Amtrak takes control of Union Station via eminent domain

Amtrak is using eminent domain in an attempt to take control of Union Station, a move the passenger railroad says is necessary to complete the long-planned expansion and modernization of the second-busiest railroad hub. popular in the country.

The historic station, a landmark in the heart of the district, is owned by the United States, but is leased and operated by other entities. In a lawsuit filed Thursday in the District Court for the District of Columbia, the railroad sought control of the real estate interest held by Union Station Investco LLC, a subsidiary of New York-based Ashkenazy Acquisition Corp., which holds the station sublease rights. until 2084.

Amtrak said it hopes to take over operations and management of the train concourse to continue multi-billion dollar investments at the station, including a long-planned concourse extension and major tunnel repairs. which passes under the station and which “seriously needs repairs”. or replacement. »

USI will continue to operate the station until the court rules that possession and control can be awarded to Amtrak, the railroad said. Ben Ashkenazy, chief executive and president of Ashkenazy Acquisition Corp., did not immediately respond to a request for comment in a message left for his aide.

“We need to advance some long-delayed capital and sound repair projects so we can improve the station and strengthen station infrastructure,” said Dennis Newman, Amtrak’s executive vice president for strategy, planning and accessibility. “An improved Washington Union Station is truly key to our mission.”

Newman said Amtrak believes it is better placed to manage and operate the station because of its decades of experience. Amtrak has stations in New York, Chicago, Philadelphia and Baltimore. “We have the unique abilities to be the steward of a facility, a very large facility, like Union Station in Washington,” he said.

The station, which opened in 1907, is known for its marble floor and coffered ceiling and includes restaurants and shops. It is a major hub for intercity and commuter rail (Maryland MARC and Virginia Railway Express), subway, and local and intercity buses.

Amtrak already owns the station’s platforms and tracks. In 1985, the US government authorized the Union Station Redevelopment Corp. (USRC) nonprofit overseeing ownership. Union Station Investco has sublease rights through the USRC.

Amtrak currently subleases a small portion of the station—about 13.4%—to USI for its train operations, which includes the concourse just before passengers walk to the platform. The carrier wants to take about 425,000 square feet of the station, which includes all of the property except for the parking garage.

Amtrak’s filing argues that acquiring control of the lease will allow the railroad to repair the rail tunnel “so that safety and stability are maintained.” Speedy completion of this project is essential to replace structurally deficient girders, girders and columns, the railway said, and avoid collapse, which would have significant effects on train travel. Amtrak said it also plans to expand ticketing and waiting areas, improve accessibility and passenger flow, and add more passenger amenities while increasing capacity to meet on future demand.

Amtrak said that it “lacks both the space and the control to make much-needed improvements” to Union Station, which carries more than 5 million rail passengers a year and is a major stop in the Northeast Corridor, the backbone of the country’s passenger rail system. The station was designated a historic landmark by the district in 1964 and listed on the National Register of Historic Places in 1969.

Amtrak said in court documents that “poor maintenance and lack of capital investment…has plagued the station over the years.” The filing cites a 1981 incident in which heavy rain caused part of the roof to collapse in the passenger waiting area. USI acquired its lease in 2007.

About $75 million in deferred maintenance is needed at Union Station, according to the court filing, which cites a recent assessment of the building by USI and the Federal Railroad Administration. But, he says, there are “insufficient funds available through the Capital Maintenance Funds” in the USI sublease.

Amtrak’s filing also cited its own plan to overhaul the infrastructure supporting the tunnel. In 2017, Amtrak projected that it could have completed major basement repairs by that year. He said he began negotiations with USI over the plan in 2018.

But USI dragged its feet, says Amtrak in its filing: “USI’s repeated rejections of Amtrak’s proposals related to Amtrak’s requirements for this project mean that this critical project [state of good repair] the project was not actually started.

Beverley Swaim-Staley, president and CEO of USRC, declined to comment on Thursday. The FRA, which provides oversight, did not respond to a request for comment.

Amtrak’s board of directors last month approved a resolution approving the acquisition of the property interest, saying the move would allow Amtrak “to invest directly in [Washington Union Station] in a more efficient and effective manner, thereby maximizing the benefit of intercity and public transit users. The resolution was unanimously approved by the board, which includes a nominee from Transport Secretary Pete Buttigieg and FRA Administrator Amit Bose.

Amtrak said it made an offer to USI to buy its lease right for $250 million on April 6, but said the company did not respond to the offer by the April 13 deadline.

Amtrak made the $250 million payment to the court on Thursday, “the amount of which is believed to be just compensation,” according to the court filing, which says the amount was determined by an independent real estate appraisal. The court will determine the appropriate price and if and when Amtrak can take over.

As of Thursday evening, USI had not responded to Amtrak’s filing in court.

Amtrak also notes that USI recently faced two foreclosure actions: although they were later overturned, they underscore the “significant financial risk” of USI’s ongoing management and operations. Financial difficulties could prompt USI to try to sell its stake in Union Station “to an unknown person or entity,” Amtrak said in its filing.

Amtrak’s move comes amid a push by the railroad and USRC for a multibillion-dollar expansion and overhaul of Union Station that would add concourses and tracks, more sales options retail, a new train concourse and modern parking and bus facilities. The proposed expansion, a private and public investment of at least $10 billion, calls for a transformation of the nation’s second-busiest rail hub by 2040.

Joe McAndrew, who oversees transportation issues for the Greater Washington Partnership, made up of general managers between Richmond and Baltimore, said Amtrak’s decision is a “step forward” for the redevelopment of Union Station, which will is deteriorated.

“The company’s ownership of the decades-long lease for the station building should accelerate the rate at which we can realize the benefits of redevelopment of this critically important infrastructure asset to the region,” McAndrews said.

Amtrak has been planning for years to redo its concourse to double capacity, improve accessibility and reduce clutter. But this project, which was to start in 2019, is on hold. Officials said they wanted to create a modern, brighter space for the 100,000 daily intercity, commuter and local travelers who pass through Union Station.

Michael Laris and Ian Duncan contributed to this report.