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Inside the Crucial (and Costly) Fight to Fix New York’s Tunnels

One of the most expensive infrastructure projects in American history is also one of the most vital. But no one knows how to pay for it.

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Superstorm Sandy roared into New York City in October 2012 pushing a wall of water ashore just half an hour after high tide. The combined 14-foot “storm tide” inundated the city, flooding 51 square miles, or about a sixth of its total land mass. It cut off power, knocked out natural gas lines, and overwhelmed streets, tunnels and bridges.

In one place, between 30th and 34th streets in Midtown Manhattan, water from the swollen Hudson River spilled into the cavernous underbelly of Pennsylvania Station, arguably the most important transportation hub in North America. As the water approached, officials at Amtrak, which owns the station, confronted a gut-wrenching choice: Should they allow the seawater to flood the tunnels under the Hudson, each fragile and more than a century old, and potentially split the northeast rail corridor in half for years? Or should they force the seawater into Penn Station, where it would wreak severe damage on the railroad’s busiest passenger facility? With little time for debate, Amtrak let its tunnels flood. As a consequence, one of the most crucial pieces of rail infrastructure in the country acted as a stormwater drain for Manhattan.

Ultimately, it took only five days to clear the tunnels of 3.5 million gallons of seawater and to reopen the route to traffic. But while the workers could pump out the water, they couldn’t get rid of the salt that it left behind. Chlorides and sulfides had permeated the concrete walls and started irreversible chemical reactions with the concrete, cast iron and steel inside the tunnel. Amtrak hired engineers to assess the damage. They concluded that the tunnels were safe for the time being, but that there was no way to stop the deterioration short of replacing the damaged walls and tracks. 

The whole episode taught New York-area residents and politicians a lesson in how dire the consequences might be if one of the Hudson River tunnels failed permanently. It forced the governors of New York and New Jersey into supporting a massive new proposal called the Gateway Program that would add tunnels, replace antiquated bridges and expand the cramped Penn Station. The governors came to the White House recently to meet with President Trump about the proposal. It was a crucial event. For the work to begin, Amtrak, the states and the hundreds of thousands of people who travel beneath the Hudson River every year need the president, and possibly Congress, to agree to pay for a substantial share of a project that, at a cost of up to $30 billion, would be one of the most expensive infrastructure ventures in the history of the United States.

The Gateway Program is hugely expensive because it includes many different improvements. Its planners want to do far more than simply fix the existing infrastructure. For an estimated $1.8 billion, they could just rehabilitate the tunnels that were damaged by Sandy. But that would require them to shut down the old tunnels for repair. So the planners want to build two new tunnels south of the current route that would cost another $11 billion. The plan also calls for other related improvements between Newark and New York, including connecting the Hudson crossing  to another New Jersey Transit line, replacing a whole series of bridges and expanding Penn Station to add seven more tracks. All the improvements would take decades to complete; while service would improve along the way, the earliest possible completion date would be around 2030. “Where the whole Northeast rail system is busiest, the straw is the smallest. You have two tracks in a place where you should have eight. Sooner or later, it will come back to bite us if we don’t have redundancy,” says John D. Porcari, the interim executive director of the Gateway Development Corporation, which is coordinating the project. “This Gateway Program is a metaphor for our national will to not just take care of an urgent situation today, but to build for tomorrow.”

Amtrak and two commuter rail systems -- New Jersey Transit and Long Island Railroad -- drop off or pick up 430,000 passengers at Penn Station on a typical weekday. The railroads handle twice as many passengers a day, on average, as the region’s Kennedy, LaGuardia and Newark airports combined. Penn Station’s adjoining subway stations, meanwhile, add another 345,000 trips on weekdays.

Penn Station is straining to handle all of the traffic. The number of people coming through the station has doubled since the 1980s, and most of that growth has come from the two commuter railroads. Passengers complain that Penn Station’s platforms are narrow and crowded. Operations are also strained. Even with 11 platforms and 21 tracks, there is no extra capacity available to move operations if a train breaks down or a passenger gets sick. The constant activity makes it hard to maintain the tracks, switches, power lines and other equipment because Penn Station is open 24 hours a day. 

But even if Penn Station had more space and better facilities, the Hudson River tunnels would still be a huge problem. Trains from Long Island come in from the east, using one of four tunnels connecting them to Queens and beyond. But going west to New Jersey, under the mile-wide Hudson River, there are only two tunnels -- one in each direction. It’s a huge chokepoint that, especially should it fail, threatens to cut off the country’s biggest job center from one of its main sources of workers. 

Just how bad is the bottleneck? Consider this: There are currently 15 ways -- 12  bridges and three tunnels -- to cross the Harlem River from the north into Manhattan. To get across the East River from Brooklyn or Queens into Manhattan, commuters have 18 routes to choose from, not including ferries. But to get from New Jersey into Manhattan across the Hudson, there are only six possible entry points. 

Meanwhile, demand for Hudson River crossings is increasing. For the last two decades, New Jersey and its northern cities have encouraged development near train stations. The New Jersey cities attract residents who can’t afford to rent or buy in New York, but can still work there with a straightforward commute from the New Jersey side into Manhattan. With rail crossings essentially at their maximum capacity, New Jersey residents have flocked to commuter buses. Nearly 7,700 buses cross the Hudson River every day, compared to fewer than 600 from the north and nearly 1,100 from the east. 

For decades, New Jersey’s leaders have talked about the need for more rail access into New York. Superstorm Sandy showed them how easily they could lose the one major link they already have. They are convinced that losing it could throw the state’s entire economy into a recession. With New Jersey and Pennsylvania residents making up 16 percent of Manhattan’s workforce, the effects would reverberate throughout the region. “I don’t think there’s ever been a more clear link between economic recovery or development and an infrastructure project,” says Porcari. “The New York and New Jersey economy is important to the rest of the country’s economy from a finance, manufacturing and other sector perspective. It’s a highly dependent economy.”

Part of the reason that Penn Station is so ill-equipped to handle traffic from New Jersey is that its architects never really envisioned it as a commuter hub. The Pennsylvania Railroad, a behemoth of a company as famous in its day as the enterprises owned by the Vanderbilts and Andrew Carnegie, opened both the station and the Hudson tunnels in 1910. The original Penn Station overwhelmed passengers with its scale, audacity and beauty. The Beaux Arts building covered more than seven acres. Colonnades graced the exterior under the watchful gaze of perched eagles, while inside, steel pillars in a great hall held up a canopy of glass skylights that illuminated statues of allegorical figures.

The Hudson River tunnels were huge achievements in their own right. They were “the biggest civil engineering project in America,” says Jill Jonnes, author of the book Conquering Gotham, which chronicles the massive effort it took to build Penn Station and its adjoining lines. Before the tunnels were built, railroads had to bring passengers from the south and west up to the Jersey side of the river and then transfer them onto ferries. Previous attempts to burrow through the silty soil beneath the Hudson River ended in disaster, and an effort to bring several railroads together to build a bridge over the wide span crumbled for competitive reasons. So the Pennsylvania Railroad eventually drew inspiration from the engineers of Paris and dug its way under the New Jersey Palisades and the Hudson, while simultaneously building the four tunnels to Long Island. Putting trains through those long tunnels required the railroad to build electric -- rather than steam -- locomotives, so they wouldn’t poison the underground air.

But the focus of the Philadelphia-based railroad was just getting people to and from New York City, in the way an airline might today. It wasn’t thinking about how its conquest of Gotham could change Gotham. “It totally transformed New York, geographically, because it knit all these suburbs in a way that they totally had not been before,” Jonnes says. “It enabled the entire region to grow, with Manhattan being the central commercial core and all these vast armies of commuters being able to easily get in and out.”

After several decades, though, the original Penn Station fell into disrepair while the Pennsylvania Railroad itself teetered toward bankruptcy. Automobiles and highways reigned supreme after World War II ended, and the railroad industry suffered. In a desperate move to keep the company afloat, the railroad sold its iconic New York building to a real estate developer, who demolished it, replaced it with the Madison Square Garden sports arena and relegated the train depot to a warren of sterile underground spaces. Within a few years, the railroad would also be gone. In the 1970s, Amtrak assumed control of the Northeast Corridor and Penn Station with it. But it, too, faced huge financial problems, and for years its very existence seemed in doubt. Amtrak was in no position to deal with a massive problem like the congested Hudson River tunnels. Those discussions wouldn’t even start in earnest for two decades.

It was in 1995 that the region’s three major transit agencies began those talks, looking at more than 100 options for new connections between Midtown Manhattan and New Jersey. The alternatives included commuter rail, bus, light rail, subway, automobile and ferry crossings. After eight years of study, they settled on a rail crossing, with three possible routes -- a plan that shares many of the same characteristics as the Gateway Program.

That original plan, which went by many names over the years, including Access to the Region’s Core (ARC), went smoothly at first. Officials broke ground for construction in June 2009. The kickoff ceremony featured New Jersey Gov. Jon Corzine, regional leaders and officials from the Obama administration. At the time, the project was billed as the country’s most expensive infrastructure project (the California high-speed rail line has since earned that designation). Officials anticipated the new tunnels would open in 2018.

But even as construction started, there were complaints about the design of the project. The ARC tunnel would have been a deep one, and it would have ended under the Macy’s flagship store on 34th Street, kitty-corner from Penn Station but not connected to it. So the new station for New Jersey Transit customers arriving in Manhattan would have been 150 feet below ground, with connections to subway lines and other commuter railroads, but not Amtrak. That meant that the station and the new tunnels would have almost exclusively served New Jersey commuters. In other words, New Jersey and the federal government would have borne most of the cost of building them.

Less than a year later, Chris Christie, a Republican who beat Corzine for the New Jersey governorship in 2009, scuttled the project. Christie had supported the ARC tunnels during the campaign and during the early days of his administration. But in October 2010, he changed his mind, saying cost estimates for the project, which started at $9 billion, seemed to keep rising. He worried that the federal government would have required New Jersey to cover any cost overruns. “When they want to build a tunnel to the basement of Macy’s, and stick the New Jersey taxpayers with a bill of 3 to 5 billion over -- no matter how much the administration yells and screams, you have to say no,” Christie explained two years later, after federal auditors disputed many of his stated reasons for pulling the plug.

Christie’s political opponents saw different motivations for the governor’s change of heart. By canceling the project, Christie was able to spend the state’s share of the money on highway improvements and avoid a gas tax increase for a few years, even after paying the federal government back $95 million of what it had spent on the project. The move also came as Republican gubernatorial candidates around the country were attacking the largesse of the Obama fiscal stimulus package, particularly for rail projects in Florida, Ohio and Wisconsin. Putting the brakes on government spending improved Christie’s bona fides for a potential presidential run, or so it seemed to many angry New Jersey Democrats. 

But Christie’s unexpected veto was not the death knell for the Hudson River crossing, after all. In fact, the move immediately set Amtrak scrambling to introduce a more palatable alternative.

Three months after Christie stopped construction on ARC, the chairman of Amtrak joined New Jersey’s two U.S. senators in announcing plans for the Gateway Program. The new plan would build on some of the work already done for ARC. In fact, the tunnels would start off on a similar path on the New Jersey side. But rather than looping around north of Penn Station to a new station, the Gateway proposal envisioned the tracks coming into Manhattan from the south, through the Hudson Yards development and into Penn Station itself. With Penn Station included, the new tunnels could be used by Amtrak’s trains, not just New Jersey Transit. 

Later that day, Christie said he was “thrilled” by the new proposal, even though it was more expensive than the one he had halted. His initial excitement, though, only went so far. “If they ask me for a check today, the answer is no,” he said.

For some time, the Gateway Program remained just one of many infrastructure improvement ideas for the region. Officials had to worry about other projects such as rebuilding the Tappan Zee Bridge, raising the Bayonne Bridge, completing the Second Avenue Subway, and construction of One World Trade Center and its nearby transit station. 

Tom Wright, the president of the Regional Plan Association, who has been pushing for a new Hudson tunnel since 1996, remembers trying to rally the business community to advocate for Gateway. New York Gov. Andrew Cuomo “had been very focused on infrastructure but not this project, because the people travelling under that tunnel are not his voters,” Wright says. “It’s ingrained in politicians to think about the voters and not about the people who work in their districts. So the commuters had been political orphans. That’s why it took so long for this project to get the attention it really deserves.” 

“Even before Superstorm Sandy, we saw time as the enemy,” Wright adds, “because we saw the capacity we had was being filled up. Now the tunnels are deteriorating. And time is our enemy because costs go up so dramatically. Labor does not get cheaper. Steel does not get cheaper. Nothing gets less expensive in a year. Every year we lose, this project gets $1 billion more expensive.”

But even with the consensus after Sandy that the Gateway Program ought to go forward, there was still no clear answer to the big questions of who would pay for it and how. Those questions came to a head in 2015. That spring, Amtrak’s then-CEO Joseph Boardman finally let the public know how long the agency anticipated the damaged Hudson tunnels could last before they’d have to be closed for major repairs. “I’m being told we’ve got something less than 20 years before we have to shut one or two down,” he said.

Meanwhile, John Degnan, a former New Jersey attorney general, took over the Port Authority of New York and New Jersey in 2014, following the Bridgegate scandal that tarnished both Christie and the port authority. One of Degnan’s first priorities was pushing for the Gateway Program. He helped organize a meeting at the new One World Trade Center tower that included both Christie and Cuomo. A top transportation official from the Obama administration let the local leaders know the federal government wanted them to come up with a plan. “We need action by our Congress, we need action in Trenton, we need action in Albany and we need it soon,” Peter Rogoff, then an undersecretary of transportation, told the gathering. “We in Washington foolishly thought that something so fundamental would certainly have a solution by now.”

A few months later, Rogoff’s boss, Transportation Secretary Anthony Foxx, complained that inaction from regional leaders on the Gateway Program was “almost criminal.” Cuomo, in particular, chafed at the criticism. He pointed a finger at the Obama administration for only offering the states a loan to cover the cost of the project. “It’s not my tunnel!” an exasperated Cuomo told reporters that August. “Why don’t you pay for it? It’s not my tunnel. It is an Amtrak tunnel that is used by Amtrak and New Jersey Transit.” 

Finally, in September 2015, Christie and Cuomo sent Obama a joint letter, in which they committed to funding half of the project’s costs using state and local funds. They asked Obama to commit the federal government to paying the other half, as well as speeding up environmental reviews so that construction could start quickly. “The key step on the tunnel is to secure federal funding and design a viable financial package,” they wrote. “No other option is feasible. We assure you that, if we have the funding, we will get it done.”

The Obama administration agreed to the funding split and fast-tracked the environmental reviews. In fact, Gateway officials now hope to get the final environmental sign-off for the new tunnels next spring, two years after submitting the designs for review. 

But it’s still an open question whether the Trump administration will keep the agreement made by Obama, especially because federal officials never specified where they would find the money. Gateway is such a big undertaking that it would overwhelm any of the current programs for funding transit projects, especially if the dollars for those types of projects are cut as the Trump administration has proposed. 

The federal government has a special responsibility for maintaining the Northeast Corridor, says Jeff Davis, a senior fellow at the Eno Center for Transportation, because it took over the property and created Amtrak to run it. For the first phase of Gateway, Amtrak and the states are asking the federal government to pick up half the cost of $13 billion in projects. But the grant program they applied to has only a $2 billion budget.

It’s true that Trump talked repeatedly in his campaign about the need for Congress to pass a new infrastructure building law, and his administration has made clear its hopes to promote projects that use private capital to build them. The Gateway Program could foreseeably have big private components. But it seems unlikely that the private sector would pick up most of the federal share. Plus, it’s unclear when, if ever, Congress will begin work on a new infrastructure package.

This spring, though, the situation at Penn Station got even worse. Three trains derailed there in a five-month span. The derailments happened in the space, called an interlocking, between the Hudson tunnels and the passenger platforms, where trains spread out to their destinations. The malfunctions prompted Amtrak to shut down several tracks for repairs, cutting back service for each of the commuter railroads as well. Cuomo admonished commuters to expect a “summer of hell” because of the repair work. The warning overstated how bad the commutes would be, but the emergency repairs underscored the fragility of the system.

Cuomo had a chance to bring his concerns to Trump in September at a White House meeting with Christie and members of Congress from New York and New Jersey. Participants in the meeting described it as positive. But this time it was Cuomo who seemed impatient. “While the White House meeting was productive, it was inconclusive,” he told reporters. “My position is very simple: It’s critical. It’s vital. It’s overdue. It’s been talked about for too long. You should have had a shovel in the ground from the day you said go.” 

This story has been updated.

Dan is Governing’s transportation and infrastructure reporter.
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