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Fifteen Stories Under

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Fifteen Stories Under

Why New York’s East Side Access railroad project has taken so long and cost so much Autumn 2015
Infrastructure and energy
New York

In 1998, New York senator Al D’Amato announced that he had secured federal dollars to help bring the Long Island Rail Road to Grand Central Terminal—at a cost of $3 billion—by 2010. It’s now 2015. The expansion—called “East Side Access”—will cost at least $10.2 billion, with New York State paying most of the bill. It won’t be done before late 2022. The 48-year-old Long Island commuter who joked in 1998 that he “hope[d] to be at the ribbon-cutting ceremony when I retire” was predicting the future.

How did East Side Access morph from something that was supposed to be relatively easy, if you listened to D’Amato and Governor George Pataki 17 years ago, into the most expensive transit project in America? Cost overruns and delays on big projects are common. But New York State’s Metropolitan Transportation Authority, which builds and operates the subways and rails in and around New York City, hasn’t just run over its allotted budget and projected timeline; it has obliterated them. The unexpected billions that New York now has to pay are harming the state’s ability to build even more important transit infrastructure to serve the city’s growing population.

The East Side Access story isn’t just about a colossal construction project. It’s also about the political and cultural mistakes that New York made over more than a half-century in building crucial infrastructure. If we can’t learn from those mistakes, we’re doomed to repeat them—and we can’t afford to repeat them.

A popular myth holds that politics-as-usual created East Side Access. D’Amato, this view runs, cooked up the scheme to push up real-estate prices on Long Island, generate construction contracts, and enrich himself and his cronies. But the idea existed long before the Nassau County–based senator revived it in the mid-1990s. More than a half-century earlier, in 1930, a New York Times letter-writer, Trumball Marshall, suggested a solution for “the very serious and growing problem of . . . congestion in the Grand Central and Pennsylvania station[s].” This rail traffic, he wrote, was bound to worsen as “the new Empire Building and some other now contemplated are loaded with daytime tenants.” Marshall’s proposal: a midtown “union terminal,” welcoming passengers from all the city’s commuter railroads. With such a station, nobody would have to get off a train and then travel a great distance across town. “Nearly all of this could be done underground,” he predicted.

Marshall’s idea of building an east midtown terminal for Long Island Rail Road (LIRR) commuters made sense. At midcentury, New York City was losing people to the suburbs. Long Island’s population exploded from 600,000 before World War II to 2.6 million by 1970. “We were growing like crazy,” says Tom Suozzi, who served as Long Island county executive from 2002 to 2009. “The high point was in the seventies.” Many of these new suburbanites commuted back to the city. Ridership on the LIRR soared from 47,600 daily in 1930 to 74,000 daily by 1955. The railroad remains the nation’s busiest. By the late 1950s, the notion of the beleaguered commuter was already a cliché. A Times cartoon featured “Mortimer Commuter,” who justified the distance he traveled to and from his massive new faraway house by saying that “the train ride is so relaxing—except when the train breaks down or is otherwise delayed.” In 1959, the paper lamented the “housewife” drinking “too many martinis” and dissolving into tears because her husband is “late again.”

The Long Island commuter may have been the grumpiest of all. As one said in 1948, “We of the [Long Island] R.R. talk about the R.R.”—and not, like their less delayed, less crowded Westchester counterparts, about baseball or the kids. Westchester commuters’ trains sped them straight to Manhattan’s East Side, where the white-collar jobs were. Many of Long Island’s earliest postwar commuters worked on Manhattan’s West Side in the garment district or in other blue-collar industries, so they didn’t yet need an East Side terminal. But as they and their children moved up in the world, their jobs shifted to the East Side. After arriving at Penn Station, they now faced a much longer commute across town, wasting 40 more minutes a day.

But New York never opened an East Side terminal when Long Islanders most needed one. In fact, New York was discouraging investment in trains and stations by the 1930s, instead building highways, bridges, and tunnels for the era of the automobile. Constructed between 1940 and 1972, the Long Island Expressway became a critical link in the suburb’s growth. Car and truck traffic coming into Manhattan from the east, including from Long Island, doubled between 1930 and 1960. Moreover, the railroads, unlike the roads, had been built by private companies, which continued to operate them. Losing long-distance travelers to the airlines and saddled with bad union contracts, the railroad companies were bankrupt by midcentury.

Just as the LIRR reached its nadir of service, New York realized that it had made a mistake in ignoring the rails. By the early 1960s, the papers were running front-page articles on New York City’s congestion crisis. In 1966, Governor Nelson Rockefeller took over the railroad (as he was also doing with the subways), starting New York on a multibillion-dollar investment plan to reverse decades of neglect. “We wanted to have better access to the East Side,” recalls Lee Koppelman, Long Island’s veteran master planner and an informal Rockefeller advisor. “The basic problem was that the [Long Island] Rail Road belonged to Penn”—the old, private-sector Pennsylvania Railroad, which had built Penn Station—“and Penn was in receivership.” After hearing from the planners, Koppelman says, Rockefeller determined: “We’re going to create this [government transit] agency, and we’re gonna take over the railroad.”

The state revived the idea of bringing Long Island commuters directly to Manhattan’s East Side. In 1967, voters approved a $2.5 billion bond for the new state-run transit system. Rockefeller man Bill Ronan, who’d become the first head of the MTA, said that some of the money would go toward a “terminal in the Grand Central area,” which would “place 65 percent of the people who come into Manhattan” from Long Island “within 10 minutes of their place of work.” (Much of the rest would go to a new Second Avenue Subway, also long delayed.) New York City’s subways and the LIRR would share the proposed new tunnel under the East River, running from Queens to Manhattan’s East Side, and split the $75 million construction cost. (Currently, the LIRR shares tunnels under the East River with Amtrak; LIRR riders bound for the West Side of Manhattan will still travel this way.) At the Manhattan end of the new tunnel, the East Side terminal—cost unspecified—would open by 1975.

The precipitous decline of New York intervened. The state spent the 1970s digging the tunnel, but construction mishaps and delays drove costs to $330 million. Meantime, nobody could figure out exactly where to build the Manhattan terminal. Many East Siders opposed it; then-congressman Ed Koch argued that a Third Avenue terminal would cause too much foot traffic; and Grand Central’s structural foundations made adding new tracks extremely difficult. Arguments simmered until Mayor Abe Beame pointed out in 1977 that “there was no . . . money now to build a terminal anywhere.” The city’s ballooning social-services costs, along with New York State’s rescue of Gotham from near-bankruptcy in 1975, left nothing for infrastructure.

East Side Access, along with the Second Avenue Subway, looked dead. By the early 1980s, the state had finished its new tunnel under the East River—and sealed it up. Editorialists derided it as a “tunnel to nowhere” and a “wine cellar.” But East Side Access wasn’t dead; it was only asleep. In 1991, when Long Island politicians started to talk about finishing the job, Sheldon Schachter of the Long Island Commuters’ Council replied, “for God’s sake, do it, don’t study it again.”

It would take the biggest economic boom in modern history for East Side Access to wake up. But first, the call went out for more studies. In 1998, at the behest of D’Amato, Pataki, and local pols, the MTA produced a “major investment study” explaining why East Side Access was still essential. With New York City’s job growth outpacing Long Island’s, the study concluded, more people would have no choice but to commute to Manhattan.

New York wasn’t planning for future growth, though, so much as scrambling to catch up with past growth. Penn Station was “near operational capacity,” the MTA warned—that is, it was full. (Penn remains heavily congested today, though the number of LIRR passengers coming through during the morning rush has fallen since 1995.) And Amtrak, which had taken ownership of Penn Station, was about to offer new higher-speed train traffic through Manhattan, encouraging more people to take the train instead of fly between Boston and Washington. Long Islanders increasingly found themselves stuck under the East River, waiting for a platform to open up at Penn Station so that they could get to work. To bypass Penn, those commuters could take the railroad into Queens and then hop on the subway to get to Manhattan. But even in 1998, before subway usage neared today’s record levels, the Number 7 train from Queens was “operating above capacity as well,” the MTA noted. Peter Kalikow, the MTA’s chairman from 2001 to 2007, remembers looking at one of the earliest annual reports, from 1966, of the MTA’s predecessor authority. “They were talking about Second Avenue Subway and East Side Access,” he says. “I thought, this should have been done 30 years ago. But we haven’t done a damn thing.”

To the politicians, it was a cinch. New York had already built that new rail tunnel under the East River. The MTA had even opened part of it to subway traffic in 1989, improving service from Queens. All the MTA had to do was finish the job—doing tunnel and track work in Queens and Manhattan, creating some storage and maintenance room for trains, and building the Manhattan terminal, which, the MTA had decided, it would blast out of a cavern deep underneath Grand Central.

But even getting started took years. In 1998, Senator D’Amato boasted about the $20 million earmark he had secured for East Side Access from President Bill Clinton’s tech-boom budget, though the amount represented a small fraction of the predicted price tag. Congresswoman Carolyn Maloney of Manhattan’s East Side and other city politicians wanted federal money, too, for the Second Avenue Subway, and got the Long Island contingent’s backing for it in exchange for their support for East Side Access. As New York wrangled over how many federal dollars it would get, warning signs emerged that East Side Access would cost much more than initially promised. By 1999, even before construction started, the bill had fattened to $4 billion, and the Federal Transit Administration didn’t see how New York could pay for its half of the project. In 2000, the New York Times opined that the MTA plan, which largely relied on debt, was “financially unsound” but that it should go forward, anyway. Federal and state budget surpluses were there for the taking, the paper argued.

By 2004, the MTA had already spent nearly $1 billion on East Side Access, the projected price tag was exceeding $5 billion, and everybody was beginning to see that the project was far more complex than originally assumed. The MTA would have to work closely with Amtrak, the federal railroad, to build new track and related infrastructure in Queens, but agreeing on how to do that work was proving difficult. It was taking so long to get the feds to sign off on their funding that one contractor walked away from an early bid, saying that it couldn’t guarantee its price any longer. Federal transit officials warned again about “the eight-year project duration and associated potential for cost increases.” But after a supposedly exhaustive risk analysis, which concluded that the MTA was 95 percent certain to finish the project on time, with virtually no statistical chance that it would be delayed past 2013, Washington signed off on the funds. By 2006, the price tag was up to $6.3 billion, with the feds now on the hook for $2.6 billion and New York paying the rest. Nearly ten years later, the MTA is a little more than half done, having committed $7 billion already. It won’t finish the job until the next decade.

Make no mistake: the physical work that the MTA has done on East Side Access is impressive, even extraordinary. Contractors have bored eight miles of tunnels in Queens and Manhattan. They’ve built train yards and repair houses in the Bronx and Queens. And 140 feet beneath Grand Central, they blasted an entirely new, eight-track rail terminal out of the bedrock. They took out the resulting 1.5 million cubic yards of muck—75,000 dump trucks’ worth—through the rail tunnel to Queens and then to New Jersey for recycling. They brought 30,000 tons of steel back in. They opened a new midtown park above a $100 million ventilation plant. In Queens, the MTA has been building an entire new support system—37 of 96 planned switches so far, plus tracks, signals, and the like—for the new railroad line, even as hundreds of trains whiz by every day. Contractors dug beneath Northern Boulevard without stopping traffic.

Yet why were the cost and time estimates so wildly off? First, when it comes to big construction projects, no one should believe initial cost projections. The numbers that D’Amato and Pataki tossed about during the late 1990s were mere guesses. The MTA always knew that the East Side Access work that it had to do in Queens with Amtrak would be a massive undertaking, for example—but, under political pressure, it put out cost projections before even talking with Amtrak. Financial gimmicks made things murkier. When top brass fretted that costs were getting too high before construction started, they suddenly found “cost savings” of $1.5 billion, sometime in the cloudy future. “We had no idea how much it was going to cost,” a former MTA official says. “How could we say we were going to save money?”

Nevertheless, several factors have made East Side Access extremely expensive. Critics point to what they call East Side Access’s “fatal flaw”: building under Grand Central Terminal. Bringing LIRR trains directly into Grand Central would have saved the MTA billions—not least the expense of carting out all that muck. And Grand Central, unlike Penn Station, can handle more commuters. George Haikalis, a civil engineer and transportation planner who runs the Institute for Rational Urban Mobility, says that the MTA was solving “institutional problems,” not transit needs, by “going deep.” Officials of Metro-North—the commuter rail for northern suburban commuters, which uses Grand Central—and the LIRR have never gotten along. Bringing the LIRR directly into Grand Central would have forced the two rail lines to work together closely, or even merge. So the MTA decided to leave Metro-North alone and bury the LIRR, whose commuters someday will have to take deep escalators up to the surface.

Yet the MTA had valid reasons for going deep. In a study prepared for critics of the “deep cavern,” Delcan, a Canadian engineering firm, said that building new tunnels under Park Avenue and adding new tracks to Grand Central—the alternative to building under the terminal—would have meant serious disruption. Metro-North commuters from Westchester County and Connecticut would face cuts to peak service during construction, which would have lasted for several years. The extent of the disruption was unclear—the MTA predicted “crush loads” on weekdays, while the Institute for Rational Urban Mobility thought that the impact wouldn’t be as bad. Either way, though, the MTA wasn’t going to inconvenience a core part of Manhattan’s commuter base, even if it meant saving billions. In a similar vein, the MTA had no real choice but to do most of its construction work from Queens, bringing materials through the tunnel to Manhattan. Even though this approach made doing that work much harder, midtown Manhattan’s office-building owners would not have put up with construction trucks and debris for years on end.

Any accounting of the project’s costs and missed opportunities must acknowledge another stubborn reality: the cheaper, faster option would have constrained the New York region’s capacity to grow. Once East Side Access was complete, says Mysore Nagaraja, the MTA’s capital construction boss from 2003 to 2007, “you would really reduce capacity for both railroads by almost 25 percent.” Building new tracks into Grand Central instead of the new terminal under it would have limited the LIRR’s service to 21 trains an hour during the morning rush—fewer than the two dozen or more that the MTA thinks necessary. And taking space away from Metro-North would mean “little room for future [Metro-North] traffic growth,” the Delcan report notes. Yes, the MTA could have addressed some potential congestion issues through better management, but the direct-to-Grand-Central option would have eventually produced the same kinds of constant delays and disruptions that Penn Station commuters already endure.

Technical problems have abounded, adding to costs and delays. Tunneling under Northern Boulevard in Queens required freezing the ground so that it wouldn’t collapse. But the MTA accepted a too-optimistic bid for this tricky work; the losing bidders—with far more experience—had a better sense of the true cost. On the Manhattan side, sprayed-on concrete wouldn’t stick to the walls, and falling concrete killed an employee—26-year-old Michael O’Brien—in 2011. That tragedy (East Side Access’s only fatality so far) caused the MTA to suspend concrete work for three weeks. Coordination has been a significant problem, too. The MTA told contractors doing its Manhattan tunneling that they could blast some of the tunnel instead of boring it. But when they submitted a blast plan, the MTA nixed it and forced long negotiations because of Metro-North’s objections. That work took 85 months instead of 48.

New York also failed to realize that launching three major construction projects at the same time—East Side Access, the Second Avenue subway, and the Number 7 train extension—even as the city was working on a water tunnel beneath Manhattan, would make all the projects more expensive. The MTA, having built almost nothing for half a century, lacked the expertise to manage multiple difficult initiatives simultaneously. And competition for construction labor grew fierce. Experienced American contractors didn’t bid on East Side Access’s key tunneling contract in Manhattan, for instance, because they knew that there were only so many qualified tunnel workers in the city, and they were busy. “For the first year or two of the project, East Side Access tunneling was slow,” one former MTA official recalled. Sure enough, when the water tunnel required fewer workers, more experienced teams shifted to East Side Access, and the speed of the boring machines “doubled and even tripled.” The terrorist attacks of September 11 added two more huge projects for the MTA to manage—the Fulton Street subway hub and the South Ferry station downtown—which, along with the rebuilding of the World Trade Center, pushed construction costs even higher.

East Side Access’s biggest single cost is labor. Of the project’s expense, 43 percent—$4.4 billion—will go to wages. The work is dusty, dark, and difficult, and Washington’s and New York’s union-friendly “prevailing-wage” rules mean that everyone is paid well and gets great benefits, too. Carpenters doing heavy work make $50 an hour, plus an extra $47 hourly in benefits. Insulators bring home $64 an hour, plus $32 in benefits. Electricians make $54 an hour, plus $50 in benefits. Workers earn double time on Saturdays.

Union rules also mean that senior workers make key decisions over shifts and staffing, harming efficiency. In Britain and France, only the “miners”—or tunnelers—work in unions similar to America’s. Contractors hire other workers largely as they wish. The jobs pay well but not American-construction-union well. In New York, everyone works by the same union rules, which include hourly wages and staffing requirements that can mean 25 workers per tunnel-boring machine, compared with a dozen or so in a nonunion state and as few as five in countries such as Norway. When you’re paying a lot for labor—2,162 construction workers during the project’s busiest point, in 2012, plus 467 employees in management and design—you pay even more when the schedule goes awry.

East Side Access’s most intractable labor problem has been the inability of the MTA and Amtrak to collaborate effectively on Amtrak’s property in Queens. Amtrak, the MTA, and Amtrak’s federal railroad unions bickered for years over who should do what, as the clock was running and people were getting paid. The MTA’s Queens work was necessary—without it, the LIRR won’t be able to run more trains through Queens to Manhattan without getting in Amtrak’s way. (The MTA is wisely taking a once-in-a-century chance to untangle some of Amtrak’s infrastructure from its own, cutting wait time for commuters.) And the work is challenging: the MTA’s contractors can’t shut down the tracks for eight-hour labor shifts, so workers have to steal snatches of time—sometimes just 45 minutes—in between trains, usually at night and on weekends.

Yet this work still has taken—so far—five years longer than it should have, adding hundreds of millions of dollars to the bill. To take one egregious example, Amtrak employees must provide “force protection” to contractors at the site—that is, they’re supposed to protect construction workers from moving trains and other dangers. Fine, but Amtrak, busy on other projects around the region and still recovering from Hurricane Sandy, can’t find enough force protectors to do the job. Union seniority rules also mean that Amtrak has difficulty finding workers on weekends, when the MTA can take advantage of the sparser train service.

Amtrak union workers added to the delays in other ways. Several years ago, they convinced a labor arbitrator that they should be doing construction on the project that the MTA wanted its own contractors to do. But as the federal government pointed out in 2012, though Amtrak unionists won the argument, the workers solved the problem by “opt[ing] to supply twice the personnel than is necessary.” Some worked, some watched, and with so many people jammed into a confined work space, construction proceeded “at half speed,” the feds said. One contract involving Amtrak that was supposed to take two years and cost $137 million has cost $297 million and is finally nearly finished in its fifth year.

Problems often beget more problems. As the MTA spends more in one place than expected, it must spend less somewhere else, until the governor and state lawmakers can wring more money out of taxpayers for the state authority. So it defers its expenses by delaying contracts or by breaking up big contracts into smaller pieces. Such steps make everything more expensive over the long term. Contractors struggle to coordinate, with one’s tardiness meaning that another can’t start on time. Meanwhile, East Side Access’s “burn rate”—what it costs to keep the lights on—is millions of dollars monthly.

What are the lessons of East Side Access? First, politicians’ efforts to secure federal money are often misplaced. Even today, project veterans, political or otherwise, boast of the $2.6 billion they got from the feds. But as costs have ballooned, the MTA’s portion of the bill has expanded to 75 percent, not the 50 percent that the politicians once envisioned. New York’s political class would have done better to focus on keeping project costs low. Second, though money is critical to infrastructure, lack of money isn’t always the issue. All the funding in the world wouldn’t have solved the dysfunction between the MTA and Amtrak. Third, big projects don’t need more checks and balances. East Side Access has at least a half-dozen overseers, from the Federal Transit Administration on down, generating thousands of pages of reports yearly. The feds warned in these reports that the lousy relationship between Amtrak and the MTA was costing money, yet they could do nothing about it.

New York can improve the way it approaches contracting: lesson four. The MTA could eliminate coordination problems among contractors by awarding a few large contracts instead of lots of small ones. East Side Access could have been broken into big contracts on the Manhattan side and the Queens side, with firms bidding to do both design and construction work, rather than splitting the work up. The winning contractors would take the risk that the work would go over time and budget. “Coordination between contracts is a major issue,” argues Nagaraja, “especially on megaprojects. What we are seeing is not working.” But even the most efficient contractor has to grapple with New York’s pay mandates and work rules. Risks need to be made more reasonable for contractors to assume them.

Finally, leadership matters. It’s significant that East Side Access’s biggest champion wasn’t a governor but a senator—one who left office shortly after securing a bone for the project. Since then, no governor—to whom the MTA is accountable—has engaged himself with East Side Access. And for most of this time, the MTA has suffered from its own instability. After he left in 2007, Kalikow points out, the authority had three chairmen in three years—largely because New York had three governors in that time. “People think that stuff doesn’t affect their lives, but it does.”

Still, if East Side Access succeeds, few people will remember that it cost $10.2 billion (at least) and took a quarter of a century to finish. When the new Manhattan terminal opens, Long Island will become a more attractive place to live. Westchester residents might benefit, too, with Metro-North taking over some of the LIRR’s vacated space at Penn Station. If downstate New York (including the suburbs) is to keep growing, it needs to get denser. East Side Access will help make that happen.

To see why the perfect can be the enemy of the pretty-bad-but-good-enough, consider the competition. East Side Access could (at last) open for business just as the tunnel that brings New Jersey commuters to Manhattan across the Hudson River falls apart. Five years ago, Jersey had its chance to build a new tunnel and to extricate itself from some of its own dependence on Amtrak. But Governor Chris Christie canceled the project, saying he was worried about its cost. Sometime in the next decade, Long Island commuters may happily be taking their three-minute escalator ride up from beneath Grand Central into the light, while New Jerseyans fume in darkness under the Hudson.

Research for this article was supported by the Brunie Fund for New York Journalism.

Photo: About 140 feet beneath Grand Central, workers have blasted an entirely new, eight-track rail terminal out of the bedrock. (MARY ALTAFFER/AP PHOTO)

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