Gateway Tunnel Gets $7B Federal Funding, Construction to Start This Year

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A federal grant of $6.88 billion — the largest amount for a mass transit project — is in the pipeline for the Gateway tunnel project to launch the engineering and construction phase within a year.

U.S. Sen. Charles Schumer announced a federal grant to kickstart the long-delayed construction of a rail tunnel beneath the Hudson River to ensure the longevity of Amtrak train access to Pennsylvania Station.

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“Every day, 200,000 people pass through the North River Tunnel, and a closure affects not just the entire Northeast Corridor, but the entire country,” U.S. Transportation Secretary Pete Buttigieg said in a statement. “The Hudson River Tunnel project is entering the Engineering phase, moving us a huge step closer to finally revitalizing and expanding this century-old piece of American infrastructure.”

The announcement was welcomed by commercial real estate officials.

“It’s only right that the most important infrastructure project in the nation should receive more federal funding than any other mass transit project in history,” Carlo A. Scissura, CEO of the New York Building Congress, said in a statement. “This is a major step towards repairing our strained rail infrastructure and increasing regional connectivity to New York City and all of the economic and cultural opportunities that are available here.”

Some parties had still not been notified of the funding by the U.S. Department of Transportation as of Thursday morning, such as the Gateway Development Commission. The federal agency did not immediately respond to a request for comment.

“This is one of the most significant steps forward for the Gateway Program to date and brings the Hudson tunnel project much closer to a full funding grant agreement,” Brian Fritsch, spokesperson for the Regional Plan Association and Build Gateway Now, said in a statement. “The project moves from planning to reality, ensuring we will build the 21st century transportation system that our environment needs, that our nation’s economy relies on, and that trans-Hudson riders deserve.”

The funding follows on the heels of a January announcement of a separate $292 million grant for the project through the Bipartisan Infrastructure Law. That funding alone would start construction on the concrete “casing” element of the “box tunnel” beneath Hudson Yards, creating the structural support. That element alone will cost $600 million, the Biden administration said at the time.

The 10-mile tunnel to link the Palisades in New Jersey to Penn Station has been in the works for nearly a decade and aims to replace the existing century-old tunnels damaged by Hurricane Sandy. The project also will replace the Portal Bridge, built in 1910 to carry railroad cars over the Hackensack River in New Jersey, with the new Portal North Bridge.

Mark Hallum can be reached at mhallum@commercialobserver.com.