Feds Ordered To Unfreeze $16B In Funds For NY Tunnel Project, Judge Rules

NEW YORK CITY — A federal judge ordered the Trump administration to unfreeze $16 billion in funding for the Gateway Tunnel project on Friday.

The decision will allow work to resume at the site. Construction may have been forced to shut down if payments weren't released.

Judge Jeannette Vargas ruled on a lawsuit filed New York Attorney General Letitia James and New Jersey Acting Attorney General Jennifer Davenport. They had argued that the funding freeze was unlawful and for payments to resume.

Vargas wrote in her decision that plaintiffs had "adequately shown that the public interest would be harmed by a delay in a critical infrastructure project."

New York Attorney General Letitia James called Vargas' decision a "critical victory for workers and commuters in New York and New Jersey."

"I am grateful the court acted quickly to block this senseless funding freeze, which threatened to derail a project our entire region depends on. The Hudson Tunnel Project is one of the most important infrastructure projects in the nation, and we will keep fighting to ensure construction can continue without unnecessary federal interference," she said in a statement.

The Gateway tunnel project aims to build a new rail tunnel under the Hudson River between New York and New Jersey that would carry Amtrak and other local transit trains.

In addition, they are repairing an existing 116-year-old rail tunnel that was damaged by Super storm Sandy in 2012. Construction work began in 2023 and gained federal funding after approval from then-president Joe Biden.

On Friday, it was revealed that President Donald Trump offered to unfreeze billions of dollars in funds for the tunnel project on one condition — Democrats in Congress had to agree to rename Penn Station and Washington Dulles International Airport after him.

Trump made the offer during a meeting last month with Minority Leader Chuck Schumer, CNN and Gothamist reported.

Schumer, who was meeting with the president in an effort to save the project, immediately rejected the offer, according to the reports.

The reconstruction of Penn Station, now being spearheaded by Amtrak, is closely linked to the Gateway Tunnel project. The new tunnels being built under the Hudson River will serve the station.

A separate lawsuit filed against the Trump administration by the Gateway Development Commission, the panel overseeing the construction project, and their case is expected to be heard on Tuesday.