Second Ave. Sagas

ARC Fallout: Disputed paybacks and new rolling stock

Written by

Benjamin Kabak

in

The deep-cavern ARC terminal was one of many project flaws. (Click to enlarge)

Now that New Jersey Gov. Chris Christie has hired the high-powered Patton Boggs law firm (at a rate of $485 an hour, no less) to fight the federal government’s request for the return of the ARC money, the leaks are coming out about what the state knew and when it knew it. The Associated Press reported earlier this week that Christie was well aware he’d have to return the money if the project went forward. Essentially, it was written into the contract between the feds and the state.

As I mentioned in a comment a few weeks ago, the Early System Work Agreement requires a refund. It reads, “If an applicant does not carry out the project for reasons within the control of the applicant, the applicant shall repay all government payments made under the work agreement plus reasonable interest and penalty charges the Secretary establishes in the agreement.”

FTA officials have reiterated this stance in various statements to the press.”Gov. Christie’s decision to renege on that contract and abandon the project is what now requires us to insist on the return of federal funds expended under the ESWA,” FTA Administrator Peter Rogoff said. This is codified at law as 49 U.S.C. § 5309(g)(3)(B)(iv).

Christie, meanwhile, continues to dispute this claim and alleges that the federal government is only selectively enforcing the refund provision. “We don’t think we have to pay any of that money back because, in fact, the Obama administration and previous administrations have selectively enforced when they asked for the money back,” the governor said last week. “And I’m not going to allow them to say, ‘Hey, New Jersey has a Republican governor, so we’ll get the money back from them, so states where we have Democratic governors, we don’t ask for the money back.”

As the AP noted, though, the Rochester project which Christie has cited more than once relied on a different funding mechanism. New Jersey pushed for an Early System Work Agreement in January, and it’s going to have to live with that choice even if it means refunding the feds a few hundred million. That’s just contract law.

Meanwhile, New Jersey does have some flexibility with regards to its own ARC dollars. To that end, New Jersey Transit is seeking to reallocate $75 million in ARC money to go toward new rolling stock. The agency has asked the North Jersey Transportation Planning Authority for permission to purchase 100 additional bi-level cars as it engages in system-wide upgrades. That move should be met with far less resistance.

Comments

19 responses to “ARC Fallout: Disputed paybacks and new rolling stock”

  1. Gary Wong

    Christie is such a clown. Regardless of whether the feds are selectively enforcing the refund provision, it’s a contract that NJ agreed to and have to honor when asked to to repay.

    Reply
    1. Meese

      I think he’s trying to delay payment long enough so that the next guy deals with it.

      Reply
    2. petey

      “at a rate of $485 an hour”

      it’s so good to have fiscally responsible rightwingers in control, who will not spend public money fighting pissily against clear contractual obligation.

      Reply
      1. Eric F.

        Whenever anyone says “there should be a law/regulation about” whatever it is they are momentraily outraged about, keep in mind that at some point people will be paid about that much to interpret, ensure compliance with and otherwise administer said law/regulation. All those multi-thousand page laws being passed the last couple years are a resounding source of redistribution from those who create value to those who went to law school. Just sayin’.

        $485 is low by big firm standards. Shocking but true. And if NJ can spend 6 or 7 figures to avoid spending 9 figures, I think it’s a good investment.

        Reply
        1. petey

          never give up, eric, never give up.

          Reply
        2. Bolwerk

          That’s a pretty big if right there.

          Reply
  2. Al D

    Looking at the accompanying schematic, ARC is a completely, independent station, in no way connected to Penn except for very limited corridor access. What was the point of doing this? Instead, I agree more now that this project should then be NJT ESA connecting to Grand Central as well. It’s an entirely separate line.

    Reply
    1. Marc Shepherd

      The ARC station would actually have been better located than Penn Station, and would have had better subway connections. The corridor connections to Penn clearly had to exist, but they were not very important, because not many passengers use Penn to connect from one heavy rail service to another.

      There were other, more serious flaws in the design. The fact that the station was north and east of the existing Penn Station, with several corridors connecting the two, was not particularly problematic.

      Reply
      1. Al D

        I think that’s partly the point for me. If it’s a separate station entirely, a separate line, then why is it aligned with Penn? It perhaps could be under 5th and 6th Ave for example, a more central point, or then extended to Grand Central.

        What are the more serious flaws that you refer to?

        Reply
        1. Eric F.

          It is better positioned, in terms of lattitude and longitude, than Penn Station, in that it’s further east by a block than Penn. Presumably, just about everybody using the thing will come in and out on that bidg staircase shown on the right side of the diagram. The problem is that it’s not all that much better positioned than Penn, just gaining you one block, AND it’s 150 feet (or whatever it’s supposed to be) underground.

          That said, it is a vastly preferrable alternative to nothing, which is what we’ll get in the absence of its construction.

          Reply
        2. Marc Shepherd

          Unless the line can go all the way to Grand Central, an extension to Fifth Avenue does relatively little good, since there is no subway there. By putting the station at Herald Square with a corridor connection to Penn, there would be connections to the Eighth, Seventh, Sixth Avenue, and Broadway subways, which is about as good as you can get without going to the east side.

          In addition, although heavy rail transfers at Penn Station aren’t common, they do exist, and you wouldn’t want a design where that possibility was completely precluded.

          The problem with ARC was that it didn’t help Amtrak. If you figure that a project of that magnitude is a once-in-a-century opportunity, a design that ignores Amtrak’s long-term needs is pretty short-sighted.

          Reply
          1. Eric F.

            Getting to 5th would not be so bad. It would facilitate access to jobs by making the walking distance shorter. Plus, you’d want some sort of corridor (i) back to the high-capacity 6th avenue lines I would think and maybe (ii) to the 6 train stop on 33rd.

            I wonder how that ARC line could ever be extended to GCT though. How could you get the trains to make a 90 degree left turn up to 42nd street?

            Reply
            1. John

              Lots of eminent domain actions — any connection from the Penn Station area to Grand Central wouldn’t require a high-speed curve — the trains just aren’t going to get up that much speed for a 3/4-mile trip — but the tunnel link would have to go under at least 1-2 buildings in order to handle the length of your average passenger rail car and engine.

              However, there are already a number of locations where subway tunnels either cut under the corners of buildings (mainly on the IND) or bisect building basements entirely (the 4/5/6 under the Grand Hyatt at Grand Central and the R under No. 1 Broadway being two of the most obvious examples). So it would be possible to cut under buildings to create the line — the bigger problem would likely be threading the needle between the No. 7 tunnels and the shuttle tunnel on 42nd Street, if the connection wanted to use the Grand Central loop track and the lower level platforms, instead of creating an entirely new ‘deep cavern’ station, as the MTA is doing with the new LIRR terminal.

              Reply
      2. John Paul N.

        NJT would have used both the existing Penn Station and the ARC station. Isn’t that an issue when boarding from NYC?

        Reply
        1. Eric F.

          Won’t LIRR people have that same issue in 150 years when east side access is done? Presumably, they’ll be a set schedule for each station.

          Reply
  3. Eric F.

    Is there really any doubt that this provision is being selectively enforced?

    My point, if I were NJ’s attorneys would be that costs increased due to factors beyond the control of NJ. I don’t think there is a serious counterargument against that assertion.

    Is that the actual facts on the bi-level train cars? I thought that these cars were already on order, and that the request being made is to apply $75 mm or ARC funding to them. This post makes it sound like an order for the cars will be made if permission is granted, but that’s not how other stories I have seen framed the train car order.

    Reply
  4. JAzumah

    Lawyers typically charge government $700-900 per hour. $485 is very very cheap. Christie is probably going all the way back to the HOV lanes for I-80. When they were converted to regular lanes, NJ was not forced to repay it.

    Reply
    1. Scott E

      That’s different. The HOV lanes were built (in part or in full, not sure) using federal money to help curb air pollution. Then Gov. Christie Whitman demonstrated that, after being built, the HOV lanes did not serve their purpose of encouraging carpooling, reducing traffic, and reducing emissions, so they were converted to general use – which did reduce traffic and therefore emissions. I don’t see how Gov. Chris Christie can demonstrate anything even comparable.

      Reply
  5. As the ARC turns: money for nothing :: Second Ave. Sagas

    […] involved in a dispute over the ARC Tunnel funding, the federal government had leaked word that Gov. Chris Christie knew he would have to return the federal money, and Christie was still going forward with plans to challenge the refund request. In an effort to […]

    Reply

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