PORTLAND, Ore. (KOIN) — Although a portion of federal funding has been stripped from the I-5 Rose Quarter Improvement Project, Oregon transportation leaders have decided to move forward with the early stages of construction.

Phase 1A of the project, which entails stormwater improvements, bridge work and highway signage, is set to begin in August. The Oregon Transportation Commission discussed either advancing this phase or halting the project entirely and reassessing its budget during a meeting on Thursday, but members ultimately voted a pause could have adverse effects.

The Oregon Department of Transportation has estimated the project will cost about $2 billion in total.

Stakeholders were previously expecting a $450 million award from the U.S. Department of Transportation’s Reconnecting Communities and Neighborhoods Grant. But the passage of President Donald Trump’s Big, Beautiful Bill means unobligated federal funds will likely be rescinded.

ODOT’s Urban Mobility Office Director Tiffani Penson noted the decision could cause a funding reduction of $412 million — about 91% of the grant — for the project. On a state level, a bill that would have boosted the transportation department’s budget failed to pass before Oregon’s legislative session ended. Gov. Tina Kotek recently called for a special legislative session in response to the failed measure.

In the meantime, OTC Commissioner Alicia Chapman advised leaders to at least advance the first stage of the project with the funding that is available now. Phase 1A is estimated to cost about $65 million.

“The cost of not doing that: we’ll be sued for being out of compliance for our harbor agreement,” Chapman said. “We’ll be sued for all the contractors here that have incurred $4 million in bonds and hired all these people that could have been working on other jobs that have been standing by waiting for this to happen — because it’s supposed to go to construction in a couple weeks.”

Pausing the project would also cost transportation leaders “trust,” according to Chapman. She argued that business owners and other stakeholders who are impacted by ODOT’s decisions would no longer trust the department and could be hesitant to support future efforts.

The project in its entirety aims to improve safety and congestion on Interstate 5 between Interstates 84 and 40, and reconnect the lower portion of the Albina neighborhood to the rest of the city. Residents of the historically Black neighborhood were displaced with the initial construction of I-5 and Veterans Memorial Coliseum in the 1950s and 1960s.

During OTC’s public hearing, organization leaders — including James Posey of Portland’s National Association for the Advancement of Colored People — told commissioners that the project is about more than just brick and mortar.

“It involves the essence of how we belong in this state and whether or not we’re willing to make a sacrifice to see Black people be the citizens they need to be,” Posey said. “We’re equal participants. We’re all in this together and this particular project gave Black people a kind of essence of hope. Maybe we’re going to reconcile some of the historical harms that this state has done and continues to do in terms of how they treat Black people.”