Home ARC Tunnel In Xanadu did Gov. Christie a state-supported pleasure-dome decree

In Xanadu did Gov. Christie a state-supported pleasure-dome decree

by Benjamin Kabak

When New Jersey Gov. Chris Christie killed the ARC Tunnel project, he did so in the name of fiscal responsibility. Cost overruns for the project, based on FTA estimates, could have ranged from $1-$5 billion, and while the FTA noted that better project oversight would have kept those costs within a reasonable range, Christie, to gain a name for himself, torpedoed a project that would have brought $4 billion in federal money to the state and provided for 44,000 jobs as well as faster rides for nearly every city-bound Jersey commuter. It was, needless to say, a big blow to the area’s transit progress.

Yesterday, we learned just how far the limits of Christie’s fiscal “responsibility” stretch. With a Super Bowl on tap for the Meadowlands in 2014 and an ugly hulk of colorful panels known as Xanadu sitting on the turnpike, unfinished and broke, Christie’s administration has promised $400 million in subsidies and tax breaks to Triple Five, the Mall of America owners, if they finish the project. The group will have to spend up to $2 billion to do so, will give the ugly structure a new outside and will call it American Dream@Meadowlands.

Transit advocates in New Jersey are feeling the sting. As TM Brown at Radials notes, Christie has made what is essentially a political decision to fund private development over a public works project. While the ARC Tunnel commitment could have been more substantial, it also promised more federal dollars and greater economic benefits for the state. “It seems,” he writes, “almost inappropriate in a time of forced and severe austerity for millions of Americans that Gov. Christie has decided to fund what amounts to a temple to profound consumption and, just a year before, defunded a project that would have improved life and finances for millions. Though if people are happy with the defunding of the ARC tunnel, they can always go skiing in Xanadu.”

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Douglas John Bowen April 29, 2011 - 11:48 am

This Jersey rail advocate concurs with Mr. Kabak over the imbalanced focus Gov. Christie has placed on funding priorities, please understand. The column, as such, is well thought out.

But it is a stretch, at best, to claim ARC “would have brought … faster rides for nearly every city-bound Jersey commuter.” Indeed, ARC’s cost escalation was nearly matched in the inverse by its deteriorating utility, a deterioration that included the elimination of direct (“one-seat-ride”) access to Midtown Manhattan from three (3) NJ Transit Bergen County Lines.

Bergen County, not coincidentally, is where bus ridership reliance (or “dependence”) is highest within the Garden State for access to the region’s core. So ARC’s very initial promise, for the most rail-starved segment of northern New Jersey, simply was not going to be met as the project’s scope was constantly refined and narrowed.

Adirondacker12800 April 29, 2011 - 12:48 pm

They could have built the loop to the former Erie lines later. Without ARC the people on the former Erie lines are still going to have to transfer at Secaucus onto over crowded trains.

Douglas John Bowen April 29, 2011 - 2:35 pm

That certainly may be the case until or unless Gateway Tunnel, or some other capacity expansion on the NEC, takes place. But your statement still begs a question: If access to/from Bergen County is presumed to be very important, why was a “loop” connection among the very first thing (on the Jersey side, at least) to be sacrificed?

Also, nitpicking, with apologies: ” … people on the former Erie lines are still going to have to transfer at Secaucus onto overcrowded trains” … IF they’re headed for Manhattan. NJ Transit (lack of) marketing plays down intrastate transfer options, to its own bottom-line detriment. Manhattan is a mighty market. But it is not, and should not be, the only market. Ask Metro-North.

Adirondacker April 29, 2011 - 7:12 pm

The trains on the upper level are overcrowded in either direction. Just like the second bridge over the Hackensack can be done as a separate project the loop can be done as a separate project.

Christopher Stephens April 29, 2011 - 12:19 pm

Time to let go, Benjamin. ARC died months ago, and while we know, oh how we know, this upset you, I think enough people posted replies that showed reasonable people could disagree about the decision. Your continued complaining about it is starting to resemble the sort of obsession usually reserved for birthers, or the sort of people think the 1960 presidential election was stolen (and no, it’s not even quaint enough to merit a comparison with people mourning the loss of the Dodgers to LA). Are you going to bring up ARC every time Governor Christie makes a budget-related decision? Please, focus your considerable talents on transit issues that are still current, and let go of the anger. You’ll be doing us all a favor.

Alon Levy April 29, 2011 - 1:34 pm

Let me say this as someone whose response to the cancellation was to post YouTube links to Celebration: Ben is right, and you are wrong. The many, many people who opposed ARC on grounds other than that it would get our name in the news and piss off liberals were against it because it was an overpriced boondoggle. I think it matters that this supposedly thrifty politician is all for boondoggles when they line up the pockets of big business that he likes, and do not allow him to grandstand. Worrying that a potential Presidential candidate grandstands for the sake of grandstanding while wasting money on everything that’s not a prime-time TV issue is normal; don’t compare it to birtherism.

Adirondacker April 29, 2011 - 7:14 pm

Extra capacity was needed in 1995. ARC for all it’s flaws was going to provide it. With the project canceled when is new capacity going to be available?

Alon Levy May 1, 2011 - 4:43 am

Meh. My point isn’t that ARC was bad. It’s that people like me opposed it on more specific grounds than “Trains bad, roads good,” and therefore would not think highly of Christie’s spending money on non-transit boondoggles.

Bolwerk April 29, 2011 - 2:03 pm

It’s not anger. It’s called due diligence. Highlighting transport/planning hypocrisy is about the most important thing anyone practicing journalism can do, and a blog about transit that ignores the subject isn’t worth reading. Hell, the subject is probably the most important state/local political issue there is. In 2013, the year Christie is up for reelection, New Jersey is likely going to be facing $5+ gas prices, crumbling infrastructure, even more stifling and expensive rail commutes, and maybe even budget deficits as bad as ever – and those problems are likely to be all the worse if Obama loses. A $13B ARC, even as crappy as ARC was, might well have been worth it. Voters should be reminded of who screwed them.

Christopher April 29, 2011 - 1:47 pm

Awww. I liked the colorful outside of the building. It will be sad when it’s just another brown faux stucco covered box.

Christopher Stephens April 29, 2011 - 2:17 pm

@Alon and @Bolwerk: you’re kind of proving my point. If every time a news item mentions the terms “Chris Christie” or “New Jersey”, your reaction is to go on and on about what a tragedy ARC was, that’s called obsession. And while it’s a free country and you’re entitled to your opinion, it’s also a little sad.

Benjamin Kabak April 29, 2011 - 2:20 pm

It isn’t as far-fetched as you think to equate Xanadu spending with ARC though. Xanadu is another Port Authority project, and the state built a rail line out to the Meadowlands due, in large part, to the presence of the shopping mail. That rail line was also to play a role in the ARC Tunnel.

This isn’t me saying “Christie is spending on education, therefore we want the ARC Tunnel.” This projects are linked.

Bolwerk April 29, 2011 - 3:04 pm

Eh, this is a transit blog, right? About the only relevant thing Chris Christie has done to transit long-term is cancel ARC. Okay, sure, he’s cut service and subsidies, but that’s fairly easily fixed. It’s perfectly legitimate to relate Christie’s spending hypocrisy back to his previous actions. His actions are worth watching, and it’s worth understanding his motives and the implications of his actions. It might be idle interest for me, but anybody in northern New Jersey who isn’t at least paying attention (what you call “obsessing”) to this is probably a twit.

Really, care to extend that logic? This blog about the Second Avenue Subway. I see 152 posts under the SAS category on the right. I see 42 about ARC and 15 about NJ Transit. If it’s pathetic to harp about Christie in subset of probably 57 posts, it must be really pathetic to read 152 posts about the SAS. If this were a blog about suburban malls, perhaps I would refrain from discussing transit on it (mostly because anybody on a blog about suubrban malls is probably semi-literate anyway).

Christopher April 30, 2011 - 12:06 am

The difference is that the SAS is an ongoing project (I see it ongoing every day as I walk the extra blocks to the Lexington Avenue subway). ARC is a project that died months ago. Using any announcement about government spending in New Jersey to bring up ARC? That’s what is pathetic. What’s next: “Christie cuts ribbon to new playground: ARC still not being built.”?

And, as an aside, there are actually several interesting and quite literate blogs about suburban malls out there, though none that I can think of that have much nice to say about them.

J B April 30, 2011 - 12:49 am

Xanada is not just any “government spending,” unless you think subsidizing private corporations is as legitimate a way to spend taxpayer’s money as improving transportation.

Bolwerk May 2, 2011 - 1:03 pm

Eh, Xanadu isn’t a mundane appropriation. From the sounds of it, its final price tag (assuming it gets built) will be in the billions. Pointing out that the guy who five months ago was grandstanding about saving taxpayers billions is, in fact, wasting billions is far from “pathetic.” I realize he’s not spending as much as ARC would have cost, but OTOH ARC at least had a chance of providing sustained long-term economic growth to NJ too.

Alon Levy May 1, 2011 - 3:48 am

Let me get this straight. You’re annoyed that people criticize Christie for canceling ARC because reasonable people could disagree about that decision. I reply that I was one of said reasonable people and I still think it’s telling that he’s funding Xanadu… and your response is to be annoyed I even mention ARC. Great.

TM Brown April 29, 2011 - 2:40 pm

It’s also about state funding in general. People are entitled to compare one project that was defunded to another one that was funded, that’s the whole point of budgetary side-by-sides. The fact that Xanadu is being buttressed by Port Authority money only acts as a ballast to that right. I’m sure Xanadu will provide some permanent jobs within the same area that ARC was but how many of those are going to be in non-value added sectors like retail? The point is that Christie funded a project with a modest-to-null economic impact on an area hit hard by the recession while —admittedly months ago— he pulled the plug on an astronomically expensive infrastructure project that had transformative potential in the name of the taxpayer and fiscal responsibility. Point being, we wouldn’t be here today if he had decided to spend that money somewhere else or kept the sweetheart deal out altogether and used it to reduce NJ’s debt burden.

Scott E April 29, 2011 - 3:36 pm

These two issues are completely unrelated, and to suggest that the $400 million invested in Xanadu could’ve better been put to cover the $1-5 billion needed to cover the ARC cost overrun is ludicrous. The magnitude is just too great.

Look, I was in favor of ARC, and was disappointed – even angry – when it was cancelled. But if the money isn’t there, it isn’t there, and seeing the overruns on every major infrastructure project (the latest being the Calatrava/WTC PATH station) I really can’t blame Christie on his pessimism towards the fate of this project.

I still hold out hope that we will somehow bring more rail service across the Hudson to Manhattan. Already since the cancellation of ARC, two proposals have come up: one involving Amtrak and the other involving the NYC Subway. There is a way to bring more people across the state line, and when it’s done, the costs will be shared proportionately. Christie, as governor of NJ, has to look not only at the benefit of the project, but the potential overall costs and the costs that are borne by his state.

Who knows — maybe Moynihan and East-Side-Access would eliminate the need for a station in Macy’s Basement. I haven’t studied it in all that much detail, but nobody really liked that stub-end station all that much anyway. It’s not that rail to NYC was a bad idea, it’s just that the design could have been better. And in a haste to get shovels in the ground and to get federal stimulus money, the design progressed without the proper foresight.

But this issue is about Xanadu. A property that sits on state land, that should be (but isn’t) paying any rent to the state in it’s current situation. It’s about a prominently visible (and yes, ugly) symbol of all that’s wrong in New Jersey development, one that the governor wants to make right. Maybe the money put toward Xanadu is meant to appease the financial concerns Bergen County after the state allowed it to lose its sports arena to Essex County (Newark), and likely to lose its racetrack altogether. But to suggest a link between Xanadu and ARC is a stretch.

Adirondacker April 29, 2011 - 7:17 pm

And in a haste to get shovels in the ground and to get federal stimulus money, the design progressed without the proper foresight.

They’ve been planning it for 30 years? How should they take? A century?

Christopher April 29, 2011 - 11:53 pm

They should have waited long enough to get the budget in place. I’ve wanted a big, flat-screen TV for years, but I’m waiting until I have enough money in the bank to pay for it before I go out and buy one.

Also, there was some talk that it was pushed forward too fast so that Corzine could claim a victory when he was slipping in the polls to Christie. So, yes, haste makes waste.

Marc Shepherd April 29, 2011 - 4:28 pm

Although Christie’s actions in cancelling ARC were disingenuous, so is Ben’s post.

Of the $400 million promised to Xanadu, half of it is sales tax revenue that the state will forgo. Today, New Jersey is collecting zero from Xanadu, because nothing is sold there. It is better to finish the project and collect something, than to let it lie fallow and collect nothing.

New Jersey’s actual expenditure on Xanadu, in the form of low-interest financing, is more than an order of magnitude less than what ARC would have cost, assuming ARC would have come in on budget, which practically no one believed it would. Unlike ARC, New Jersey is not contractually obligated to pay cost overruns for Xanadu.

Like ARC, Xanadu will bring jobs and investment to New Jersey. But in this case, the investments and benefits are much closer to even, and the risks to the state are far lower (really, close to zero). Independent of whether you think ARC was a good idea, you can evaluate this deal on its own merits, and see that it is good for the state.

Alon Levy May 1, 2011 - 4:28 am

People have been saying about sports stadiums what you’re saying about Xanadu for a couple decades, and they’re still net revenue drains. Megaprojects do not create jobs or sales tax revenue; they shift them to the megaproject site from nearby areas. To put things in perspective for you, even with obviously useful additions like high-speed rail there’s mixed evidence they create rather than merely shift economic activity; with a sports complex and a bunch of other buildings, the only people who get better off are the developers and the owners. If Christie wanted more commerce in the state rather than more megaprojects, he’d pressure local governments in the area to upzone and let small developers build things up piecemeal.

Bolwerk May 2, 2011 - 1:24 pm

At least as we Americans do it, transport has always been something of a net economic drain by itself. Do all those roads we have all over the place make money? Very few manage (NJTP?), and even they wouldn’t without being fed by other roads that don’t. Airlines maybe come kind of close to breaking even (in a scenario where kinda close means they still cost billions in public subsidies and forgone public investment to operate), but these days about the only kinda profitable land-based transportation is rail freight.

It’s fair to say that transport doesn’t net jobs, but it sure facilitates economic activity that cannot happen otherwise. Even ARC would have done that, now that we’re running up on the point where we just can’t squeeze many more people under/over the Hudson by rail or car. Xanadu, as an investment, is just terrible. Most jobs it will even make possible rank up there with burger flipper on the pay scale and in career prospects in a state where surviving on such an income means either being a pimply high schooler or getting stuck living a few to a room in a very bad part of town.

John Ruppert May 5, 2011 - 6:15 pm

This is an excellent point. Kudos. Distributing wealth toward the powerful through public investment in mega projects. Good call.

Sorry I have nothing major to add, I just really needed to agree here.

Chris April 29, 2011 - 5:05 pm

If at least part of Xanadu is up and running in 2013, highly visible and prosperous-appearing, vs. ARC which would have been a functionless, invisible hole in the ground even if 100% on schedule and budget, I think Christie will feel he made the right decision politically, and will probably be rewarded by the electorate if he’s not already working somewhere in Washington.

On another note, this project is certainly a boondoggle and a handout to private interests. But so was ARC fundamentally. “I’d like to own a big mall and I’d like some other folks to help pay for it” is basically the same ultimate motivation as “I’d like to ride a train/have great accessibility to property I own and I’d like some other folks to help pay for it”. I’d like to see Christie push back against all those claims on the public treasury but at least the scale of this spending is much smaller.

Bolwerk May 2, 2011 - 1:27 pm

ARC actually would have been beneficial to much of northern NJ and the state economy as a whole. Xanadu will provide some crappy jobs and might mean some suburbanites don’t have to drive as far for medium-quality consumer goods.

And if votes in New Jersey reward Christie in 2013, they’re dumber than I thought.

Donald April 29, 2011 - 7:19 pm

This morning I watied nearly half an hour for a jam packed NJ Transit bus. Thanks Chrisite. Now that the state will be losing millions of dolalrs as a result of the Xanadu subsidies, I guess I can look forward to even more service cuts. The buses will be so crowded, people will have to ride on the roof like they do in 3rd world countries.

Tsuyoshi May 1, 2011 - 8:03 pm

It strikes me that they went to all the trouble of building a rail line there, but there does not seem to be enough demand for commercial development there – perhaps New Jersey has plenty of malls already, or perhaps it is too inaccessible to existing development to be a prime commercial destination. They should investigate residential development instead. It could be an excellent site for something similar to Downtown Jersey City.


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