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After months of negotiations, the state of Maryland and CSX Transportation have come up with the more than $100 million in additional funding needed to move forward with the expansion of the Howard Street Tunnel — a long-sought project expected to remove a freight bottleneck and significantly boost the Port of Baltimore’s booming shipping container traffic.
Maryland won a $125 million federal grant in July for the project, which would increase clearances through the century-old tunnel and at 22 bridges between Baltimore and Philadelphia to allow trains to carry containers stacked two high. But the grant was $103 million less than the state had requested for the $466 million project. Republican Gov. Larry Hogan pledged to negotiate with the railroad, which owns the tunnel, and other, unnamed stakeholders to come up with the rest.
The state and the railroad have “identified a variety of state, private and federal formula sources to close the funding gap,” Maryland Transportation Secretary Pete Rahn wrote a Nov. 25 letter to U.S. Transportation Secretary Elaine Chao.
Maryland had previously proposed providing $147 million for the work, with CSX committing $91 million. Rahn’s letter did not break down how much each entity, or any other stakeholders, will pay.
“I am pleased to report that our efforts have paid off,” Rahn wrote. “At this point, the $466 million project is fully funded.”
CSX spokeswoman Cindy Schild declined to say how much the railroad has committed to the project “until the state of Maryland makes their public announcement.” The funding levels will not be disclosed until a kickoff meeting in the next few weeks, said Erin Henson, a spokeswoman for the Maryland Department of Transportation.
The railroad thanked Hogan for “working with the private sector to find a successful resolution to move the project forward" and said it appreciated the support of leaders in Baltimore and the state’s congressional delegation.
Hogan, through a spokesman on Thursday, pointed to the economic benefits the tunnel expansion will bring.
"After years of tirelessly pursuing funding, our administration is pleased to be moving forward on this critical project, which will help create more jobs in Baltimore City, bolster Maryland’s economic resurgence, and break a coast-wide rail bottleneck,” the spokesman, Michael Ricci, said.
[ Related: Maryland to seek more money from CSX, others for Howard Street Tunnel ]
CSX has not always supported the expansion of its tunnel. In 2017, the company abruptly walked away from the project, saying it “no longer justifie[d] the level of investment required from CSX and our public partners.” CSX later returned to the table after the death of then-CEO Hunter Harrison, who had cut the company’s earnings forecast and offered a $1.5 billion stock buyback to increase the price of shares, leaving less money for infrastructure projects.
The Maryland congressional delegation pushed both the federal transportation department and CSX to stay committed to the tunnel expansion “through aggressive advocacy, meetings and letters,” said U.S. Sen. Ben Cardin, the ranking member on the Senate’s Transportation and Infrastructure Subcommittee.
“We asked for a meeting [with CSX] and they put us off but we insisted on it,” Cardin said after a delegation meeting in Washington on Thursday. “We finally got that meeting and I think that meeting was really the turning point.”
The meeting was held in December 2018.
“The state was there and we went through case by case of why we needed the Howard Street Tunnel," Cardin said. "And they said, ‘You don’t really need it because you can have longer trains and this and that.’ And we debunked every one of their arguments. Getting CSX on board was critically important.”
But Cardin, a Democrat, said the delegation also needed a federal commitment because “if you don’t have the federal funds you’re not going to move.”
Sen. Chris Van Hollen said the delegation secured that commitment by speaking directly with Chao. “We were very clear in our united support for this project,” the Democrat said.
Democratic Baltimore Mayor Bernard C. “Jack” Young welcomed the news that the long-awaited project will be moving forward, spokesman Lester Davis said.
“He’s obviously excited and looking forward to this project, which is going to improve the city’s infrastructure and economy,” he said. “It’s a boon for employment for the city, and a much-needed one at that.”
In his letter, Rahn said the tunnel expansion has been “a priority for the state of Maryland for decades.” He thanked Chao for the federal grant and said he looked forward to scheduling the kickoff meeting in Baltimore with officials from the Federal Railroad Administration.
“Once complete, it will fundamentally change the way containerized cargo moves around the country by creating a double-stack rail network to and from the Port of Baltimore and along the entire I-95 rail corridor," Rahn wrote.
The 1.4-mile bore under downtown Baltimore is about 18 inches too short for today’s freight trains to carry truck-sized shipping containers stacked one on top of the other. To create clearance for taller trains, the ceiling would be notched, the floor lowered and steel crossties, which lie lower than wooden ones, would be installed. Traffic would be able to move through the tunnel during the project, which is estimated to take three to four years.
James White, the executive director of the Port of Baltimore, who announced Wednesday his upcoming retirement from the Maryland Port Administration, said the tunnel expansion was one of his final goals as head of the state-owned shipping terminals.
The Evening Sun
“We checked that box," he said. “We’re getting our double-stack.”
The project will increase the flow of containers and create jobs, not just for longshoremen, but also for other industries connected to the port, including warehousing and trucking, said Scott Cowan, president of the International Longshoremen’s Association Local 333.
Cowan called the project “huge for us.”
“It’s something we’ve been waiting for for a long, long time," Cowan said. “It’s going to be a tremendous boost for the port."
The port’s public terminals handled 10.9 million tons of general cargo — more containers, cars, construction equipment and other cargo than ever before — last year, surpassing 10 million tons for the third consecutive year.
The Greater Baltimore Committee, an influential group of business and civic leaders that has advocated for the project for more than a decade, commended the project’s stakeholders for their progress.
“We applaud the collaboration and hard work of the public and private entities whose persistence has made it possible,” GBC President and CEO Donald C. Fry said in a statement. "Upon completion, the double-stacking capacity for freight rail will strengthen the economic competitiveness of the Port of Baltimore and result in significant economic growth and job creation for the region.”