The Gateway Development Commission (GDC) has filed a lawsuit against the federal government to release contractually-obligated grant and loan funds for the Hudson Tunnel Project (HTP).
GDC has used available funding sources and credit to keep the project going while federal funding disbursements are paused. Last week, however, it announced that if additional funding was not available by February 6, the project could be halted, resulting in the loss of nearly 1,000 jobs.
The majority of the project’s budget is funded by federal grants and more than US$1bn worth of construction and investment has already been made into building the new rail tunnel.
Despite its contractual commitments to fund the project, the federal government has suspended the release of its funds since October 1, 2025. GDC says the lawsuit makes clear that the shifting explanations the government has provided for the breach are unlawful.
It says it has worked with its federal partners to meet their requirements for restoring funding and has responded to each request for information about the project’s federally-mandated Disadvantaged Business Enterprise programme and provided documentation that the project complies with the Administration’s latest regulations.
New York governor Kathy Hochul said. “For months, Donald Trump and his enablers in Washington have illegally withheld committed funding for this project in a brazen act of political retribution intended to hurt New Yorkers, putting thousands of union jobs and billions of dollars in economic benefits at risk. I said New York would fight like hell to keep this project moving and today, that is exactly what we are doing.”
Senator Chuck Schumer said the lawsuit made it clear President Trump had illegally frozen congressionally appropriated and contractually obligated funding.
“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,” he said.
GDC says pausing construction would result in the immediate loss of nearly 1,000 jobs. An extended pause would put at risk approximately 11,000 jobs on the current projects, as well as the 95,000 jobs and US$19.6bn in economic activity the HTP was anticipated to generate overall.
