Construction pauses on Hudson Tunnel Project amid funding freeze

Construction paused Feb. 6 on the Hudson Tunnel Project (HTP) after the federal government did not release the $205 million in disbursements to the Gateway Development Commission (GDC) that is contractually obligated to fund the project. The Trump Administration froze funds for the project on Oct. 1, 2025. 

Ahead of work pausing on the project, the GDC, which was created in 2019 by the states of New York and New Jersey as a special purpose entity to build the projects of the Gateway Program, including the HTP, filed a lawsuit against the federal government. 

Hours after construction was paused, New York Attorney General Letitia James issued a temporary restraining order to prevent construction from being paused, according to a report from CBS News New York. 

On Feb. 9, Judge Jeannette Vargas granted a short administrative stay until Feb. 12 at 5:00 p.m. local time for the federal government to unfreeze the funds if it isn’t successful in convincing the Second Circuit Court of Appeals that it should be able to withhold the money, according to a report from CNN. 

New York Gov. Kathy Hochul issued a statement on Vargas’ ruling, saying, “Today, a judge affirmed what we’ve said from the start: Our case against the Trump Administration is likely to succeed, and Donald Trump’s attempt to rip away funding and derail the Gateway Tunnel project is likely to be found unlawful. This ruling is a victory for the thousands of union workers who will build Gateway and the hundreds of thousands of riders who rely on it every day. We will work to protect this decision and move as soon as possible to get work back on track. We will continue coordinating with our partners at the Gateway Development Commission and New Jersey to ensure the administration follows the law and releases the funding New Yorkers are owed.” 

In a statement to Mass Transit magazine, a GDC spokesperson confirms that even though the temporary restraining order was issued, “construction will remain suspended until federal funding disbursements resume. GDC continues to pursue all avenues to regain access to the federal funds for this urgent project, including our lawsuit.” 

According to CNN, the Trump Administration told Senate Minority Leader Chuck Schumer (D-NY) in January that they would release the funds for the project if Shumer agreed to rename New York’s Penn Station and Washington’s Dulles International Airport after the president.  

Schumer responded on X, saying the claim is an “absolute lie” and that only one person can restart the project “in the snap of a finger.” 

Tom Wright is the president and CEO of the Regional Plan Association, one of the oldest independent metropolitan research, planning and advocacy organization in the U.S. He notes the project is at a delicate point. 

“This is uncharted waters,” Wright said. “This is not as simple as on Thursday this is done. “My understanding is that these contracts and grants have all kinds of requirements in them that if the administration wants to, they [can] keep delaying and denying things.” 

Wright notes the longer construction is halted, the more likely it is that the project is not only behind schedule, but behind budget. 

“A question in my mind is at what point do bids on the project need to be rebid and renegotiated?” Wright said.  

New Jersey Gov. Mikie Sherrill says the state “will continue to pursue full relief so the nation’s most urgent transportation project can keep moving forward and workers can keep putting food on the table.” 

Mass Transit magazine will continue updating this story as more information becomes available.