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On Friday, U.S. Transportation Secretary Ray LaHood announced that he signed an agreement with New Jersey Gov. Chris Christie calling for the state to reimburse the federal government $95 million for money that was supposed to be spent building the Access to the Region’s Core (ARC) project.

New Jersey terminated the project — which called for building two new tunnels under the Hudson River — and the U.S. Department of Transportation (USDOT) has been seeking repayment of $271 million in federal dollars spent by the state on the project.

The $95 million settlement will permit the USDOT to recover all of the  $51 million in New Starts money provided to New Jersey so those funds can be made available to other communities for public transit projects, USDOT officials said in a prepared statement. The amount also recovers about half of the funds provided to New Jersey under the Americans Recovery and Reinvestment Act.

In addition, the agreement’s terms require the state to spend more than $128 million in Congestion Mitigation and Air Quality Improvement program funds on transit-related, USDOT-approved projects, federal officials said.

Christie cancelled the project last year after state and federal officials could not reach an agreement on terms over the amount New Jersey taxpayers would pay for the project.