The massive Gateway Tunnel rail project will likely resume next week after receiving the remaining $205 million in funding withheld by the Trump administration since October, the Gateway Development Corporation (GDC) said Wednesday.
GDC said the feds unfroze $127 million it was owed in reimbursements for the $16 billion undertaking to replace a decaying rail tunnel connecting New York and New Jersey beneath the Hudson.
“Gateway Development Commission (GDC) has received the full reimbursement owed to us from the federal government and now has more than $205 million available to fund work on the Hudson Tunnel Project,” GDC said in a statement. “We are working with our contractors to deploy these funds to resume work as soon as possible.”
“Letters will be sent to contractors today, and construction activities are expected to resume next week,” GDC added, referring to a work stoppage triggered by the funding freeze that has dragged on for nearly two weeks.
The vital project will replace a 116-year-old two-tube passage, dubbed the North River Tunnel, which serves hundreds of thousands of Amtrak and New Jersey Transit commuters each weekday. Without the new tunnel, officials warn the existing one is in imminent danger of collapsing — an event that would snarl rail traffic not only between the Empire and Garden States, but also throughout the region.
The sum the feds unfroze on Feb. 18 includes the remaining $98 million of the original $205 million — the amount it withheld late last year — as well as another $29 million for January, according to Gov. Kathy Hochul’s office.
Hochul, who first revealed the news in a social media post, attributed the Trump administration’s move to both a Manhattan federal judge’s ruling ordering it to release the funds and a phone call in which she pleaded her case directly to the president on Monday night.
“I have told the president repeatedly that when he targets New York, we will fight back and we will not back down,” Hochul said in a Feb. 18 statement. “Today’s progress is significant, but we need certainty that Gateway funding will remain in place for the duration of the project. The federal government has a legal obligation to fully fund Gateway, and New York will accept nothing less.”
State Attorney General Letitia James said the feds’ action was the direct result of her joint lawsuit with New Jersey Attorney General Jennifer Davenport seeking the emergency restraining order, which U.S. District Judge Jeannette Vargas granted earlier this month. Their suit argued the funding freeze was illegal, alleging it was motivated by Trump’s desire for political retribution, rather than a violation of the law, and that it would cause great harm to both states.
“This funding freeze was unlawful from the start,” James said. “We took swift action in court, and now every dollar that was illegally withheld has been released. This morning, New York and New Jersey received the remaining nearly $130 million owed for the Gateway Project, finally unlocking all the funding that had been frozen.”
Despite celebratory statements from GDC, Hochul, and James, all three said they would keep a watchful eye to ensure the feds disburse the remaining roughly $11 billion they committed to the project under former President Joe Biden.
“We will remain vigilant to ensure this funding continues uninterrupted, so that workers and commuters are never again left in limbo by the president’s targeted and unlawful whims,” James said.
While the Trump administration has paid some of the money it owes, it is still fighting in two court cases to sustain its funding freeze — the one brought by the state attorneys general and another brought by GDC in the Federal Court of Claims.
The feds appealed Vargas’ granting of a TRO to a higher court, the Second Circuit Court of Appeals, which kicked the decision to a motions panel that will meet next week.
The Trump administration began withholding the funds near the beginning of the last government shutdown because it said it needed to review the project’s compliance with new diversity, equity, and inclusion rules around contracting. GDC officials have said they have provided the feds with all of the information they requested in the review.
