Tunnel vision? DOT withdraws from Gateway program in blow to $24B project

Federal agency claims it wants to avoid partiality

Elaine Chao and tracks inside the LIRR storage facility in Hudson Yards (Credit: Alistair Gardiner for <em>The Real Deal</em>)
Elaine Chao and tracks inside the LIRR storage facility in Hudson Yards (Credit: Alistair Gardiner for The Real Deal)

The federal Department of Transportation is pulling out of the Gateway development corporation’s board, in the latest sign that the Trump administration is losing interest in a $23.9 billion infrastructure project considered vital to New York City and New Jersey.

“It is not DOT’s standard practice to serve in such a capacity on other local transportation projects, and DOT’s Trustee has had to recuse from several board actions already,” the agency’s general counsel wrote in a letter Friday.

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The Gateway program seeks to build new train tunnel tracks, bridges and expand Penn Station, in part to avoid a commuting nightmare when one of the two tunnels connecting Manhattan and New Jersey has to be shut down for repairs. The Gateway development corporation was created in 2015, with trustees from Amtrak, the federal government, New York and New Jersey.

The Obama administration pushed the project and promised cheap loans, but the Trump administration appears less keen on backing it. A DOT spokesperson told the Wall Street Journal that resigning from the board was meant to make sure there “is no appearance of prejudice or partiality in favor of these projects ahead of hundreds of other projects nationwide.”

In an April interview with The Real Deal, Amtrak chair Anthony Coscia argued that the Gateway project and the continued possibility of commuting between New York and New Jersey is crucial to New York’s real estate market. “If we took that tunnel out of service completely, for any amount of time — a month, two months, three months — it would be a community Armageddon that I can’t even begin to describe,” he said.  “Gateway and the way we manage all of this will play a major role in whether you can sustain real estate values in and around New York City. What’s the value of a building, whether it’s commercial office space, residential, retail, if you can’t generate access to it?” [WSJ]Konrad Putzier