New Jersey Transit last week hired Patton Boggs LLP to help the agency contest a $271 million repayment demand from the Federal Transit Administration for money it spent on a now-canceled commuter rail tunnel.
Gov. Chris Christie on Dec. 2 announced that his administration had selected Patton Boggs to challenge the federal government’s demand for payment. NJTransit’s board approved the selection on Thursday.
Patton Boggs will charge the mass-transit agency $485 per hour, according to NJTransit documents.
The Republican governor in late October ended construction on a $8.7 billion passenger-rail tunnel, called the Access to the Region’s Core, that would have run under the Hudson River, connecting New Jersey and Manhattan. Christie terminated the project as New Jersey would have had to take on any cost overruns, which the FTA estimated to be $1.1 billion to $4 billion. NJTransit was overseeing the ARC tunnel.
On Nov. 24, the FTA sent NJTransit a letter demanding reimbursement of $271 million within 30 days.
Christie has said the repayment demand is inconsistent with previous FTA policy. NJTransit executive director James Weinstein on Thursday said the agency will fight FTA’s payment demand.
“They were a participant in everything we did, every day, every hour,” Weinstein was quoted as saying in the New Jersey Star Ledger. “We believe very strongly that the position that the federal government has taken is not nearly as clear as they believe it is.”
Conversely, the FTA has said the ARC tunnel was part of its Early Systems Work Agreement with NJTransit, which requires applicants to repay if a development is not carried out for reasons within the control of the applicant.
“The FTA was certainly working very closely with NJTransit to advance the ARC project, just as we do with all major federally funded transit projects,” administrator Peter Rogoff said in a statement.
“We were doing so because FTA had already entered into a binding contract with NJTransit to build certain critical segments of the ARC project — the largest federally funded transit project in history. Gov. Christie’s decision to renege on that contract and abandon the project is what now requires us to insist on the return of federal funds expended under the Early Systems Work Agreement.”
