Gateway sues Trump administration over freezing Hudson River tunnel funding

The commission in charge of the $16 billion effort to build a new set of train tunnels under the Hudson River sued the federal government Monday over the Trump administration’s move to freeze funds for the work, which officials say could force construction to stop at the end of the week.

Work on the tunnel, which has job sites in New York and New Jersey, needs roughly $200 million in federal funds to continue, according to the lawsuit, which was filed by the Gateway Development Commission in Federal Claims Court.

The work stoppage — which officials warned could come as soon as Friday — could result in thousands of people losing their jobs, according to the lawsuit. The lawyers wrote that halting the work would leave “unfinished work sites with massive holes in the ground.”

Without the ability to pay contractors, the lawyers wrote, Gateway would be stuck with astronomical costs in delays and penalties. It would also threaten the commission’s ability to restart the work in the future if the funding does come through and undermine “the credibility of the federal government as a reliable contracting partner,” the lawsuit states.

The Trump administration halted funding for the tunnel, which is designed to be used by Amtrak and NJ Transit, on Oct. 1.

The feds claimed at the time that they needed to review Gateway’s policies that require a certain percentage of contracts to go to disadvantaged businesses. White House officials ordered the funding halted on the first day of last fall’s government shutdown.

Gateway leaders said they have submitted all the documents requested as part of that review, but criticized the feds for changing the goal posts.

Trump administration officials indicated in a statement last week that the funding would only be restored if Democrats fully funded the U.S. Department of Homeland Security.

The lawsuit argues the U.S. Department of Transportation violated the terms of the grants and funds by unlawfully withholding the money for the tunnel. Funding was approved during the Biden administration and is made up of a collection of grants and loans.

White House representatives did not respond to a request for comment.

If the project shuts down entirely, 11,000 union workers on the job could be out of work, project officials said.

Even if work stops, the lawsuit claims Gateway would still need to spend $15 million to $20 million per month just to secure the existing work site and move the heavy equipment to a secure location.

The current Hudson River rail tunnels used by Amtrak and NJ Transit are 116 years old and suffered from saltwater damage in 2012 during Hurricane Sandy. Under current plans, the old tubes won’t be repaired until the new ones open for service in 2035.

New Jersey Gov. Mikie Sherrill, who campaigned on ensuring Gateway stays fully funded, said she supported the lawsuit

“I made a commitment to fight for Gateway and New Jersey’s economy, which is why we’re taking action to hold the Trump Administration accountable for breaching its contract,” Sherrill wrote in a statement.

Sen. Chuck Schumer of New York — who’s spent more than a decade fighting to fund the project — pointed out in a statement that halting the project would hurt trade union workers, many of whom voted for Trump.

“As this lawsuit makes clear, President Trump has illegally frozen congressionally appropriated and contractually obligated funding for Gateway,” Schumer wrote in a statement. “This lawsuit would be unnecessary if President Trump did the right thing for New York and New Jersey and lifted his arbitrary freeze. Gateway is the most important infrastructure project in the country, and tens of thousands of union workers depend on it moving forward.”