Gov. Christie says federal offer to credit N.J. $128M for ARC tunnel project is 'good start'

Christie said he hasn't heard directly from U.S. Transportation Secretary Ray LaHood on reducing the tab Watch video

Saed Hindash/The Star-LedgerGov. Chris Christie during a press conference in Trenton on 12/16/10.

TRENTON — Gov. Chris Christie said he will review the offer from the federal government that would relax the $271 million bill for the cancellation of the rail tunnel under the Hudson River.

In a letter dated Tuesday to U.S. Sen. Frank Lautenberg, (D-N.J.), federal Transportation Secretary Ray LaHood offered to return $128 million of the amount owed to a fund to be used for future New Jersey transportation projects.

"I would say that offer was a nice start, and we'll continue to talk," Christie said at a press conference Thursday.

Christie said he has still not heard from LaHood about the offer.

"I'm always happy to talk to Secretary LaHood," Christie said, adding that he wanted to discuss the tunnel with the federal administration instead of through the press.

Christie canceled the Access to the Region's Core, or ARC, in October, citing the possibility the project could run more than a $1 billion over the original estimate. Because the federal DOT had already done work on the project, they presented New Jersey with a $271 million tab for the completed work.

Christie, calling the charge political, hired Washington D.C-based power firm Patton Boggs, a duel law and lobbying shop, to fight the bill. New Jersey will pay Patton Boggs $485 an hour to fight bill.

Lautenberg, a Democrat who was criticized by Christie for not supporting his decision to cancel the tunnel, asked LaHood to reduce the cost to New Jersey. LaHood, in a letter to Lautenberg and U.S. Sen. Robert Menendez, agreed to an arrangement that would still require the state to pay the $271 million, but would put about half of that back into transit projects.

The tunnel issue has become highly political between Christie, a Republican, and Lautenberg and Menendez, both Democrats.

“We can’t un-dig the Governor’s $600 million Hole to Nowhere, resurrect the squandered $3 billion federal investment or recapture the golden opportunity to provide commuter relief," Menendez said in a statement of the offer by LaHood. "However, every bit of protection for New Jersey taxpayers counts, including what we have just delivered. We will continue to work constructively with the federal government to minimize the fiscal damage from the state backing out of the contract.”