For Gov. Chris Christie, pulling the plug on the ARC Tunnel was a matter of economics. According to ARC Executive Steering Committee estimates, the project will cost between $3-$5 billion more than anticipated, and without massive tax increase, New Jersey cannot pay for any potential cost overruns. “The ARC project costs far more than New Jersey taxpayers can afford and the only prudent move is to end this project,” he said this afternoon.
The information upon which Christie based his decision on the project came from a three-page memo put forth by the heads of the agencies overseeing the project. The memo — embedded after the jump and available here — discusses the rising costs of the project. Although no one conducted a line-by-line analysis of the budget, the FTA believes the final costs could be as much as $13.7 million, and New Jersey Transit anticipates overruns of at least $1.3 billion.
For a project that started out with a $4.3 billion price tag in late 2003, the ballooning costs forecasted its end. “The Committee fully recognizes the value and benefit of a cross Hudson transportation improvement would bring to New Jersey’s transportation system and the entire region,” the report says. “The Committee also understands that this action may result in the loss of $3 billion in discretionary federal New Starts money. Nonetheless, it is the judgment of the Committee that in the current economic climate, New Jersey and its project partners cannot afford this project and recommend its immediate and orderly shutdown.”
By closing up shop, Gov. Christie will see around $478 million flushed down the drain. The state believes it can recover some of this money already spent on construction, but the job losses today and in the future will sting. While Ray LaHood, the current Secretary of Transportation, plans to meet with Christie tomorrow, the immediate future for the ARC Tunnel looks bad.
Meanwhile, advocates for the project are dismayed. The Regional Plan Association slammed Christie for basing his decision off of unofficial cost estimates and fears that twenty years of progress on a badly-needed river crossing will go up in smoke. “The decision to cancel ARC is an enormous disappointment,” Bob Yaro, RPA president, said. “ARC was desperately needed by the residents of New Jersey who now face limited access to the most lucrative job market in the nation, less reliable commutes and more congested roadways at the Hudson River crossings for the next generation.”
Another RPA official noted that, despite the cost increases, New Jersey would see nearly unprecedented economic growth by completed this project. “With the 70,000 additional daily riders who would have used ARC, New Jersey would be more connected to New York City and the expanding global economy, companies and workers would continue locating in the Garden State, home construction would pick up, and the value of homes near transit stations would rise by an estimated $18 billion,” RPA Executive Director Tom Wright said. “All of this has been jeopardized by this decision.”
Yet, some advocates have highlighted the silver lining in Christie’s cloud. The ARC Tunnel, while badly needed, is not an ideal project. It doesn’t allow for Amtrak expansion and would require a new station cavern buried deep below 34th St. with no direct connection to Penn Station. The NJ ARP’s 2005 statement explores these issues further, and Christie’s decision to halt the project now could allow for these design flaws to be corrected in the future.
At some point not too far from now, the New York/New Jersey region will have to figure out how to improve rail crossings under the Hudson River. The ARC Tunnel, twenty years in the making, would have begun to solve our region’s transportation projects, and this setback, while major, shouldn’t mark the end of those efforts. Today is a sad day, but it shouldn’t be the end of this project by any means.
After the jump, read the memo from the ARC Executive Steering Committee torpedoing the project.