Efforts to secure Federal Transit Administration funding to build the $16 billion Gateway rail tunnel under the Hudson River passed what officials called a “significant milestone” with a letter designating the bi-state commission overseeing the project eligible to receive federal funds to build it.
“Last night, we got notice from the Federal Transit Administration that the Gateway Development Commission now is granted eligibility to receive federal funding,” Kris Kolluri, CEO of GDC, said at Thursday’s board meeting. “This is a designation we’ve been working on for the last 10 months and we’re very satisfied we’ve been able to advance it to a successful conclusion.”
The Nov. 15 letter from Michael L. Culotta, acting FTA regional administrator, said the GDC meets the federal requirements to receive funding from FTA after successfully completing the process.
The letter says the FTA considers the commission is on track, capable of building the project and using the grant, said Stephen Sigmund, a GDC spokesman. That doesn’t mean federal checks for that grant are being written now.
“This is a significant milestone to keep us on track to attain the full federal funding,” Sigmund said. “There is a continuing process to get to the full funding grant, which we expect this summer (2024).”
The letter comes after a week of significant funding news for the project, first proposed in Feb. 2011. Most notably, $3.8 billion U.S. DOT Federal-State Partnership Northeast Corridor funding was announced early last week by the Biden administration.
The FTA capital investment grant would provide $6.8 billion for the project, which when added to the $3.8 billion in federal-state partnership funding, reduces New Jersey and New York’s share from 50% to 30% of the total, Kolluri said.
An $25 million USDOT RAISE infrastructure grant to work to finish building a highway bridge over the tunnel mouth in North Bergen, brings the federal funding total close to $11 billion.
The $16 billion project between New Jersey, New York and Amtrak calls for the building of two new Hudson River rail tunnels and rehabilitation of the 113-year-old tunnels built by the Pennsylvania Railroad in 1910.
Gateway was initially proposed in February 2011 by Amtrak. In October 2014, it took on more urgency after Amtrak revealed engineering studies that identified damage to the two old tunnels done by flood waters driven by Superstorm Sandy in 2012 that have the potential to close one of the tunnels for emergency repairs.
Closing one tube of the tunnel would cut train service to 25% between New Jersey and New York, disrupting the 450 trains that use it daily.
In July, the tunnel project entered the engineering phase of the Federal Transit Administration’s Capital Investment Grants Program and the administration had updated the project to receive up to a $6.88 billion dollar grant.
But it’s not a slam dunk, said a former FTA official, who called the letter “standard procedure” for a new transportation agency seeking certification from FTA to become eligible for funding.
“This just one of many hurdles before FTA will offer a Capital Investment Grant Full New Starts Core Capacity Full Funding Grant Agreement (FFGA) sometime in 2024,” said Larry Penner, transit advocate and former Federal Transit Administration New York Office Operations and Program Management director.
He called it “a long time for any first time recipient... just to compete the process of becoming eligible for FTA funding.”
Technically, the GDC took over sponsorship of the project in September 2022, when it became the Gateway Development Commission, which Kolluri called a “first step to become eligible for federal funding.”
The GDC started conversations with the FTA after that and began the official eligibility process at the beginning of 2023, Sigmund said.
“For a new entity that is building our organization from scratch to be up to par with major mass transit systems like MTA and Port Authority, it’s very fast,” Sigmund said.
The GDC also plans to introduce a $68 million 2024 budget for approval next month. That budget includes $12.34 million for staff, $11.9 million for professional services, including outside experts and consultants, and a capital expense budget of $40 million, according to documents outlined at the meeting.
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Larry Higgs may be reached at [email protected].
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