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December 3, 2010 1:45 PM

NJ Gov Taps Patton Boggs to Fight Tunnel Funds Payback

Posted by Brian Baxter

UPDATES: 12/10/10, 11:30 a.m. New Jersey Transit's board of directors has approved the hiring of Patton Boggs to fight the FTA's demand that the state repay $271 million over the canceled ARC tunnel project. 12/17/10, 10:26 a.m. Transportation Secretary Ray LaHood has offered to return $128 million of the $271 million that federal authorities are charging the Garden State.

New Jersey governor Christopher Christie has hired Patton Boggs to fight a federal government demand that the Garden State repay $271 million spent on a commuter rail tunnel project he canceled for the second time in October.

Slated for completion in 2018 at a cost of $8.7 billion, the ARC tunnel--the acronym stands for Access to the Region's Core--was one of the country's largest public works projects and a major component of a nearly 20-year-long effort to improve rail transportation between New Jersey and Manhattan.

But Christie--claiming the state could not afford the project and that his advisers predicted it could rack up $5.3 billion in cost overruns--called a halt to construction.

A Republican and former U.S. attorney for the District of New Jersey, Christie has likened the ARC tunnel to Boston's Big Dig--a similarly massive public works initiative that was marked by cost overruns and endless construction. Despite $600 million already having been spent on the ARC tunnel, the only part of its nine-mile span to be built so far is a support structure on the New Jersey side of the Hudson River.

Christie's cancellation of the project prompted the Federal Transit Administration to give New Jersey a choice: either return $271 million in federal funds already spent on the project by December 24 or file an appeal explaining why the money shouldn't be repaid. The ultimatum left Christie furious and eager for a showdown with the FTA.

"It's not surprising that the same federal transit agency that had no clear way to pay for cost overruns of a project already hurt by poor planning and inequitable cost-sharing is relying on bureaucratic power plays to wring even more money from New Jerseyans," said a statement by Christie. "New Jersey and its taxpayers should not be responsible for these costs, which is why our administration is making every effort to fight the FTA's unreasonable demands."

Bloomberg reports that New Jersey's Law and Public Safety Department reviewed "multiple firms" before selecting Patton Boggs for the work, a decision the agency said it based on costs and merits. The firm is taking a discount on its normal rates by charging New Jersey $485 per hour for its work on the assignment, according to Bloomberg. Patton Boggs managing partner Stuart Pape told Bloomberg that it's too early to discuss potential strategies for challenging the FTA.

"We're going to be working with the New Jersey Transit folks to get our arms around the facts," Pape, a 61-year-old native of Fort Lee, N.J., told Bloomberg by telephone from his office in Washington, D.C.

The Newark Star-Ledger notes that Patton Boggs infrastructure and public policy partner Rodney Slater is a former U.S. transportation secretary and that political law partner Benjamin Ginsberg has represented state Republican legislators in a pending redistricting battle.

On the other side of the Hudson, the firm is currently representing the City of New York and its contractors in a suit brought by first responders in the collapse of the World Trade Center on 9/11. Last month more than 95 percent of plaintiffs opted-in to a settlement fund created to help those suffering from respiratory ailments and other injuries as a result of the disaster.

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