Amtrak to Pay $505M for D.C. Union Station Leasehold: Report

A light at the end of the tunnel has appeared in the years-long dispute over control of Washington, D.C.’s Union Station’s commercial component, though the final outcome of the squabble is still in the hands of a judge.

Amtrak, which controls the gates and rails at the historic train and bus station, has agreed to pay $505 million to Rexmark, a New York-based real estate investment firm, for control of the leasehold interest in the transit hub’s roughly 607,000-square-foot commercial space, according to the Washington Post. The federal government owns the land used by Union Station, and the nonprofit Union Station Redevelopment Corporation (USRC) acts as master leaseholder of the property. An exact timeline for when a judge could make a decision about Amtrak’s offer was not immediately clear, though a decision is likely to happen within weeks, rather than months, according to a person familiar with the deal.

The fight over Union Station is complicated, to say the least. New York developer and investor Ben Ashkenazy, via his Ashkenazy Acquisition Corporation, in 2007 took control over the station’s commercial component through 2084 for $160 million, according to reports at the time. 

Yet by 2020, Ashkenazy had defaulted on its debt tied to the property, according to Rexmark, prompting the lender to take over the leasehold interest in early 2022 at foreclosure auction. In comes Amtrak, which in spring of that same year filed an eminent domain suit to wrestle control from the lender for $250 million in just compensation. A federal judge ruled last year that Amtrak was within its legal rights to take over the station, though Rexmark appealed, arguing that Amtrak had illegally taken over the station.

Representatives for Amtrak did not immediately respond to a request for comment. A representative for Rexmark declined to comment. 

If ultimately approved, Amtrak’s acquisition of the leasehold interest would pave the way for USRC’s redevelopment plans for the station, estimated to cost $8.8 billion. Plans include a new rail terminal with multiple concourses, a new bus facility, a pedestrian throughway and more retail space. The Federal Railroad Administration approved the final environmental impact assessment for the project in March 2024, though full funding is yet to be secured.

Doug Carr, CEO of the USRC, told Commercial Observer in a statement that the nonprofit was “pleased” by the proposed deal. 

“This anticipated resolution now enables USRC and Amtrak, along with our federal partners, to focus on USRC’s objective of delivering capital improvements while advancing the multi-billion dollar Station Expansion Project,” Carr said.

In November, the outgoing Biden Administration approved $1.5 billion in Bipartisan Infrastructure Bill money to fund 19 rail-related projects in the Northeast Corridor railroad line, including up to $24 million in support of planning of Union Station’s expansion. 

“Future construction of the project will improve the state of good repair of this major station on the Northeast Corridor and improve intercity passenger rail performance through a projected 50 percent decrease in boarding time and the reduction of Amtrak’s idle time at the station,” the Department of Transportation said at the time. 

Nick Trombola can be reached at ntrombola@commercialobserver.com.