Maryland will receive $125 million in long-sought federal funding to expand the Howard Street Tunnel under downtown — a project that would eliminate a critical bottleneck to the Port of Baltimore’s booming container business, officials said Monday.
The money is more than $100 million less than the state and CSX Transportation — the successor to the Baltimore & Ohio Railroad that owns the freight tunnel ― asked for, and it’s not clear how the two will make up the difference.
The state and the railroad have proposed spending $466 million, including the federal grant, to increase clearances through the century-old tunnel and at 22 bridges between Baltimore and Philadelphia so freight trains can carry shipping containers stacked two-high.
Gov. Larry Hogan celebrated the award of the grant, which lawmakers learned about Monday from U.S. Transportation Secretary Elaine Chao.
"This grant will help us break a coast-wide bottleneck, further bolstering our economic success at the Port of Baltimore and across the state," the Republican governor said in a statement Monday afternoon.
Hogan said the money, which is being awarded through the federal Infrastructure For Rebuilding America Grant Program, will allow the tunnel’s reconstruction to move forward. The state submitted an application for the grant in March.
Maryland and CSX had asked the federal government for $228 million and pledged to make up the rest of the cost — $147 million from the state and $91 million from the Jacksonville, Fla.-based railroad.
The tunnel expansion likely will involve lowering the rail bed in many places or raising the tunnel ceiling where possible. The project is expected to double the tunnel’s freight capacity, remove trucks from highways and bring more than half a billion dollars in benefits to 25 Eastern states.
U.S. Sen. Ben Cardin said Chao called him to personally inform him of the grant and was “extremely complimentary” about the project’s merits. The U.S. Department of Transportation did not respond to a request for comment.
Cardin, a Maryland Democrat, called the grant a “game changer” that finally could move the tunnel expansion project forward after years of fits and starts.
U.S. Rep. Elijah Cummings, a Baltimore Democrat, called the grant an “essential linchpin” to enable the project to move forward.
“This project has been a priority for me and for the entire delegation for many years,” Cummings said in a statement. “Despite the many challenges we have faced, we have worked closely with the State of Maryland and CSX to support an effective public-private partnership that will be able to modernize this critical piece of infrastructure.”
The grant is expected to further boost the port of Baltimore’s container traffic, which has spiked since the 2016 opening of an expanded Panama Canal. The larger canal allowed quicker access to the U.S. East Coast for super-sized container ships carrying goods from Asian manufacturers.
The port has moved more than 10 million tons of general cargo in each of the past three years.
Much of that growth has come in containers, the truck-sized metal boxes that can move readily between ships, trains and trucks and carry many consumer goods. A record 1.02 million 20-foot-equivalent-units of containers, the standard measure because they generally come in 20- or 40-foot sizes, crossed the docks at the port of Baltimore’s piers last year.
Tensions also have arisen between Ports America Chesapeake and the port’s union longshoremen, who were ordered back to work by a federal judge in October after management claimed they walked off the job, forcing a shutdown of the container terminal.
The tunnel expansion could benefit Tradepoint Atlantic, the company that is redeveloping the former steel mill site in Sparrows Point into a hub for logistics, warehouse and manufacturing businesses. Tradepoint’s rail network connects to the CSX line — one of the company’s key selling points to prospective tenants.
Aaron Tomarchio, Tradepoint’s senior vice president, said the additional funding for the tunnel represents “a big step forward” for the port of Baltimore and the regional economy.
“Tradepoint Atlantic and countless other businesses and jobs rely on having a highly functional and efficient regional freight network, and fixing this bottleneck from the 1890s is deservedly a top priority,” Tomarchio said in a statement.
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Rainwater breached the tunnel as recently as last week after a water main broke nearby and caused a sinkhole near Howard and Pratt streets downtown. CSX had to pump floodwater and silt from the tunnel and reduce trains passing through it as a safety precaution. The sinkhole also disrupted light rail service and snarled traffic downtown.
The railroad reversed course and came back to the table, albeit offering less money, in December after a meeting between the railroad’s new CEO, Jim Foote, and the Maryland congressional delegation.
The grant is a sign that the federal government recognizes the importance of the Howard Street Tunnel expansion to the region, said Donald C. Fry, president and CEO of the Greater Baltimore Committee, a group of business and civic leaders.