Hudson Yards and Gateway tunnel come to a head in NYC

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Dive Brief:

  • Two major construction projects in New York City — the $25 billion Hudson Yards and a critical portion of the $24 billion Gateway Program — are at a crossroads, Crain’s New York Business reported.
  • Developer Related Cos. is gearing up to deck over the western part of Hudson Yards, where the final stretch of the Gateway program’s Hudson River tunnel connecting to the city’s Penn Station is to be built. The urgency has state officials scrambling for the $440 million needed to complete the tunnel.
  • Engineering concerns require the deck and tunnel be constructed simultaneously. If Related stays on schedule and the tunnel is not financed, a $250 million investment in earlier portions of the Gateway tunnel would be fruitless for lack of the vital Penn Station link.

Dive Insight:

Hudson Yards and the Gateway Program stand to be major boons for the city’s economy. A study last year from Related Cos. and Oxford Properties Group found the Hudson Yards project alone will add $18.9 billion to the city’s gross domestic product by the time it’s complete, accounting for roughly 2.5% of that measure annually.

That project has been a major contributor to the current construction boom in the city, accounting for 16% of new construction jobs there between 2011 and 2014. When work is finished on the massive mixed-use development, it is expected to have created more than 7,000 construction jobs.

While the Gateway Program relies heavily on federal funding, it is now eyeing the private sector for support with the future of its federal financing in question based on the Trump administration’s proposed budget plans. In addition to the Hudson River tunnel, the program also includes new bridges connecting New York and New Jersey and the conversion of the Farley Post Office Building near Penn Station.

Officials warn that the new Hudson River rail tunnel must be completed as soon as possible in the event that one of the two tubes comprising the existing, damaged tunnel be closed.

Gateway Program officials have said they’d be open to public-private partnerships for their roster of projects, including the Hudson River Tunnel, and they’ve already spurred interest from the private sector.

The presence of a private-sector partner could become critical for projects seeking federal funds, with Transportation Secretary Elaine Chao announcing last week that cities and states that secure private financing for their infrastructure projects could have priority for federal dollars under the administration’s pending $1 trillion infrastructure spending proposal. The Gateway Program took the No. 1 spot on a list of high-priority infrastructure projects compiled by the Trump administration earlier this year.


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