Infrastructure
New York / New Jersey

Governor Christie of NJ Endorses Tunnel Four Years After Killing Project

Burgess COMMENTARY

Peter Burgess

Christie Endorses Tunnel Four Years After Killing Project

Photographer: Andrew Harrer/Bloomberg Chris Christie, governor of New Jersey.

Four years after killing a $12.4 billion tunnel that would have doubled commuter capacity to Manhattan, New Jersey Governor Chris Christie has endorsed another stab at rail expansion as part of a plan to remake the Port Authority.

If Christie hadn’t stopped the Access to the Region’s Core project that began in 2009, mass-transit relief would have come as soon as 2018. Now he supports an approach, with new oversight by the Port Authority of New York & New Jersey, that has no dedicated funding and would take at least 10 years.

Train travel garnered a brief mention last month in a 99-page report by a panel recommending fixes for the bi-state operator of regional airports, cargo docks and New York City river crossings. That’s attention enough as the transportation agency, with a $7.8 billion annual budget, tries to distance itself from a year of scandal over political patronage.

“The report is more than a glimmer of hope -- it’s the beginning of an intelligent role that the Port Authority can play on this,” said Martin Robins, 72, director emeritus of Rutgers University’s Alan M. Voorhees Transportation Center and the dashed tunnel’s original project director. “I have to commend even Chris Christie because he approved the report. He’s trying to make amends for some of his past behavior with the Port Authority.”

Bridge Scandal

It’s been a year since e-mails linked lane closings at the authority’s George Washington Bridge to aides of Christie, the 52-year-old Republican considering a 2016 run for president. The fallout from four days of gridlock in Fort Lee, a town whose Democratic mayor declined to endorse Christie for re-election, led to ongoing federal and legislative investigations. Christie has denied any role in the closings.

In May, amid published reports of wider dysfunction and political maneuvering within the 93-year-old authority, Christie and New York’s Democratic Governor Andrew Cuomo formed a panel to recommend changes at the agency. On Dec. 27, they endorsed the panel’s proposals, which include reorganizing management and concentrating on its core mission of transportation rather than side ventures in real estate.

“The congestion created by the limitations on Trans-Hudson access creates a ripple effect across the Port District and stands as a major impediment to further economic growth,” according to the panel, comprised of three Port Authority board members and an attorney for each governor.

By 2030, commuter trips into Manhattan from New Jersey are expected to double, according to the panel’s report. A “Port Authority-led regional planning effort is needed to critically explore opportunities to increase capacity,” including additional tunnel capacity, the report said.

‘Bad Judgment’

As they accepted the recommendations, Christie and Cuomo vetoed legislation passed in both states to reduce political influence at an agency where top staff are appointed by the two governors, party loyalists land on the payroll and motorists have little influence on toll rates.

New York Assemblyman Jim Brennan, a Democrat from Brooklyn, criticized the vetoes, saying the public demanded more scrutiny of the authority “as abuses and scandals accumulated.”

“This is bad judgment on the part of two governors where both houses of each of their legislatures passed something overwhelmingly,” said New Jersey Senate Majority Leader Loretta Weinberg, a Democrat from Teaneck.

Old Tubes

Whatever the fate of the legislation, the Port Authority remains the first and only agency willing to coordinate New York, New Jersey and the federal government on a Hudson River tunnel effort, said John Degnan, Christie’s appointee as the authority’s board chairman.

“By virtue of endorsing the report, both governors have supported the idea that the Port Authority take a lead in assisting collaborative planning,” Degnan said in an interview. He expects a regional working group to meet within five months.

The only direct train access between New Jersey and Manhattan for Amtrak and New Jersey Transit is via a pair of century-old tubes under the Hudson River. Those tunnels have no more than 20 years of service remaining, Joseph Boardman, president and chief executive officer of Amtrak, the U.S. national rail operator, said at a conference in April.

The tunnels operate at peak capacity and delays are routine. The waits will worsen as each tube closes for days or weeks at a stretch for Hurricane Sandy repairs.

Cost Overruns

The promise of long-term relief fizzled in October 2010 when Christie, who took office in January of that year, canceled the federally led ARC tunnel project. New Jerseyans, with the highest U.S. property taxes, would be on a “never-ending hook” for their share of the project, 70 percent of as much as $14 billion, Christie said.

The decision was criticized by the late U.S. Senator Frank Lautenberg, a Democrat, as “one of the biggest public-policy blunders in New Jersey history.”

A U.S. Government Accountability Office review released in April 2012 found potential costs to be lower, at $12.4 billion, with New Jersey paying 14.4 percent.

The congressional investigator didn’t account for all costs associated with the project, including a $775 million bridge to be built in conjunction with the tunnel, Michael Drewniak, a Christie spokesman, said after the report came out. New Jersey also would have been responsible for overruns, he said.

Borrowing Rates

Christie’s decision scuttled the creation of at least 200,000 jobs, according to the GAO. The bulk of funding for ARC is no longer available, as Christie steered $4 billion of earmarked money toward other transportation spending.

ARC would have cut passenger transfers by 97 percent and taken an average 23 minutes off each trip, according to the GAO. It also would have been financed at historically low rates.

Yields on 20-year general obligation bonds, which are used to finance roads, bridges and schools, fell to 3.56 percent last week, a two-year low, and close to the lowest level since the 1960s, according to a Bond Buyer yield index. Issuing $12.4 billion of 20-year bonds today would cost $21.2 billion in principal and annual interest over the life of the debt. That’s a savings of $5.6 billion from the average 5.8 percent rate during the past five decades.

Kevin Roberts, a Christie spokesman, referred questions about the tunnel to previous statements made by the governor.

Amtrak Proposal

Christie has said that while he recognizes the need for expanded commuter capacity, he would support a plan only when New York state and New York City share in the costs. He also objected to ARC’s design, which terminated the tunnel two blocks from Pennsylvania Station, in the area of Macy’s landmark Herald Square store.

Gateway, a $16 billion alternative tunnel proposed by Amtrak in February 2011 that would take at least a decade to build, lacks capital funding. The rail operator, though, has $30 million available this year for planning and design work, according to Craig Schulz, an Amtrak spokesman.

Among all the state and federal agencies with a stake in a tunnel, enough financial resources exist to at least start building a third tube, “which is the need right now,” said Joseph Clift, former director of planning for the Long Island Rail Road and the legislative director of the Lackawanna Coalition, a Millburn, New Jersey-based non-profit group that lobbies for rail commuters.

“I would never have thought that four years from when ARC was terminated, we’d have nothing in place,” Clift, a 64-year-old Manhattan resident, said by telephone.

To contact the reporter on this story: Elise Young in Trenton at eyoung30@bloomberg.net

To contact the editors responsible for this story: Stephen Merelman at smerelman@bloomberg.net Stacie Sherman, Alan Goldstein