The bistate agency directing the construction of a monumental tunnel project between New Jersey and Manhattan sued the Trump administration late Monday night, months after the president froze hundreds of millions in federal funding for the project.
The federal funding, approved by Congress years ago, is critical to the $16 billion project, but the president froze the funding in October, and construction is scheduled to pause later this week when reserves finally run out. Now, the Gateway Development Commission, a New Jersey-New York agency tasked with running the Gateway project, sued the Trump administration for breach of contract.
“I made a commitment to fight for Gateway and New Jersey’s economy, which is why we’re taking action to hold the Trump Administration accountable for breaching its contract. When it comes to fighting for jobs and opportunity in New Jersey, I’m all in,” Gov. Mikie Sherrill said in a Tuesday night release.
The GDC’s filing argues the Trump administration has breached its contract by withholding $205,275,358 in owed funds. They say the federal Department of Transportation has identified no wrongdoing by GDC, nor has it offered the GDC any steps to resume the funding.
The White House did not immediately return a request for comment.
The Trump administration announced it would freeze Gateway’s funding on Sept. 30, the day before last year’s government shutdown that dragged on for longer than a month. Democrats believed the project was used as a bargaining chip in those negotiations, but the Trump administration said the freeze was so officials could review “unconstitutional DEI principles” in the project. The funds remain frozen, even after personal pleas from Senate Minority Leader Chuck Schumer (D-NY).
The GDC announced last week that it would begin “winding down work” after it reached the end of its credit line. The pause would instantly kill nearly 1,000 jobs, and an extended pause could risk a further 11,000 construction jobs, the GDC said.
“Our goal has always been to work with our federal partners and get funding flowing again,” GDC CEO Tom Prendergast said Tuesday. “At the same time, we must hold the federal government to its contractual obligations so that construction is not halted. It’s our responsibility to fight for the nation’s most urgent infrastructure project and the nearly 1,000 workers whose jobs are threatened.”
The Hudson Gateway project to expand rail capacity on the Northeast Corridor has been underway for years, ever since Gov. Chris Christie cancelled an earlier iteration of the project known as Access to the Region’s Core. The multi-billion-dollar project stalled again during Trump’s first term, only to start back up under President Joe Biden, with construction beginning in 2023 and a planned opening date set for 2035.
Sherrill, who inherited the governorship months after the funding freeze, had threatened a lawsuit back in October, during the campaign.
Federal grants fund about 70% of the Gateway project; the rest comes from Department of Transportation loans that will be paid back by New York and New Jersey states and the Port Authority. The Trump administration froze both forms of funding.
The GDC said an extended pause in funding increases the chances that the 116-year-old North River Tunnel will have to shut down. If that happens, the country’s most-used passenger rail line would be severed.
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May 3, 2018