Will $16 billion Gateway Tunnel project stall under a new Trump administration?

In November 2016, when Donald Trump first won the presidency, concern was expressed about the impact on the Gateway Tunnel project to build two new rail tunnels under the Hudson River and rehabilitate the century-old existing tunnels, according to NJ Advance Media.

Eight years later, and the $16 billion Gateway Tunnel project is in a different, potentially more secure place from being stopped if the incoming second Trump administration changes its mind, officials and experts said.

Three construction contracts are underway, one on the Manhattan coast, another in North Bergen and one in the Hudson River itself.

“There is substantial construction work on both sides of the Hudson and in the river,” said Stephen Sigmund, a spokesperson for the Gateway Development Commission, which is overseeing construction. “Already it is employing 7,500 workers, generating $1.5 billion in economic activity from those contracts alone.”

Overall, the project will generate over 95,000 jobs and add $19.6 billion to the nation’s economy, he said.

As reported by NJ Advance Media, The Gateway project would build new Hudson River rail tunnels and rehabilitate the existing 114-year-old tunnels. It also includes other rail infrastructure work from Secaucus Junction to Penn Station New York.

Another factor is that the project has funding agreements and contracts with the Federal Transit Administration in place with New Jersey, New York, Amtrak and the commission, officials said.

That includes a history-making $6.88 billion full funding grant agreement signed on July 8 with the Federal Transit Administration, the largest grant in U.S. history for the tunnel.

“Funding for the tunnel is in place and obligated and construction has begun. I don’t think he (Trump) would jeopardize that,” said Tom Wright, Regional Plan Association CEO.

But Wright expressed concern for the future phases of Gateway, which includes building an annex next to Penn Station New York to park additional trains that use the tunnel and other transportation projects, such as the $10 billion replacement of the Port Authority bus terminal in Manhattan, which is counting on a $1 billion low interest federal loan for financing that project.

Federal and regional actions were taken this year to get funding committed and construction started on the tunnel in anticipation of a change in administration. That effort was to get Gateway to what outgoing CEO Kris Kolluri called “the point of no return.”

That tactic of starting construction to ensure future funding was used by Robert Moses, New York’s infamous master builder and planner, to guarantee political support for his Long Island parkways, as detailed in Robert Caro’s biography of him, The Power Broker.

Moses’ practice was designed to pressure politicians who opposed the project and funding by starting construction early, before all the funding was committed. He’d threaten to blame public officials who blocked additional funding of wasting tax dollars spent on construction, according to Caro’s book.

While Gateway officials didn’t go to that extreme, they expressed the desire on multiple occasions to get construction underway as soon as possible and to lock down funding this year.

“The reason the Biden political appointees at US DOT and FTA rushed to approve Capital Investment Grant New Starts Core Capacity Program project grants is to legally lock in the federal funding for both the $16.1 billion Gateway Tunnel Phase One and MTA’s $7.77 billion before the is a change in both the administration and both houses of Congress,” said Larry Penner, a former FTA official.

Those funding agreements result in a base grant which is amended over a number of years until the full 100% of FTA funding is obligated through the federal budgeting process, he said.

“This assumes that Congress approves and the President signs into law each annual USDOT FTA budget, which includes each new year’s FTA Capital Improvement Grant budget allocation to fund all active Full funding agreements,” he said.

During the first Trump administration, New Jersey and New York’s congressional delegation had to fight to keep annual appropriations for Gateway in the federal budget, leading to a show down in 2018.

Historically, going back decades, Penner said the FTA has never “not fully funded or cancelled any full funding grant agreement” as long as the local share of the project cost, which in this would be case is New York and New Jersey’s portion of the project price tag.

“Very often, Democrats cry wolf that the mean old Republicans will blow your house down or cancel major FTA capital investment transit projects,” Penner said. “Historically, this has not been the case, as an interested internal observer working for FTA for over thirty years before retiring. It has been the same as an active observer during retirement.”

The first Trump administration did delay some bureaucratic steps and approvals needed for Gateway and a companion project, building a new Portal North Bridge to carry the Northeast Corridor rail line over the Hackensack River in Kearny, to qualify for funding.

However Trump backed the bridge project in June 2020 during a dinner in Bedminster with Gov. Phil Murphy, a Democrat, signaling federal transportation officials to move ahead with the funding approval process. In a Tweet, Trump said he backed it to rebuild infrastructure and get people back to work after the COVID-19 pandemic.

“I sat across the table from President Trump in Bedminster and urged him to authorize the portal North Bridge project, one of the most critical infrastructure issues in the nation,” Murphy said at a Wednesday afternoon press conference in Newark about Tuesday’s elections. “The president heard my argument and greenlit the project literally that night.”

The tunnel was a different story. It had received a low ranking under Trump’s transportation secretary and a key environmental study sat dormant since Feb. 2018 until it was approved by the Biden administration in May 2021.

New York Gov. Kathy Hochul reiterated her support during a post-election press conference Wednesday.

“He needs to support the Gateway Tunnel and Second Avenue subway,” she said. “I’ll work with him on these efforts to benefit New York.”

GDC officials and other supporters said they’re prepared to argue the merits of the project to the new administration.

“We spent the last year building the case this is most urgent infrastructure project and we will make that case to every administration and will continue to do that,” Sigmund said. “The case is clear with what we experienced this summer, you can’t have 114-year-old tunnel as a chokepoint.”

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