AP Photo/Julio Cortez

What One Really Expensive Tunnel Means to U.S. Train Travel

The price tag of New York and New Jersey’s Gateway Project includes much more than a construction bill.

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Here’s a story about how business gets done at New York’s Penn Station. In the late 1970s, the escalator connecting Tracks 15 and 16 to the concourse sat broken for more than four years because Amtrak, which owns the complex, and the Metropolitan Transportation Authority, whose Long Island Rail Road trains terminate there, could not agree who should pay to fix it.

The escalator had already stopped working when Amtrak was granted ownership of Penn Station in 1976. The two agencies squabbled for several years over how the $82,000 repair cost should be divided. An initial agreement split the cost 82-18. Amtrak didn’t think that was fair. A subsequent study determined Amtrak should pay 85 percent. In January 1979, the two sides agreed on an 80-20 funding split.

On Friday, March 23, the escalator sprang to life. The next day it broke again.

It’s a neat illustration of the myriad ways that planning in and around America’s largest city is hamstrung by fractured governance. The New York metro area now includes four states, a dozen cities with more than 100,000 residents, and more than a dozen metropolitan planning organizations. That balkanization makes regional services expensive, inefficient and highly variable from one town to the next.

What happens when what’s broken isn’t an escalator but two train tunnels that carry 80,000 people a day into the heart of Manhattan?

That question has cast a shadow over New York since October 2014, when Amtrak announced that Superstorm Sandy had permanently damaged the North River Tunnels, which connect Penn Station to Newark, the North Jersey suburbs and all points south. The tunnels would need to close for a year or more. Closing even one tube would require service cuts of 75 percent, an event that would leave tens of thousands of commuters hassled and rerouted, if not totally stranded.

The only solution seems to be a new, extremely expensive tunnel between Manhattan and New Jersey. Proposed by Amtrak as part of a package including a half-dozen other regional Northeast Corridor improvements, the tunnel is known as the Gateway Project. In complexity, scale and cost, it is unique. Yet as a crucial reconstruction project, Gateway may presage similar needs in other U.S. cities — and reveal, in hurried completion or idle failure, the insufficiencies of the American system for building infrastructure.

“Our transportation policy is primarily geared towards maintaining what we already have,” says Stephen Gardner, Amtrak’s vice president for business development in the Northeast Corridor. “What we’re looking at here — and what we’re looking at up and down the Northeast Corridor — is the complete renewal and rebuilding of core infrastructure which is at the end of its useful life.” It is one of the first cases, he suggests, of a turning point for a whole generation of infrastructure.

New York’s U.S. Sen. Chuck Schumer has called Gateway the most important infrastructure project in the country. With funding assurance from New York, New Jersey and the federal government, planners in the region now feel optimistic that the project will be built. A Gateway Development Corporation has been created within the Port Authority of New York and New Jersey. Federal laws have been tweaked to ease funding and financing.

What we don’t know is what Gateway will cost, how it will be paid for or whether its key component can be finished before the existing tunnel gives out.

What we know is what happens if it’s not: transportation Armageddon.

Transportation Armageddon

The phrase comes from Schumer, whose love for media exposure is well known in Washington. But, as former Schumer communications director Phil Singer explained to Business Insider in 2014, there is a method to the madness. “He’s very successful and smart when it comes to identifying issues where the press can play a key role in solving a problem,” he said.

Over the past few years, Schumer and Sen. Cory Booker, of New Jersey, have mounted an accelerating PR campaign on behalf of the Gateway Project. At the Municipal Arts Society Summit in October, Booker sounded like he wished the existing tunnel would just break down completely and inject the urgency of 80,000 beleaguered commuters into the slow-moving political dance. In November, the senators secured the promise of federal funding for Gateway, sending confidence in the project to an all-time high.

Meanwhile, Amtrak Chairman Anthony Coscia waged a quieter battle. The Gateway plan was drawn up shortly after New Jersey Gov. Chris Christie canceled a similar tunnel plan. Under Coscia’s leadership, Amtrak plunged into an early Gateway leg on Manhattan’s West Side. But the company’s message was clear: They could not build the tunnel alone. “He’s one of the real heroes,” says Tom Wright, president of the Regional Plan Association, an NYC-based urban planning organization. “He’s done more for this than anybody.”

New Jersey Gov. Chris Christie addresses a question about the Gateway Tunnel project in February 2011. (AP Photo/Julio Cortez)

The Obama administration, too, rang the alarm: In May, Peter Rogoff, then DOT’s undersecretary for transportation, slammed the tri-state area’s reluctance to begin discussions on a new tunnel. In July, his boss, Anthony Foxx, wrote to Christie and New York Gov. Andrew Cuomo to ask them to meet. The neglect of the tunnel project, Foxx said, was “almost criminal.” Vice President Joe Biden publicly asked Christie to come to the table.

Perhaps the strongest signal came from the tunnels themselves: Over one week in July, corroded electrical systems caused a weeklong series of delays. At the worst moments, a 15-mile commute took three hours. New Jersey Transit, which leases the right-of-way from Amtrak, filed a letter of complaint that the tunnels were not being properly maintained. Christie blamed Amtrak’s “abject neglect” of its infrastructure. Tens of thousands of trips were delayed.

Commuters wait to board NJ Transit trains heading to New York City at a train station in Secaucus, New Jersey, in March 2016. (AP Photo/Seth Wenig)

This fall, the cumulative pressure seemed to break down the governors’ obstinacy. In July, Christie had called on his attorney general to investigate Amtrak. In August, Cuomo had said the tunnel was not his problem. “It’s not my tunnel!” he told reporters. “Why don’t you pay for it?” But by September, the men agreed their states would pay for half the new project. “Our shovels are ready,” a joint letter proclaimed.

In November, in a region where relationships among agencies have been characterized more by antipathy than cooperation, the Gateway Development Corporation was formed within the Port Authority, with a four-member board representing New York, New Jersey, Amtrak and the U.S. DOT. In March, Amtrak and the Port Authority agreed to allocate $35 million each for preliminary engineering work — the first example of the 50-50 commitment in action.

The Link Holding Up an Entire Economy

What’s at stake is the keystone of a network that has been one of the country’s great train travel success stories. In the past 30 years, the percentage of New Jersey-to-New York commuters using transit has risen from 39 to 52 percent. Trans-Hudson River auto travel has fallen by 11 percent in the past eight years — traffic is the same as it was in 1986, though the region is 14 percent larger and more people than ever before are commuting to jobs across the region.

No piece of the Trans-Hudson pie has experienced more traffic growth than the North River Tunnels: Since 1980, the number of commuter and intercity rail passengers crossing into New York is up 200 percent. New Jersey Transit has been the country’s fastest-growing commuter railroad in that time. In 1980, 9 percent of Manhattan-bound commuters used commuter rail. Today, that figure is 16 percent. Amtrak’s Northeast Corridor routes have also posted strong growth. In 2012, coming off of five straight years of 5 percent traffic growth, the company estimated that 75 percent of New York-Washington travel was by train, up from just over 33 percent in 2000.

And yet the connections to Manhattan from the west are weak. Thirty-two tracks cross the East River; 17 tracks cross the Harlem River. There are only six tracks between New York and New Jersey. Four of them are for PATH subways. The other two are the tunnels to Penn, which were built in 1910 by the Pennsylvania Railroad. No track has been added in the intervening century. The tracks between Newark and Penn Station form the busiest stretch of the Northeast Corridor and, along with the Manhattan station itself, a bottleneck on capacity. During the a.m. rush, a train runs under the river every 150 seconds.

New Jersey Transit, the Port Authority and the Metropolitan Transportation Authority began planning a new tunnel in 1995. That project, known as Access to the Region’s Core (ARC), would have brought NJ Transit trains to a new terminal under 34th Street near Herald Square. New Jersey broke ground on ARC in June 2009; in October 2010, Chris Christie ended the project because of concerns about cost overruns.

A large rusty metal wall in North Bergen, New Jersey, covers construction at the ARC Tunnel in 2010. (AP Photo/Mel Evans, File)

As a precedent, ARC cuts two ways. On the one hand, it illustrates that despite the enormous challenges of metropolitan governance and stakeholder demands, compromise is possible. “It was a project that was successful, and got lopped off at the 11th hour. It wasn’t a failure of governance that caused the cancellation of ARC,” argues Jen Nelles, a professor at Hunter College in New York who is writing a book about the two projects.

On the other hand, ARC was vulnerable to electoral politics in a way that few big infrastructure projects are. After 15 years of planning, with billions of dollars on the line and construction underway, it was shut off like a light switch.

An Exceptional Case

The Gateway Project will be the largest infrastructure project in the country, and it has received concomitant special treatment. “We do think that projects over $5 billion in size require a different type of thinking and they stretch traditional programs and traditional funding sources,” says Mike Parker, a principal at Ernst & Young Infrastructure Advisors.

One early sign that Gateway was of particular importance came in 2013, at the Hudson Yards development site west of Penn Station. Fearing that the foundations of new buildings might preclude any future tunnel, Amtrak spent $252 million to build a concrete “case” for the future Gateway tunnel — long before there was any consensus or money for the project at large. This 800-foot right-of-way, which runs between 10th and 11th avenues in Manhattan, preserves the possibility. “It was in a way a miracle,” says Gardner, the Amtrak executive. “Manhattan’s not an easy place to do business. The opportunity for this program would have been lost.”

A second positive sign came in the transportation bill that Congress passed in December. Schumer and Booker wrought changes to the Federal Railroad Administration’s low-interest Railroad Rehabilitation Improvement Financing (RRIF) loan program that will make it easier for projects like Gateway to access that financing. No project has ever received a RRIF loan over $1 billion, but that and more would be required to finance Gateway. The bill also revised the federal government’s New Starts transportation grant program to allow DOT to consider projects that provide passenger rail as well as mass transit. On that ledger too, Gateway would stand out.

Sen. Cory Booker asks questions of a panel at a Senate Homeland Security and Governmental Affairs subcommittee hearing on the recovery from Hurricane Sandy in 2013. Seated at far left is Sen. Chuck Schumer. (AP Photo/J. Scott Applewhite)

Finally, Congress essentially divided Amtrak in two, separating the unprofitable long-distance and state-supported routes from the Northeast Corridor. This change — while conditional on future congressional approval of Amtrak appropriations — will make it possible for Amtrak to redirect its NEC operating surplus of about $200 million to $300 million per year toward capital improvements to the corridor, rather than subsidizing long-distance rides.

Anything that depends on congressional approval, of course, is hardly a solid bet. “We need to have a national vision for how those funds are going to be invested. If the Northeast Corridor wants to guarantee they’re going to get the money, what’s in it for Susan Collins in Maine, or Senator Cochran, or Senator Durbin?” asks Joe McAndrew, policy director for Transportation for America. (One possible avenue for congressional compromise on passenger rail funding, he suggests, is a revival of the Gulf Coast Amtrak route.)

The cost is a greater worry still. The 2011 Amtrak announcement pegged Gateway at $13.5 billion. A more recent figure, put forth by the governors among others, was $20 billion. In January, Foxx said $23.9 billion was a more accurate figure.

The latest estimate is still so tenuous that Amtrak has rebuffed the figure, pending engineering studies.

“We don’t do big projects like this very often, so trying to understand how to do it, and what it’s going to cost, is hard,” says Tom Schulze, the senior director for capital planning at New Jersey Transit. “If you’ve ever done a home improvement project, it’s the same. You open up the wall and you say, ‘Oh my god, we need more electric, we need more plumbing.’”

For reference, ARC grew from a $7.4 billion project in 2006 to a $10.8 billion project in 2010 — all before the serious work got started. A parallel regional rail project on the other side of Manhattan, East Side Access, is projected to arrive a decade late and cost $10.8 billion — more than twice the original estimate of $4.3 billion. And it still has seven years to go.

How does a presidential administration with a year left in office make a commitment to a project with no price tag? Foxx has pledged to expedite federal environmental review. But the source of funding hasn’t, and indeed can’t, be nailed down until the project has a firm estimate. No matter what, Gateway’s cost will far surpass the roster of recent grantees of New Starts, TIGER and FastLane, the federal programs that the agencies plan to apply to. “As far as I could tell, it wouldn’t come from a dedicated source,” says Robert Puentes, a transportation expert at Brookings Institution. “There’s not enough money hanging out in some program someplace.”

Still, nearly every transportation professional I spoke to expressed confidence in the federal government’s assurances. “Any uncertainty rests at the state level,” says Veronica Vanterpool, executive director of the Tri-State Transportation Campaign.

Dividing the Check

The heralded agreement leaves 50 percent of Gateway to the states — but doesn’t specify how to divide that sum between them.

In New York, Cuomo recently wrapped up a six-month PowerPoint fantasy of regional transportation in which the governor announced massive projects at Penn Station, LaGuardia Airport and on the Long Island Rail Road.

At the same time, though, the governor has dragged his feet on funding the MTA Capital Plan — the state’s foundational transportation responsibility — all but locking in future fare increases.

“The ambition is great, and it’s nice to talk about these things, but he hasn’t really shown how he’s going to pay for them,” says Jamison Dague, a research associate at the Citizens Budget Commission, a fiscal watchdog group.

Cuomo’s new Tappan Zee Bridge, the signature construction of his first term, is more than halfway done and still has no dedicated funding source. Cuomo’s request that the Federal Railroad Administration relax repayment requirements for RRIF loans may help push any state-level Gateway debt service onto his successor.

A train pulls out of a rail tunnel on a hillside in North Bergen, New Jersey. (AP Photo/Mike Derer)

New Jersey is in worse financial shape than New York. But at least in New Jersey, Gateway is a top priority. New Jerseyans commute across the state line at a rate about three times higher than their New York counterparts. New Jersey Transit riders are among the state’s elite; their median income is about $100,000. It is unlikely that Christie would like to have a second canceled tunnel project on his resume.

Train travelers will certainly end up paying some amount extra. “In my view, a per passenger fee, determined based on Amtrak or New Jersey Transit ridership levels, does have the potential to provide a substantial funding contribution,” says Parker.

The Democratic leaders of the New Jersey State Senate have said that the Port Authority should make Gateway funding its top priority. Responsibility for executing the project lies with the bi-state organization, which has a substantial cash flow of its own. In December, the authority enacted its final toll hike of a multi-year escalation. The cash toll on the George Washington Bridge for a car or motorcycle is $15.

But the Port Authority has already committed bridge and tunnel toll revenues to its own capital plan, which includes some crucial transportation improvements (rebuilding the Goethals Bridge and repairing the GW Bridge’s cables) and some less urgent expenditures, like a $1.5 billion extension of the PATH train to connect Wall Street to Newark Airport. Another increase is not on the table, the agency said in December. And while most experts believe that Port Authority is perfectly positioned to handle a project of this nature, the agency is no stranger to cost overruns and has been plagued by corruption scandals. “A lot has to happen for the public to feel that this is an agency that is spending money wisely and can get projects done on time,” Vanterpool says.

A tunnel, at least, is a straightforward work of engineering — what Port Authority does best. The most challenging part of Gateway, says Martin Robins, a longtime transit planner who helped create New Jersey Transit and began the ARC project, will be the construction of new Penn Station platforms beneath what is currently a busy city block in Midtown West. Without expanding Penn Station capacity, the tunnel can’t add any trains to the mix.

“That’s the weakest link in the entire project,” he says. “The people who were running ARC” — meaning, perhaps, himself — “basically tried to avoid that.”

What Can Gateway’s Progress Tell Us About the Future of U.S. Transit Infrastructure at Large?

On the one hand, it illustrates how, despite talk about the burgeoning self-sufficiency of metropolitan areas, federal funding and leadership can be indispensable. “I can’t tell you how indebted we are to the federal government for pushing this as hard as they did,” says Robins.

In that sense, Gateway may be more exception than rule. The federal government’s $3 billion earmark for ARC was the largest commitment Washington had made to a transit project in U.S. history. Gateway would require at least four times that much from U.S. DOT and Amtrak.

Even Transportation Secretary Foxx seems to recognize that the Gateway agreement is singular — and sensitive. During a visit to the tunnel in January, Foxx told reporters he would like to have financing in place before January 2017, when Obama leaves office.

The president’s transportation budget, released in February, offers a glimpse of a different reality: $16 billion for regional transit, divided among metro areas, another $3.5 billion for grant programs, and $700 million for the Northeast Corridor. In Congress, the proposal will be considered dead on arrival.

So governors remain the most important figures behind the biggest infrastructure improvements, even though those projects are often in some way part of a system beyond their state. That turns tunnels, bridges, subways and highways into political chips, played or withdrawn for popular response. It tilts the scale toward short-term, highly visible improvements.

We live in the shadow of an era where federal disbursals for slum clearance and highways warped urban priorities, and big projects were carried out with little input by local voters. Today, things are much the opposite. Not only do gubernatorial elections determine the viability of epochal projects, like high-speed rail lines in Wisconsin, Ohio and Florida or Baltimore’s Red Line, but at a city level, too, more and more infrastructure decisions are made by ballot referendum. When it comes to transit, this is not a great way to plan. It makes projects vulnerable to pandering, as routes are twisted to appease voter blocs. It also opens projects up to lawsuits when routes inevitably change over the course of engineering studies and environmental reviews.

If Gateway is built in time, then, it may serve only as a very limited example of how big work gets done. As one transit professional pointed out to me, if Gateway were an exemplary project, it would have opened years ago.

Our features are made possible with generous support from The Ford Foundation.

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Henry Grabar is a senior editor at Urban Omnibus, the magazine of The Architectural League of New York. His work has also appeared in Cultural Geographies, the Atlantic, The Wall Street Journal and elsewhere. You can read more of his writing here.

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