Gov. Chris Christie Thursday announced that the New Jersey Transit Authority hired the Washington law firm Patton Boggs LLP to help the state challenge the Federal Transit Administration’s demand that it repay $271 million in federal money the state spent on a canceled commuter-rail tunnel.
The Republican governor in late October ended the $8.7 billion project, called the Access to the Region’s Core, saying it was too expensive for New Jersey to bear. The FTA last month ordered NJTransit, the agency overseeing the ARC tunnel, to repay the funds that had been allocated for the commuter-rail project by Dec. 24.
Christie believes the $271 million payment demand is inconsistent with previous FTA policy. He cited a failed transit project in Rochester, N.Y., for which the agency did not demand repayment. Christie also argued that the $271 million was used to finance work that has “ongoing value” for other entities and future transportation projects in the region.
“New Jersey and its taxpayers should not be responsible for these costs, which is why our administration is making every effort to fight the FTA’s unreasonable demands,” Christie said in a statement. “I simply cannot allow our state to be taken advantage of any further over this highly flawed project.”
In response to Christie’s announcement that the state would challenge the repayment demand, an FTA official said the governor had been personally and repeatedly warned that NJTransit would be liable for allocated federal funds. In addition, the ARC tunnel is a project under an Early Systems Work Agreement with the FTA in which applicants must repay the agency if a project is not carried out for reasons within the control of the applicant, the FTA said.
New Jersey’s obligation toward the project was $2.7 billion, along with $775 million for the new Portal Bridge. The federal government and the Port Authority of New York and New Jersey also pledged $3 billion each. The FTA projected cost overruns of $1.1 billion to $4 billion, which would have been New Jersey’s responsibility.