Gateway project at Penn Station gets $300M federal grant to build critical box tunnel beneath Hudson Yards

A nearly $300 million grant will allow construction to begin early next year on a critical project beneath the Hudson Yards as part of the long-stalled Gateway project linking Manhattan's Penn Station to New Jersey.

The $292 million grant, secured by Senate Majority Leader Chuck Schumer in the $1.2 trillion Infrastructure Investment and Jobs Act, will cover the federal share of a $600 million project to build the concrete casing of a box tunnel running from the far west side of the city to Penn Station. 

New Jersey and New York have each pledged 25% of the needed dollars to fund the rest of the tunnel work although the Gateway Development Commission also is pursuing additional federal grants to reduce the shares paid by the two states.

The first two sections of the concrete casing were completed years ago, but the third was held up by the Trump administration, which expressed little interest in the work. Last year, the administration of President Joe Biden, a longtime Amtrak rider, greenlit funding to complete the project.

In a statement, Schumer said the funding — the largest award from the Department of Transportation's "Mega" grant program — will "energize" the Gateway Tunnel project.

“This massive amount of funds will mean construction on a critical element of the project — the box tunnel — can begin in 2023," Schumer said. "Despite needless political delay because of the former president, the Gateway project, which our economy depends upon, is now advancing and seeing the federal dollars that fuel major construction."

The box tunnel is being built on the real estate company Related’s Hudson Yards Western Railyard property, starting at 10th Avenue at 30th Street and continuing through 11th Avenue and 29th Street, officials said.

Amtrak is in the final stages of an agreement with Related to proceed on the work and all environmental approvals have already been secured, Schumer said.

"The Mega program … will support large, complex projects that are difficult to fund by other means and likely to generate national or regional economic, mobility, or safety benefits," the federal Department of Transportation said in a statement.

Gateway, first proposed a decade ago, would construct a 2.5-mile tunnel linking Penn Station to Secaucus station in New Jersey, and also rehabilitate a 110-year-old tunnel across the Hudson River that was badly damaged by Superstorm Sandy. The two projects total about $14.1 billion.

The box tunnel, officials said, is necessary to protect the tracks and right of way leading to the new Hudson River tunnel.

"Building on this year's momentum, 2023 will be when the Gateway Hudson Tunnel Project moves from planning to reality," said Kris Kolluri, chief executive officer of the Gateway Development Commission in a statement. "This grant is a major step toward making that happen."

Gateway, which is expected to open around 2035, aims to make several improvements along Amtrak's busy Northeast rail corridor.

Although only Amtrak and New Jersey Transit would use the new passages, experts have said the project will reap benefits for the Long Island Rail Road, which operates the majority of trains into and out of Penn Station, by freeing up extra capacity in the station.