Category: ARC Tunnel

It’s been over two months since New Jersey Gov. Chris Christie pulled the plug on the ARC Tunnel project, and the fallout from his decision is still raining down upon the region. While the 7 line extension to Secaucus made headlines in mid-November, all has been quite on the cross-Hudson front. Still, the problems ARC was designed to address and the problems that plagued the ARC project live on.

Two stories — one grander than the other — kept the ARC tunnel in the news this week. First, The Post’s editorial board used the MTA Inspector General’s report on the MTA’s construction cost overruns as proof that canceling ARC was the right idea. Their logic is spurious at best.

“You can’t blame New Jersey Gov. Chris Christie if he feels some satisfaction over news out of the MTA,” Alexander Hamilton’s former paper said. “A new report by Inspector General Barry Kluger found that the transit agency’s major development projects — the Second Avenue subway, the LIRR link and the Fulton Transit Center — are five years late and $2 billion over budget. But they’re all too far along for MTA Chairman Jay Walder to kill them. Which is precisely what Christie did to the Hudson River commuter tunnel, before it slipped into the overrun abyss.”

The Post claims that the problems plaguing the MTA — “lack of oversight and bureaucratic infighting” — are the same as those that would have descended on ARC, and because of those concerns, Christie was right to cancel the project. To me, it would have made far more sense for Christie to address those two concerns and figure out a way to bring the project under budget before killing it. He chose not to tackle those problems, and the way he made his decision should not be applauded.

Meanwhile, the problems ARC was designed to address are alive and kicking. Penn Station has not turned into a panacea of through trains, and the crowded rail hub is facing capacity concerns. As part of an ongoing series detailing concerns about our region’s aging transportation infrastructure, Andrew Grossman of the Wall Street Journal went in depth into the Penn Station problems. He writes:

NJ Transit, LIRR and Amtrak must get 170 trains loaded on 21 platforms in four hours, moving more than 120,000 commuters and long-haul travelers out of Manhattan. It is the nation’s busiest station. If all goes according to plan, a train opens its doors on a platform every 60 to 90 seconds, picking up or dropping off about 900 passengers—the equivalent of two full Boeing 747s.

In 2010, 6% of peak-period NJ Transit trains were late through November, with delays more common on most of the lines that run in and out of Penn. Sometimes the failures are catastrophic and perhaps unavoidable, as following the late-December snowstorm that delayed scores of trains for days. But other delays—malfunctioning signals, overhead wires knocked down by trees that the railroad can’t afford to trim—can be chalked up to factors like human error, poor planning or a lack of funding.

Penn Station is one of many choke points in the aging transit system moving people around metro New York. In an era defined by states’ austerity and tapped-out transit authorities, much of the fundamental infrastructure is outdated and overcrowded. And there’s little prospect of it getting much better without politically unpalatable steps being taken, such as higher fares and tolls or a major reallocation of taxpayer dollars.

All of the trains arriving and departing Penn Station, which opened a century ago, come from two tracks toward New Jersey and four tracks toward Long Island. All must arrive on one of the 21 tracks, but many trains can’t fit on some tracks with shorter platforms. By contrast, Grand Central has 46 tracks—and far fewer delays.

A late Amtrak train impacts a New Jersey Transit train which impacts a Long Island Rail Road train which impacts an Amtrak train. It is a problem that many had hoped ARC would solve and now, as Grossman notes, transportation planners are “scrambling” to find better solutions. New Jersey Transit is at the mercy of Amtrak, but the MTA is trying anything it can find to improve the situation.

The authority, says Grossman, “is investigating whether it can run trains through Penn and into New Jersey, shaving precious minutes off the amount of time each spends on a platform, freeing up some capacity. It’s also looking at running some Metro-North trains into Penn once a project to provide LIRR access into Grand Central Terminal is finished.”

Eventually, something is going to have to give. New Jersey and New York will have to figure out a way to work together to address the region’s cross-Hudson rail capacity concerns. The two states will have to work hard to keep costs on the ARC successor project to a reasonable level and will have to battle overruns. The economic impact of planning and building nothing is too severe for us to wait much longer.

When last we heard from the various parties 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 reach an amicable solution with the great state of New Jersey, Secretary of Transportation Ray LaHood has promised to give New Jersey back around half of the $271 million it owes as long as it returns the money first.

There’s a catch though: Sen. Frank Lautenberg arranged this offer with the FTA, and Lautenberg and Christie are, on no uncertain terms, bitter enemies. Thus, while LaHood has extended the offer only to the state’s Senators so far, Christie hadn’t committed to it until he personally has his offer in hand. By the weekend, he had changed his tune. “The offer was a nice start,” he said.

The letter, obtained by NorthJersey.com and available here as a PDF, explains why the feds need the money back. Essentially, the Early Systems Work Agreement is a contract, and the money can go toward only the project under consideration. The state will have to return the money to the feds, and the feds will grant it back to the state under less onerous terms.

In his letter, LaHood dispelled many of Christie’s claims concerning the enforcement of the contractual ESWA refund provisions. He wrote:

In the history of the FTA’s New Starts program, there have only been five Early Systems Work Agreements (ESWAs) executed for projects like ARC. The New Jersey Transit ARC project is the first, and only one, of those five projects in which the sponsor abandoned the project after receiving an ESWA. All projects under the earlier ESWAs have been completed or are well along in construction. Specifically, the Seattle “LINK” light rail, the New Orleans Canal streetcar, and the Salt Lake City-Weber commuter rail project are in operation. The New York City Second Avenue Subway, Phase One, is now under construction.

The Federal Transit Administration (FTA) is required by Federal statute, 49 U.S.C. § 5309(g)(3)(B)(iv), to obtain repayment of Federal financial assistance expended under the ARC ESWA. Governor Christie was informed by the U.S. Department of Transportation officials that if the state of New Jersey failed to live up to its final commitments to the ARC project, as spelled out n the ESWA, New Jersey would have to repay the Federal funds awarded under the ESWA.

The FTA is being fair and equitable in its treatment of New Jersey (NJ) Transit. The FTA is not seeking repayment from NJ Transit of funds expended for Alternative Analysis, Preliminary Engineering, and environmental analysis totaling more than $22 million. The FTA is seeking repayment only of the funds expended under the ESWA.

However, should NJ Tranist fulfill its obligations under the law and repay the $271 million, DOT will transfer $128 million back into the State of New Jersey’s Congestion Mitigation Air Quality (CMAQ) account to replenish the CMAQ funds originally expended in this project for future use for other eligible projects.

And so the stage is set. The federal government has made it clear what Christie’s and New Jersey’s obligations are under the governing law, and the FTA has made a more than generous offer to a state that is effectively trying to hold it hostage. Christie should accept the grant, and the state should begin new efforts to identify a solution to its trans-Hudson rail travel woes.

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.

While it sounds as though the $3 billion in federal money that was to go to the ARC Tunnel is slowly slipping away from the northeast, a group of New York House representatives have written to Transportation Secretary Ray LaHood formally requesting the money be transferred to New York. The lawmakers — Carolyn Maloney, Jerrold Nadler, Peter King, Gregory Meeks, José Serrano, Paul Tonko, Bill Owens, Nita Lowey, Edolphus Towns, and Steve Israel — have asked for federal support for the Second Ave. Subway, the East Side Access project, Moynihan Station and high-speed rail initiatives.

The money, they say, should remain in the northeast, and since New York City leads the nation in transit riders, it is only natural for the funds to boost federally-qualifying projects. “In a region with strong patterns of mass transit use, coupled with a serious lack of capacity, the taxpayers of this nation can rest assured that federal transportation dollars redirected to projects in our area will be put to good use,” the letter says.

As the fallout from Gov. Chris Christie’s decision to cancel the ARC project has continued, the city has jockeyed for the funds. Recently, Mayor Michael Bloomberg proposed to extend the 7 line from 11th Ave. and 34th St. under the Hudson River to Secaucus, New Jersey. He had hoped to secure federal funding for this project, but sources said that LaHood was considering redistributing the money to other eligible New Starts projects. This letter then might just be a last-gaps effort to keep this money in the area.

“We believe,” it says, “that it makes sense to keep the New Jersey transportation funds in this region to help address our area’s severe and growing transportation needs. We have great projects underway that can make effective use of the funding.”

After the jump, read the full text of the letter. (more…)