NEW YORK CITY—Will the ambitious multi-billion dollar Gateway tunnel project suffer the same fate as the Access to the Region's Core (ARC) tunnel project years before—a victim of escalating construction and development costs?

A key facet of the Gateway project, aimed to increase commuter rail service between New Jersey and New York, is the development of a new Amtrak station (Penn South) near Penn Station. At today's prices, Amtrak would spend somewhere from $769 million to $1.3 billion to acquire the block bounded to the north and south by 31st and 30th streets, and to the east and west by Seventh and Eighth avenues, according to The Record.

The new station is critical, Amtrak officials say, because if the new Hudson River tunnels are built without a new station, they warn there will be no room at Penn Station to place the additional trains.

“You cannot take advantage of the additional capacity of new tunnels without expanding the physical capacity of Penn Station,” says Drew Galloway, Amtrak's deputy chief of planning for the Northeast Corridor.

David Widawsky, who directed the planning to build the ARC tunnel that was killed by New Jersey Gov. Chris Christie in 2010, says, “They're delusional. I don't think they can build it,” adding that the Penn South site was abandoned early on when the ARC team realized the property was too expensive.

“It was eliminated in the first cut,” Widawsky said. “The real estate on that block is just prohibitively expensive.” See story in The Record.

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