If New Jersey Governor Christopher J. Christie’s unilateral decision to cancel the ARC tunnel stands, it will undoubtedly become a case study for infrastructure investments across the country. The decision-making process, public outreach, and possible outcomes of this $8.7 billion transit link between New Jersey and midtown Manhattan will be carefully scrutinized—and indeed, that process has already begun.
As of Friday, October 8, the project received a two-week stay of execution upon the request of the Obama administration’s Transportation Secretary, Ray LaHood. The result of this review—which many expect will end in Christie making good on his threat to divert New Jersey’s $2.7 billion tunnel contribution to bolster the state’s faltering Transportation Trust Fund—will have profound repercussions upon Christie’s long- and short-term political prospects, on the fate of public transit in the New York region, and on how future infrastructure projects in America will be planned, financed, and built.
At the root of Christie’s rationale for cancelling the Access to the Region’s Core project, known as ARC—a years-in-the-making, multi-agency effort to connect the New Jersey Meadowlands to Penn Station via two new single-track tunnels—is a campaign pledge in which Christie vowed to make tough decisions and run like a one-term governor, instead of acting expediently for short-term political gain. He also pledged to operate the state government with maximum transparency. The upshot is his belief that New Jersey’s taxpayers cannot bear the risk of the ARC tunnel’s escalating cost. Since the project was halted on September 13, New Jersey officials have studied various scenarios and counseled the governor not to take that chance. This four-week examination seems to contradict a recent five-month intensive review by federal and local staff that reported on all aspects of the budget, including inflation, and found them properly accounted for. Was Christie’s team looking at the same information? That bids for the $600 million already spent have come in under budget seems to support the latter assessment. Other arguments made by the governor are inconsistent: The Port Authority pledged in 2009 to be responsible for a share of cost overruns, which contradicts Christie’s argument that New Jersey would be solely responsible. And in July, the governor seemed prepared to spend up to $1 billion to bail out the largely private investment at the Xanadu development in the New Jersey Meadowlands, claiming that “there is already a $2 billion investment in that building and I'm not ready to give up on it." Future analysts will ask what calculus makes private investment today worthy of a bailout when a public investment is not.
What will the economic outcomes of Christie’s decision be, and what bearing will it have on him? If he uses New Jersey’s $2.7 billion tunnel contribution to bolster the Transportation Trust Fund—barely a third of which he can use, according to funding formulas—he will forfeit the $6 billion match by the Port Authority and the federal government. He will also forfeit the $18 billion increase in property values to many New Jersey communities (only one of the many benefits that an independent study by the Regional Plan Association forecasts). Shoring up the Trust Fund with what remains of the ARC project (which may serve the fund for a year at best) will be scrutinized for its rate of return when compared to ARC. In a political climate where the suggestion of raising taxes is a form of political suicide, where will the Fund look for replenishment when the diverted ARC dollars run out? How will this square with Christie’s campaign pledge regarding quick political fixes?
One lasting lesson that will surely come from Christie’s cancellation will be that for projects of this scope to succeed, they must have overwhelming public support. By the time it broke ground, ARC had become so complex that when Christie first announced a suspension of construction, even the local Sierra Club supported him and lampooned the project as the “tunnel to Macy’s basement” (they have since recanted). The necessity of infrastructure projects like ARC may seem self-evident to some, but they are abstractions to the general public and must be convincingly and perpetually sold to them. It might need ongoing viral support on Facebook or other social networks. Or perhaps simple analogies should be regularly transmitted via the media to support the project at critical junctures. One such analogy (dropping a few zeroes) to explain ARC’s value might go like this: Using the tunnel allocation to pay off the Trust Fund is like using your pension contribution to buy a $30,000 car today. In doing so, you sacrifice the $60,000 two-to-one contribution from your employer. After ten years, your contribution would have yielded at least $180,000, but the car you purchased then is now worth close to zero. Might putting its value in terms like these make it clearer?
The overriding question that future infrastructure planners will ask is how any projects of significant scope can be executed in America today if one individual can stop decades of carefully laid plans. They will ask why the federal government, when it has a majority stake in a project like ARC, doesn’t have a say. Governor Christie purportedly declined to speak with Transportation Secretary LaHood minutes before his announcement but did speak with him the following day, which resulted in the decision’s delay. It is unclear at this point what LaHood had to offer, but some are guardedly hopeful that an agreement on oversight and overages can been reached. Whatever the outcome, future planners and legislators will consider whether a governor with the least money on the table should have so much unilateral power.
Will the tunnel ever be completed if Christie stands by his October 8 decision? Many claim that it is hard to imagine repeating the effort again, especially if its prospect can be snatched away at the last minute. Optimists might argue that the 2nd Avenue Subway was restarted after many decades’ cessation. Others may hope that if the governor runs like a one-term governor and the voters make sure of it, this project will resume, but this is highly uncertain, as other states are already angling for the ARC funds. Or perhaps this isn’t over; perhaps this is all a high-stakes gambit on Christie’s part to get the federal government to ante in on overages. If this does occur, and Christie changes his mind after the stay, his temporary pause could go down in history as a necessary step to apply the highest level of scrutiny to protect the taxpayer’s investment, and Christie’s reputation for fiscal responsibility will be affirmed and may even be appreciated by constituents beyond his base. But if his real motive is to plunder ARC to shore up the Trust Fund, and his opponents can make this allegation stick and claim that he opted for the quick political fix, history may add Christie to the pantheon of his many predecessors in the governor’s office who sacrificed New Jersey’s future for short-term political gain.
Given that ARC would have built an extension to the existing Penn Station (albeit below it and at some remove), it is difficult to detach current events from the memory of the last Penn Station’s demolition in 1963. One only needs to see the many shrines built into the architecture of NJ Transit’s new entrance on 7th Avenue to know that its loss is still being actively mourned after 50 years. Its demise was then labeled “an act of civic vandalism,” but it fueled enough outrage that it led to the creation of the Landmarks Preservation Commission and ultimately to Grand Central Terminal’s salvation from a similar plight. That Grand Central was saved by a proto-viral response of concerned citizens (and celebrities like Jackie Onassis) affirms an important lesson that ARC’s planners may have not remembered: Support for projects like ARC must be argued with conviction. In 1963, Ada Louise Huxtable eulogized Penn Station when she wrote that “we will probably be judged not by the monuments we build but by those we have destroyed.” What would she say today of the difficulties we have of even getting past the planning stage?