Could Project Impact TZ Commuter Rail? New $25 Billion Gateway Tunnel Proposal Garners Initial Support from NY-NJ Pols

TARRYTOWN—Construction work continues in earnest on the $3.9-billion new Tappan Zee Bridge project. A key future component of the new bridge will be enhanced mass transit either in the form of bus rapid transit or commuter rail.

The commuter rail component to bring a one-seat ride to West of Hudson commuters to Grand Central Station is at least being considered as part of a long-range plan to improve mass transit in the lower Hudson Valley. However, the fact that the addition of commuter rail would add billions of dollars to the new bridge project caused federal and state transportation stakeholders to forego further study on commuter rail so that the new bridge construction project could move forward.

A controversial plan by Amtrak that at full build-out would provide a one-seat ride to Penn Station, not Grand Central, has been given new life by U.S. Sen. Charles Schumer. While the project is still a ways off from breaking ground, if the Gateway tunnel project does move forward it prompts the question whether this $25-billion project could jeopardize the $4-billion commuter rail project on the new Tappan Zee Bridge.

The ambitious Amtrak Gateway tunnel project earlier this month seemed in deep peril, prompting U.S. Transportation Sec. Anthony Foxx to request a meeting with New York Gov. Andrew Cuomo and New Jersey Gov. Chris Christie to find common ground to get the multi-billion dollar venture back on track.

However, Sen. Charles Schumer in a speech on Monday, Aug. 10 in Manhattan and later in the week at a press conference at the Metro North train station in Middletown in Orange County appears to have sparked new interest in the project that could cost between $20 billion to $25 billion to build. The project could also address at least part of the demand that would be serviced by commuter rail built in future years on the new Tappan Zee Bridge.

New York State’s senior senator introduced a plan that would not only replace the two aging tunnels that transport New Jersey commuters under the Hudson River and into Manhattan, but would also provide for what has now been an elusive dream to create a “one seat ride” for New York City commuters who reside in West of the Hudson communities in Rockland and Orange counties. That one seat ride was envisioned as part of the failed Access to the Region’s Core or ARC tunnel project that was killed by Gov. Chris Christie in 2010 over who would pay for project cost overruns. Gov. Cuomo recently stated in a letter to Sec. Foxx that the federal government needed to provide more than just low-interest loans if the Gateway project was to move forward.

In his speech in New York City and again in Middletown earlier this month, Sen. Schumer called for the establishment of a Gateway Development Corporation, a collaborative partnership that would bring together stakeholders such as the states of New York and New Jersey, Amtrak, the Metropolitan Transportation Authority (MTA), NJ Transit and the Port Authority, in an effort to get the Gateway Project moving forward, beginning with the construction of two new Hudson River tunnel tubes. Sen. Schumer said that the creation of this development corporation is the first step in making the Gateway project a reality, which will replace two existing tunnels under the Hudson River and ultimately double cross-Hudson train capacity to New York City.

He said the creation of the development corporation would bring all of the affected entities under one umbrella to more efficiently access and leverage federal and state resources necessary to advance the project.

The cost of the two new tunnel tubes is estimated at between $10 billion to $14 billon and the broader Gateway plan, which includes the estimated $800-million Secaucus Loop, is estimated to cost anywhere from $20 billion to $25 billion. Sen. Schumer maintained that because Amtrak cannot access federal mass transit funding and the Port Authority and regional transit agencies cannot access federal railroad dollars, each entity should be given a seat at the table and organize under a non-profit that can add up several pieces of financing, with an eye toward getting the maximum amount possible from the federal government.

“We are fast approaching a regional transportation Armageddon—the busiest rail lines in the country will soon be stranded without a way into New York City, which could be devastating not only for commerce, but our commuters. That is why we should create a new Gateway Development Corporation in which all the players—from New York and New Jersey and from Amtrak and the federal government—can get together, plan and design this must-build project and pull down every available source of public and private funding to make it possible,” Sen. Schumer said.

He continued, “Funding the Gateway project would not only ensure we can build the tunnels necessary to keeping New York State, and our nation’s economic center, functioning, but it would also pave the way to creating the one-seat ride Orange and Rockland County commuters have been begging for year after year,” said Schumer. “Providing a way for our West-of-the-Hudson commuters to get to New York City without having to transfer trains has the potential to completely revolutionize commuting and spur an incredible level of economic development. That is why I am fighting to make sure we are taking critical steps now that we will need later on to make this project a reality.”

In addition to the replacement of the xisting Hudson River tunnels that were damaged during Hurricane Sandy, the project would also involve the construction of the Secaucus Loop that would facilitate the “one seat ride” to Penn Station for Rockland and Orange county commuters. The existing Hudson River tunnel tubes, built between 1904 and 1908, are a few years away from being considered structurally unsound, the Senator charged.

Initial reaction to Sen. Schumer’s plan has been positive. For example, Amtrak President and CEO Joe Boardman called the formation of the development corporation “a good idea.’’

“We agree that starting work on Gateway, including building a new tunnel under the Hudson River, is of the utmost urgency to both the region and the entire Northeast Corridor,’’ Boardman stated in a published report. “To do that, we need to develop a true partnership between Amtrak, the states and their transit agencies, and the federal government as soon as possible.’’

New York Gov. Cuomo said, “I commend Sen. Schumer for making these tunnels a national priority. We both agree that they will require significant federal investment and I look forward to working with him to move this critical project forward.”

Gov. Christie has not released a statement on Sen. Schumer’s proposal except to defend his decision to scuttle the former ARC tunnel project due to the project’s cost and impact on New Jersey.

In a statement released by Christie spokesperson Nicole Sizemore to the New York Observer, the governor and Republican Presidential candidate stated, “It’s easy for Sen. Schumer to make these claims when New York wasn’t contributing a dime to the ARC project and didn’t step up to take on any of the cost of the project’s overruns. As Amtrak reiterated in testimony yesterday, the ARC and Gateway plans are two entirely different projects,” Sizemore stated. “The completion of ARC would have done nothing to resolve the issues we’re still facing with Amtrak’s tunnels today. Nonetheless, the Governor has repeatedly made clear that the federal government and the state of New York must be equally committed to a fair funding solution for any project to move forward.”

Ross Pepe, president of the Construction Industry Council of Westchester & Hudson Valley, Inc. said in response to Sen. Schumer’s Gateway tunnel proposal, “The rail transportation system in the Northeast particularly here in the New Jersey/New York corridor is in crisis status. Regular breakdowns cost users, taxpayers and businesses millions of dollars in lost productivity that every month are grave threats to the region’s economy. Sen. Schumer has his eye on the ball in calling for a Federal/States solution to finance and deliver modern Amtrak/NJ transit services soon.”

Orange County Executive Steve Neuhaus said of Sen. Schumer’s plan to revive the Gateway project, “I strongly support a one-seat ride to New York City. The more transit opportunities that Orange County residents have, the better, whether it be the (new) Tappan Zee Bridge, the one-seat ride (via the Gateway project), or both. Orange County continues to grow and we should make commuting as easy as we can for our hard-working residents.”

Al Samuels, president of the Rockland Business Association, said that while the “one-seat ride” to Penn Station that would be available via the Gateway project would be beneficial to some Rockland County residents, he charged that prior studies have shown that a majority of people that commute from this area work on the East Side of Manhattan and therefore Grand Central is a better terminus for them.

“We have found that a majority of the people from the West Bank of the Hudson who work in the city need to go to the east side of the island, not Penn Station,” Samuels said. “Will traveling to Penn Station be better than what they have now, perhaps, it certainly works for a number of people and it includes New Jersey and maybe that is a good thing for the region. But, I still feel that there is a need for a ‘one seat ride’ into Grand Central.”

However, he stressed the need for a two-way commuter solution that would take commuters to New York City and bring commuters from the city to Rockland and Orange counties.

“The main focus for me as the head of the Rockland Business Association and as a member of the Mid-Hudson Regional Economic Development Council is to advocate for transportation that will bring workforce into our region,” Mr. Samuels added. “As a result, I am a strong advocate for a one-seat, dual track component whether it comes through the Gateway project or is attached to the Tappan Zee Bridge.”

Prior to Sen. Schumer’s proposal, the governors of New York and New Jersey spurned a call by Transportation Sec. Foxx to have a meeting to discuss the Gateway project and the urgent need to repair the two existing trans Hudson tunnels.

Gov. Cuomo in an Aug. 7th letter to Sec. Foxx said that he welcomed the federal government’s interest in the project that would construct a new rail tunnel under the Hudson River, but criticized the absence of federal financing for the project. “Since these tunnels are Amtrak facilities, and since federal law and regulations require Amtrak to maintain its assets—including the Hudson River tunnels—in a state of good repair, substantial federal funding needs to be and should be available for this, Gov.Cuomo stated.

He continued in his letter, “After many discussions by all parties, it appears that, at the end of the day your Department is only offering a loan to build the tunnel and the loan calls for debt service payments due in year six of an estimated 12-year construction schedule with literally no grant or direct funding support from Amtrak or the federal government. This is not viable. The Port (Authority) and the states cannot shoulder this massive financial burden.”

John Jordan
Editor, Real Estate In-Depth