project had to comply with the city’s bridge code, but that was wrong. The right code was the seismic code. City officials communicated that to LINXS, but not in writing, so LINKS went ahead and designed it to meet the wrong code. LAWA’s position is that LINXS, as the designer and builder, should have figured out the right code itself.

LINXS asked for $143 million to change the specifications. The project neutral ruled that a lawsuit would yield $97 million. LAWA concluded that though it might win in court, a lawsuit would take so long that, in the jury’s words, it would “endanger the completion of the project.” So it paid the contractors $97 million.

That set a pattern.

LAWA reached an informal agreement with the city that permit applications for the people mover would get priority, with approvals to come within 20 days. The contractors, according to the grand jury, exploited this agreement to the hilt. City officials told the jury that LINXS overwhelmed them with permit submissions — “two-foot tall piles of documents” that couldn’t conceivably be reviewed in the time allowed.

Consequently, construction delays mounted, all transmogrified into change orders. If all these claims had to go to court, progress at LAX would grind to a halt. Pressure to move the project along mounted, and in 2024 LAWA agreed to settle the contractors’ claims for $550 million. Another $233 million in smaller change orders brought the total to $880 million.

In its lawsuit, LINXS turned this scenario around, accusing LAWA of pressuring the contractors into making concessions by “intentionally delaying or refusing to grant additional time to complete construction.”

While the overall project deadline is Dec. 8, the contractors face an even tighter schedule: They have to complete construction by Oct. 8, or their lenders may demand payment of their loans in full.

The lawsuit turns on what laypeople might consider a minor quibble: who is responsible for the equipment connecting the city Department of Water and Power’s electrical grid to the people mover. LINXS says it’s the city, and that when DWP workers opened an electrical cabinet to make some repairs, it put the cabinet out of commission for six months. It demanded a 141-day extension on its completion deadline.

LAWA refused, stating that whatever problems are in the equipment are LINXS’ to fix. So now they’re in court.

Over at Fitch, the feeling is that the project will almost certainly be finished in time for the Olympics, mostly because the consequences of missing that deadline are too horrible to contemplate.

But resorting to litigation rather than negotiating a settlement to this trivial dispute could open a new source of pain.

“When you go into the legal system,” says Seth Lehman, the Fitch analyst on the LNXS bonds, “it has a timeline of its own.”

Will that timeline allow the project to carry passengers coming for the Olympics? Place your bets now.

Like any loyal citizens, we Angelenos like to think we’re No. 1 in important things. The conclusion is often debatable, but not in respect to one major municipal project.

The LAX people mover train, which is designed to carry 10,000 passengers a day throughout the airport’s terminals and out to a rental car center and the green line of the L.A. subway, can lay claim to being the most ridiculously mismanaged construction project in the United States.

Construction on the 2.25-mile line began in 2019, with a projected opening in 2023. The idea was for it to be ready to accommodate crowds coming to this year’s World Cup, followed by the 2027 Super Bowl at SoFi Stadium next February, and — the big event — the 2028 L.A. Olympics.

By all accounts, the project is 99.6% complete — drivers in the LAX loop today can spot the people mover cars doing test runs on the tracks. But those last 0.4 percentage points are a nightmare. The last technical steps before its opening are things like safety and security testing. And also settling a very childish dispute between the airport and the contractors.

Obviously, the project missed the World Cup. Whether it will be operating in time for the Super Bowl is open to question. There’s even reason to doubt it will be ready for the Olympics. Meanwhile, its cost has ballooned from the original estimate of $1.95 billion to a projected $3.3 billion, at least.

That will make it considerably more expensive than such major projects as the UCLA Ronald Reagan Hospital, completed in 2004 for an inflation-adjusted $2 billion, or the Getty Center, which cost an inflation-adjusted $2.6 billion.

Those figures come from a report issued in June 2025 by the Los Angeles County grand jury (and expertly parsed by filmmaker Nick Andert on YouTube). The jury alleged that the construction consortium — LINXS, for “LAX Integrated Express Solution” — in effect held the project hostage by threatening delays in order to squeeze more money from Los Angeles World Airports, the city enterprise that owns and operates LAX. LINXS has a 30-year contract to design, build finance and operate the people mover once it’s finished.

Recently, the relationship has gotten worse. On July 9, the contractors sued the city for allegedly refusing to settle a construction dispute as a plot to subject the contractors to severe financial penalties from their lenders. As it happens, that’s the same stratagem the grand jury detected — except the jury blamed the contractors for exploiting the city’s desire to complete the project on time to force the city to agree to pay millions of dollars for disputed change orders.

On July 21, as my colleague Colleen Shalby has reported, the bond rating firm Fitch downgraded the project bonds to “junk” status (the second time they’ve sunk to that level). Fitch cited “existing discord” between the city and the contractors that could lead to further delays in the project and a default on the bonds.

The relationship has continued to deteriorate. On July 24, the city accused LINXS of eavesdropping on a confidential conversation between a city consultant and a city lawyer, ostensibly regarding the city’s litigation strategy. The privileged conversation, according to the city, provided gist for the LINXS lawsuit.

The city has asked the judge presiding over the case to bar two Chicago lawyers working for LINXS who it says were linked to the breach from appearing in the case. One of those lawyers even wrote a letter to LAWA admitting that a LINXS employee overheard the conversation and adding, a bit ominously, that LINXS had avoided putting all the details of the conversation into its lawsuit to avoid “embarrassing” the LAWA attorney. The Los Angeles County judge hasn’t yet ruled.

To understand how the people mover mushroomed in price, let’s start at the beginning. According to the grand jury, LAWA placed the project in the hands of blue-ribbon partners. Its contract with the project builders was drafted by the law firm Nossaman, whose expertise covered such public-private public works. The construction consortium was headed by Fluor Corp., a leading construction firm.

The consortium was tasked with designing, building and financing the project, and operating and maintaining the people mover for 25 years after its completion. The arrangement was aimed at minimizing the number and cost of change orders, which are the bane of construction projects. Neither Nossaman nor Fluor responded to my questions about their roles in the project.

“The Jury found no fraud, no corruption and no mismanagement,” the grand jury reported, nor any “nefarious villain that the Jury can recommend going after.”

Yet over time, the project incurred an astonishing $880 million in change orders, swamping the original $1.95-billion cost estimate.

So what went wrong?

(LAWA told me by email that it “does not intend to comment on matters related to private financing arrangements, lender discussions, contractual milestones, or rating agency decisions involving the LINXS consortium.”)

The grand jury pointed to the appointment of a “project neutral,” a mediator-like figure whose job, as the jury found, was to listen to both sides in a dispute and calculate how it would be resolved if it came to litigation — an outcome LAWA was desperate to avoid due to the likelihood that any lawsuits could delay the project by years. I couldn’t reach the project neutral, John C. O’Rourke Jr., a Chicago lawyer who has made this practice his specialty.

LAWA soon noticed that O’Rourke almost invariably sided with the contractors. But there was no provision in the contract to replace him if either side was dissatisfied — a flaw the jury blamed on Nossaman.

The first major dispute concerned building codes. The construction contract said the project had to comply with the city’s bridge code, but that was wrong. The right code was the seismic code. City officials communicated that to LINXS, but not in writing, so LINKS went ahead and designed it to meet the wrong code. LAWA’s position is that LINXS, as the designer and builder, should have figured out the right code itself.

LINXS asked for $143 million to change the specifications. The project neutral ruled that a lawsuit would yield $97 million. LAWA concluded that though it might win in court, a lawsuit would take so long that, in the jury’s words, it would “endanger the completion of the project.” So it paid the contractors $97 million.

That set a pattern.

LAWA reached an informal agreement with the city that permit applications for the people mover would get priority, with approvals to come within 20 days. The contractors, according to the grand jury, exploited this agreement to the hilt. City officials told the jury that LINXS overwhelmed them with permit submissions — “two-foot tall piles of documents” that couldn’t conceivably be reviewed in the time allowed.

Consequently, construction delays mounted, all transmogrified into change orders. If all these claims had to go to court, progress at LAX would grind to a halt. Pressure to move the project along mounted, and in 2024 LAWA agreed to settle the contractors’ claims for $550 million. Another $233 million in smaller change orders brought the total to $880 million.

In its lawsuit, LINXS turned this scenario around, accusing LAWA of pressuring the contractors into making concessions by “intentionally delaying or refusing to grant additional time to complete construction.”

While the overall project deadline is Dec. 8, the contractors face an even tighter schedule: They have to complete construction by Oct. 8, or their lenders may demand payment of their loans in full.

The lawsuit turns on what laypeople might consider a minor quibble: who is responsible for the equipment connecting the city Department of Water and Power’s electrical grid to the people mover. LINXS says it’s the city, and that when DWP workers opened an electrical cabinet to make some repairs, it put the cabinet out of commission for six months. It demanded a 141-day extension on its completion deadline.

LAWA refused, stating that whatever problems are in the equipment are LINXS’ to fix. So now they’re in court.

Over at Fitch, the feeling is that the project will almost certainly be finished in time for the Olympics, mostly because the consequences of missing that deadline are too horrible to contemplate.

But resorting to litigation rather than negotiating a settlement to this trivial dispute could open a new source of pain.

“When you go into the legal system,” says Seth Lehman, the Fitch analyst on the LNXS bonds, “it has a timeline of its own.”

Will that timeline allow the project to carry passengers coming for the Olympics? Place your bets now.