Federal funding for the $16 billion Gateway rail tunnel between New York City and New Jersey, which had been suspended for more than four months, began to flow again on Friday after lawyers for the Trump administration told a federal judge on Friday that it would comply with her orders.
The suspension had left the government owing about $205 million to the tunnel’s planners, the Gateway Development Commission, and forced a halt to work on the project last week, as well as the layoff of about 1,000 union workers, the commission said.
The federal government had pledged more than $11 billion toward the tunnel project, which has been billed as the most urgent major infrastructure project in the United States. But at the end of September, administration officials said they would stop the flow of that funding while they reviewed the project’s contracts for compliance with revised federal regulations.
In recent weeks, the Trump administration shifted its explanation for the prolonged suspension of funds. In discussions with Senator Chuck Schumer of New York, President Trump suggested that he would release the funds in exchange for support of the renaming of two transportation hubs — Washington Dulles International Airport in Virginia and Pennsylvania Station in Manhattan — after him, people familiar with those talks said. Mr. Schumer said he rejected that idea.
Asked this week about that demand and why Mr. Trump wanted his name on those buildings, his press secretary, Karoline Leavitt, said “Why not?”
After the work came to a halt at the end of last week, the states of New York and New Jersey sued the U.S. Department of Transportation, arguing that they had been harmed by the layoffs and disruption. Judge Jeannette Vargas of the Southern District of New York ordered an end to the suspension by 5 p.m. on Feb. 12. But the Gateway Development Commission and Democratic elected officials complained that the funding had not resumed by midday Friday.
The disruption evoked comparisons to the abrupt cancellation of a previous iteration of a rail tunnel under the Hudson River between New York and New Jersey: In 2010, Chris Christie, then the Republican governor of New Jersey, pulled the plug on the ARC tunnel just as construction was getting underway because he said he feared his state would bear big cost overruns.
At a rally in Secaucus, N.J., on Friday morning, laid-off Gateway workers implored Mr. Trump to restore the funding so that they could return to work.
“This is not fair to me and to my family,” said Adam Pezanowski, a member of Local 472 of the Laborers’ International Union of North America.
Mr. Pezanowski said he had been rigging the parts of the first of two massive tunnel-boring machines before the shutdown. “Me and all my brothers and sisters of Local 472 want you, Mr. President, to release all of these funds.”
In a hearing before Judge Vargas on Friday afternoon, lawyers for the government said that about $30 million of the overdue payments was on its way to the commission and the rest should be paid by early next week. Delivery would be delayed by the need to relay the funds through the Treasury Department and the fact that Monday is a federal holiday, the lawyers said.
Just before 5 p.m., Mr. Schumer said that the commission had received the first chunk of the money.
“The first $30 million of federal funding for Gateway has arrived and we eagerly await the remaining money to be sent as quickly as possible so construction can resume,” Mr. Schumer said.
Kathy Hochul, the Democratic governor of New York, said: “Today we made progress. $30 million has finally been released, and a court-ordered report will force transparency on the remaining funds. But the job isn’t done. Full funding must be restored now.”
The commission said in a statement that it had received an initial disbursement of $30 million and expected to receive the full $205 million. “Construction remains paused for now and we are working with our contractors to plan how to deploy these funds in the most effective way and get workers back on the job to resume some construction as soon as possible,” the statement said.
The Transportation Department referred questions about how much it would send to the commission and when it might be received to the Department of Justice, which did not respond to a request for comment.
The Transportation Department had appealed Judge Vargas’s decision to the U.S. District Court of the Second Circuit. A ruling on that appeal is pending, with a hearing scheduled for Feb. 23.
The White House did not respond to a request for comment.
Patrick McGeehan is a Times reporter who covers the economy of New York City and its airports and other transportation hubs.
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