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DOT vs NJ Over ARC Tunnel Money - Documents

Friday, April 29, 2011 - 05:58 PM

(Alex Goldmark, Transportation Nation) In a "final agency determination," the Federal Transit Administration today told  New Jersey the state has to pay back the full $271 million NJ spent of federal money digging out the beginning of  the ARC transit tunnel  under the Hudson River.  NJ Gov. Chris Christie canceled the project in October, halting the boring, and filling in the hole -- after which US Transportation Secretary Ray LaHood demanded the money back.

NJ filed paperwork contesting the bill in January and has hired a well known Washington law firm to fight it as well.   As of March, the Newark Star-Ledger reported, NJ Transit had already paid a third of a million dollars  in legal bills.

It had seemed possible that New Jersey would only be asked to pay half the $271 million in late January.

But now, LaHood is sticking to his guns, telling Christie he has to pay back all the money.  Christie is expected to continue to resist paying for the ARC tunnel.

Catch up on our past coverage of the money fight here.

Here's the response to the decision-posted below-from Kevin Robert, a spokesman for Governor Christie:

"We disagree with the FTA’s conclusion and its continued efforts to bill New Jersey taxpayers for completed work that will be of substantial value to future transportation projects not just in New Jersey, but in the Northeast corridor. Furthermore, New Jersey was unable to move forward with the ARC project for reasons beyond the State’s control -- billions of dollars in unaccounted for cost-overruns and re-estimates of project costs late in the process only continued to increase New Jersey’s already heavy financial burden. For now, we will review the decision before determining next steps moving forward."

Here's the full 52 page final decision of the Federal Transit Administration on the debt collection action, New Jersey Transit Corporation, Access to the Region's Core Project (ARC). (PDF)

And the two page letter from Transportation Secretary to NJ Senator Frank Lautenberg, (Dem.), a supporter of the ARC project.

Dot Arc Repayment

Lautenberg also released this statement.

SENATORS LAUTENBERG AND MENENDEZ STATEMENT ON ARC REPAYMENT DECISION

WASHINGTON, D.C. – U.S. Senators Frank R. Lautenberg (D-NJ) and Robert Menendez (D-NJ) released a statement today following the U.S. Department of Transportation decision that the State of New Jersey must repay the full $271 million in federal funding spent on the cancelled Access to the Region’s Core (ARC) tunnel.

“This is an unfortunate situation.  We worked hard to get the parties to negotiate a fair resolution of this conflict.  However the state's outside lawyers pursued an all or nothing approach, which brings substantial risk to New Jersey taxpayers.  Given the high stakes involved in this matter, we hope the state's approach is ultimately successful,” the Senators said.

Following Governor Christie’s decision to cancel the trans-Hudson tunnel project, Senators Lautenberg and Menendez called on Transportation Secretary Ray LaHood to ease the financial impact on the State.  In response to the Senators’ efforts, Secretary LaHood agreed that if the state repaid $271 million, the federal government would return nearly half the money by placing $128 million in New Jersey’s Congestion Mitigation Air Quality (CMAQ) account for mass transit and emission reductions projects. However, the Governor’s legal team pursued a different course.

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