The now revived project of Xanadu, an homage to Coleridge’s palace of Kubla Khan or perhaps the more sinister palace of opulence of Welle’s Citizen Kane, is a 2.4 million square foot entertainment complex that includes an indoor ski slope, a skating rink, and an indoor water park. The project that was defunded? The ARC Tunnel, an infrastructure project (map below) that promised to connect New Jersey and Manhattan through a series of capital construction and improvement to stations and tracks throughout both states. The deal that Gov. Christie gave the new developers, who are renaming the complex “American Dream@Meadowlands” which I can only assume is an homage to the conflation of resurgent patriotism and Twitter, a charitable financial package outlined here:
The new developer, the Triple Five group, will invest more than $1 billion in the seven-year-old project. And Gov. Chris Christie has agreed to provide low-interest financing and to forgo most sales tax revenue for a period of time… The administration is offering a financing package of $180 million to $200 million, with the developer able to use most of the sales taxes they collect to repay the loan, rather than contributing the money to the state budget. (NYT, 4/28/11)
The decision is fair enough in the political sense; Gov. Christie decided to offer a private development company a sweetheart deal because it was taking over a project that had been orphaned by its previous developer who had already dumped more than $1 billion into it. Government investing in private industry is as old as organized government in general, but the timing of these two events is leaving many in the transportation world at odds with New Jersey government.
The ARC tunnels finances are significantly more involved than the project-formerly-known-as-Xanadu; projects put it somewhere between $9 billion and $13 billion, a number rivaled only by Boston’s fiscally disastrous but functionally fantastic Big Dig Project. However, because of this project’s transformative potential the US Department of Transportation was offering nearly $4 billion in Federal grants, a record for an infrastructure project. That wasn’t the only funding that Gov. Christie was going to receive from the DOT either:
In addition, [Secretary of Transportation Ray] LaHood essentially offered to write Christie a blank check from his department’s Railroad Rehabilitation and Improvement Financing program for a multi-billion-dollar loan to cover cost overruns and the $775 million Portal Bridge South leading into the new tunnel. (Link to story here)
The remaining $4 to $7 billion is nothing to be scoffed at of course, with Boston on the hook for Big Dig payments for the foreseeable future Gov. Christie was right to look hard at the fiscal realities of the faltering economy and diminishing tax receipts. Projections, even if taken with a grain of salt, throw considerable weight behind building the project however, for reasons ranging from increased home values for corridor residents to the creation of 44,000 new permanent jobs in the region. The ARC tunnel could have reduced commuting time considerably as well, and as Bostonians well know, the travel time between suburban home and downtown Boston pre-and-post-Dig are worth any cost overruns.
It seems almost inappropriate in a time of forced and severe austerity for millions of Americans that Gov. Christie has decided to fund what amounts to a temple to profound consumption and, just a year before, defunded a project that would have improved life and finances for millions. Though if people aren’t happy with the defunding of the ARC tunnel, they can always go skiing in Xanadu.