search

The Real Deal Logo

Trending

Housing deal finally passes; here are the detailsHousing deal finally passes; here are the detailsLawmakers reach sweeping housing deal with “good cause eviction,” new 421aLawmakers reach sweeping housing deal with “good cause eviction,” new 421aDevelopers have a new tax break. Now they must figure it outDevelopers have a new tax break. Now they must figure it outClipper losing tenants that occupy 93% of 250 LivingstonClipper losing tenants that occupy 93% of 250 Livingston
New York

Gateway tunnel pushed back again

Transit project to take three years longer, cost $2B more than thought

From left: Governor of New York Kathy Hochul and Governor of New Jersey Phil Murphy (Photo Illustration by Steven Dilakian for The Real Deal with Getty Images and Gateway Program)
From left: Governor of New York Kathy Hochul and Governor of New Jersey Phil Murphy (Photo Illustration by Steven Dilakian for The Real Deal with Getty Images and Gateway Program)

The Gateway train tunnel is further away from arriving at Penn Station than previously thought.

The commission that is managing construction of the planned passenger conduit revealed more delays and cost increases on Wednesday, the New York Times reported. The news pushes completion of the tunnel, to connect New Jersey and Midtown, back about three years.

The tunnel is now expected in 2035 — bad news for Vornado Realty Trust and other office property owners around Penn Station, not to mention for the New York metro area economy as a whole. The commission also said that the existing two-way tunnel, which will close for repairs when the new one opens, won’t be fixed until 2038.

Should either tube of the old tunnel fail before the Gateway tunnel one is ready, it would severely reduce passenger rail access to the city from New Jersey and Washington, D.C.

Read more

Expenses are also growing. The tunnel, which is part of a larger Gateway project, is now estimated to cost $16.1 billion, $2 billion more than recent estimates. Half of that jump is being attributed to inflation.

Sign Up for the undefined Newsletter

The cost difference may be made up in part by funding from the recent federal infrastructure bill. The rest will be split between New York, New Jersey and the federal government.

Both New York Gov. Kathy Hochul and New Jersey Gov. Phil Murphy put a positive spin on the new cost analysis, calling it a step forward in the long-awaited transit project. The 4.5-mile rail project will carry travelers under the New Jersey Palisades, the Hudson River and Hudson Yards.

A similar project to connect New York and New Jersey, called Access to the Region’s Core, or ARC, was killed by former New Jersey Gov. Chris Christie after construction had already begun. The governor said his state would have been on the hook for inevitable cost overruns. ARC was set to be completed in 2018.

Its successor, Gateway, stalled when Donald Trump won the presidency and withdrew a commitment to the project made by the Obama administration. Last year, however, under President Joe Biden, federal officials completed their environmental review of the project, allowing it to proceed.

The Gateway project is being overseen by Amtrak along with the New York and New Jersey governments. It aims to secure and then double passenger rail capacity between the two states.

— Holden Walter-Warner

Tags
DevelopmentInfrastructurePublic TransitWest Side Rail Yards