Bi-state bill would form framework for Gateway project launch

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New York and New Jersey lawmakers are looking to steer funding for a new Gateway rail tunnel by expanding the role of a new agency charged with coordinating funding for the long-stalled Hudson River project.

A bill pending in both state legislatures would form a nine-member public benefit corporation called the Gateway Development Commission that would be empowered to sponsor the multi-billion transportation initiative through government grants and loans. The move would result in a major revamp of the smaller three-member Gateway Development Corporation, which the Federal Transit Administration previously determined is not eligible for federal capital improvement grants as constituted. The states have committed their share of local funding, but have not yet received federal funding commitments from the Trump administration.

“We need to get the Gateway project moving and this bill provides a strong framework to ensure that the project is done right,” Senate Majority Leader Loretta Weinberg, D-Teaneck, said in a statement. “When federal funding is finally approved, we will have the right agency and people in place to plan, build and manage the largest and most important mass transit project in the nation.”

The proposed measure has been advancing in New York and New Jersey as lawmakers introduced an identical version on June 6 with the goal of passing both the senate and assembly before the legislative session ends in late June. The GDC would be a partnership among the two northeast states and Amtrak to oversee the planning, funding and construction of the new tunnels along with other elements of the Gateway project that includes a new Portal North Bridge over New Jersey's Hackensack River.

Both states are seeking to jump start momentum for the Gateway project, which involves replacing the existing 109-year old Hudson River tunnel connecting northern New Jersey to Manhattan’s Penn Station. The existing two-track rail line, which suffered severe sweater damage during superstorm Sandy in 2012, is used by Amtrak and New Jersey Transit with about 200,000 riders transported on a daily basis.

The commission would oversee the Gateway project and require each state to pay 50% for the project. The measure also aims to provide for legislative oversight as well as set strict transparency and accountability standards. It would also provide gubernatorial veto powers over commission actions similar to the power governors of both states have now over the Port Authority of New York and New Jersey.

New York and New Jersey along with Amtrak and the Port Authority forged a funding framework agreement in late 2015 endorsed by the Obama administration to pay for 50% of the tunnel if the federal government picked up the other half. President Trump has since resisted efforts to fund the project, but lawmakers are seeking through the legislation to ensure both states have mechanisms in place to advance construction as soon as funding out of Washington is clarified.

“The success of the Gateway program, which will be the largest public works project of the last hundred years and one which is vital for the region’s economic success, obviously depends not only on funding but on transparent management,” New Jersey State Sen. Patrick Diegnan, D-South Plainfield, said in a statement. “This bill provides the structural framework for the project to move ahead as soon as funding is secured and contains the accountability and oversight standards we’ve fought to apply to other agencies.”

A May Kroll Bond Rating Agency report noted that the expected per-user capital costs for Gateway are comparable to similar large transportation projects conducted by the Metropolitan Transportation Authority and are “manageable” when factoring in risks of the tunnels being forced to shut down due to inaction. The Hudson River portion of the Gateway project has been estimated to cost $12.7 billion with the Portal North Bridge projected at $1.6 billion. New Jersey agreed to assume the entire share of local costs for the Portal North Bridge project by issuing $600 million of state-appropriation-backed bonds last summer through the New Jersey Economic Development Authority.

“We’re glad to see a strong two-state partnership, which shows Congress that New Jersey and New York have stepped up,” said Nick Sifuentes, executive director of the Tri-State Transportation Campaign. “Now it’s time for the federal government to do the same.”

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