Gateway project financing details unveiled

New York and New Jersey leaders yesterday formally announced the new federal-state agreement to establish the Gateway Development Corp. that will oversee construction of a new trans-Hudson rail tunnel system.

Under the agreement, Govs. Chris Christie of New Jersey and Andrew Cuomo of New York will immediately direct the Port Authority of New York and New Jersey (PANYNJ) to set up the development corporation to oversee the construction of the Gateway project.

Revealed on Wednesday, the financing deal calls for the U.S. Department of Transportation (USDOT) and Amtrak to split the tunnel project's cost with the two states. The federal government will put up at least half the project's cost, which could be as high as $20 billion.

The development corporation will "identify and maximize" federal grant opportunities within USDOT, as well as pursue a low interest loan from the Railroad Rehabilitation and Improvement Financing (RRIF) and Transportation Infrastructure Finance and Innovation Act program, according to a news release issued by U.S. Sen. Charles Schumer's (D-N.Y.) office.

The corporation will have a board with members representing the two states, the federal government and Amtrak, which owns the tunnel. A PANYNJ member will serve as the board chair, while a member of Amtrak serving as vice chair.

"It was a long struggle but getting all the parties on the same page is a very big first step," Schumer said. "We will scour every part of the federal government to get our 50 percent and we know the states will do the same."

The federal share of the funding is likely to come from a combination of New Starts grant dollars, Amtrak Northeast Corridor profits, Amtrak capital funds, annual appropriations and other federal sources. The states' share of the funding may include the use of federal loan programs that would require the PANYNJ and/or partners or designees to repay the debt, according to the press release.

U.S. Transportation Secretary Anthony Foxx, who this summer called on New York and New Jersey leaders to reach an agreement over repairing the aging tunnel system, issued this statement in response to the new agreement: "I commend all parties for their leadership putting together a structure and finance agreement that will help advance this project in an expeditious manner.  When I sounded the alarm this summer, my goal was to get the necessary parties to the table. Now, that table is set.  I am ready to roll up my sleeves and use all the tools at my disposal to move this critical project forward."