NYC Gateway Tunnel Needs Federal Project-Rating Boost to Move Forward

(Bloomberg) -- Proponents of the Gateway tunnel in New York and New Jersey applauded the billions of dollars promised to mass transit in the $550 billion infrastructure bill, but urged federal officials to take steps to dedicate money for the project.

The Federal Transit Administration, which provides grants for local bus, subway and rail systems, has to complete its review of Gateway and assign a rating of “medium” or better in order for the project to move forward with funding, project officials said Tuesday at a board meeting.

The infrastructure law appropriates an additional $8 billion over five years to the FTA's Capital Investment Grant program, which includes Gateway on a list of priorities but still has the $12.4 billion project under review. 

The Partnership for New York City, the Association for a Better New York, the General Contractors Association of New York and other business groups urged the FTA to issue a higher rating. Gateway is crucial for Amtrak's Northeast Corridor, its busiest route, carrying more than 2,200 daily trains and stretching from Washington D.C. to Boston. 

“Gateway will help attract riders back to the public transit system, support the recovery of the tourism industry and encourage workers to return to the office,” Kathryn Wylde, president of the Partnership for New York City, said in prepared comments for the meeting. 

Brian Fritsch, campaign manager for Build Gateway Now, which represents civil, labor and business groups said the deal doesn't explicitly guarantee funding for the Gateway Program and that the FTA should submit an improved rating “as quickly as possible.” 

Breaking Ground

Officials broke ground in October on the first part of the Gateway project, to replace the Portal North Bridge across the Hackensack River in New Jersey. The bigger part of the project that remains under review by the FTA includes construction of a new commuter-rail tunnel under the Hudson River to Manhattan as well as replacement of the existing tunnel.

President Joe Biden and Transportation Secretary Pete Buttigieg have said Gateway is a priority. The project received long-delayed environmental clearance from U.S. officials in May. 

An FTA spokesperson said the project remains under review. Balpreet Grewal-Virk, the Gateway board's co-chair, told reporters after the meeting that she hoped to secure a rating “in the very near future” and full funding by the end of 2022. The project has an estimated completion date of 2035.

During a briefing with New York City Mayor Bill de Blasio on Tuesday, Senate Majority Leader Chuck Schumer of New York said the infrastructure bill will have money for Gateway. 

“I'm very confident now Gateway will move forward and get completed because of the dollars in this bill,” he said.

Amtrak, which owns the existing tunnel, recently acquired property in Manhattan for the project and is investigating the rock and soil characteristics, a step needed to move to the engineering phase, according to Steve Sigmund, Gateway's chief of public outreach. That work will continue through early 2022.

Amtrak, the Port Authority of New York and New Jersey, and both states detailed their financial commitments to the project in an August submission to the FTA, said Frank Sacr, interim executive director of the Gateway Program Development Corp.

Sacr highlighted other benefits of the infrastructure bill relevant to Gateway, including an additional $6 billion appropriated to Amtrak over five years. 

The infrastructure law also extends the maturity of certain loans with the U.S. Transportation Department to 75 years from 35 years, improving the annual affordability of major infrastructure projects, according to Gateway officials.

The bill also allows the proceeds of a federal loan to be used as the non-federal share of project costs, as long as repayment comes from non-federal funds. The Gateway project had stalled under the Trump administration amid debates over whether New Jersey and New York could borrow to finance their share of the project.

“We continue to do everything we can to move the project closer to the start of construction as quickly as possible,” said Steve Cohen, co-chair of the Gateway board. 

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