Amtrak Using Eminent Domain to Seize Control of DC’s Union Station
Amtrak is attempting to use eminent domain to take control of Washington, D.C’s Union Station, the southern terminus for most of its Northeast Corridor operations.
Currently, the United States Department of Transportation (DOT) owns the station building and parking, while Amtrak controls the platforms and tracks. Overall, Union Station consists of 211,000 square feet of retail and 172,000 square feet of office and concourse space occupied by Amtrak,
Ashkenazy Acquisition has managed Union Station through a lease with the DOT since 2007.
Amtrak is claiming that seizing control is necessary to expand and modernize the second-busiest station on the passenger operator’s network, according to a report from the Washington Post. Amtrak offered Union Station Investco, a subsidiary of Ashkenazy, $250 million to buy the station earlier this month, the Post reported, but Ashkenazy didn’t respond to the offer. Amtrak has placed that money in control of the District Court as part of the eminent domain proceeding.
Dennis Newman, Amtrak’s executive vice president for strategy, planning and accessibility, told the Post that the action was necessary in order to advance some long-delayed state-of-good-repair and capital projects, in order to shore up the station infrastructure. “An improved Washington Union Station is really key to our mission,” he said.
In May last year, Commercial Observer reported that Ashkenazy was in talks with a sovereign wealth fund interested in investing $100 million to recapitalize Union Station, not long after the firm defaulted on a $330 million mortgage, based on data from Trepp.
It’s unclear if that happened.
In 2018, Ashkenazy secured a $430 million fixed-rate loan with Citigroup and Natixis for the combined retail and office space at the station, which consisted of a10-year, $330 million commercial mortgage-backed securities (CMBS) loan and $100 million in mezzanine debt, CO reported. The company got a break on both loans due to the pandemic, which caused many of the customers to stop paying rent.
Amtrak argued that its plan to improve the station and increase passenger volume cannot occur if Ashkenazy is involved, in a complaint in D.C. District Court last Thursday.
In a prepared statement, Amtrak noted it would work with partners like the U.S. Department of Transportation, the Federal Railroad Administration and local and regional commuter authorities to achieve its vision for the future of Union Station.
“This is an important step that will allow Amtrak to directly invest in [Washington Union Station] in a more efficient and effective manner, make improvements with the most benefit for intercity and public transit customers, including enhancement to passenger flow, ticketing and waiting areas, and critical safety projects,” a spokesperson said.
Requests for comment from Amtrak and Ashkenazy were not immediately returned.
Keith Loria can be reached at Kloria@commercialobserver.com.