Howard Street Tunnel expansion back on as CSX returns to table with $91 million commitment

The Howard Street Tunnel expansion appears to be back on, after the railroad CSX Transportation reversed a decision to pull out of the project and committed $91 million toward it, Maryland officials said Thursday.

“We are pleased that CSX has reversed its position on the Howard Street Tunnel project and is once again supportive and willing to participate,” Sen. Ben Cardin said in a statement.

The CSX commitment was secured during a meeting Thursday between CSX CEO Jim Foote and the Maryland congressional delegation.

The project, considered crucial to the future prospects of the port of Baltimore, would expand the more than century-old tunnel under Howard Street through downtown Baltimore to accommodate trains with shipping containers stacked two-high.

Officials say that the ability to double stack the truck-sized boxes on trains, which is the most efficient way to transport containers on land, will generate 34,000 jobs and $2.9 billion for the region. The port has seen a surge of cargo shipped via container since the opening of the expanded Panama Canal in 2016.

But the port’s growth is constrained by the Howard Street Tunnel, which the containers must transit by train to reach points west and south on CSX’s multi-state rail network.

“This is an essential project for the Port of Baltimore, Maryland, and the entire East Coast,” Gov. Larry Hogan said in a statement. “Reconstructing the Howard Street Tunnel will create thousands of jobs, open up new trade lanes for the Port, and improve overall freight rail service across our nation.”

But the long-awaited project appeared doomed last year, after CSX withdrew its support. The move caused state officials to cancel a request for $155 million in federal money for a project they hoped would be a boon for the port of Baltimore.

A spokeswoman for the Jacksonville, Fla.-based railroad, the successor to the Baltimore & Ohio Railroad, said the news came after “much deliberation” and added that “there will be greater need for public investment” for the project moving forward.

The $91 million CSX has committed is less than what the railroad had offered earlier. The railroad and the state had agreed to split $270 million of the project’s costs when it was first announced.

CSX pulled out in last fall, saying: “The Howard Street Tunnel project proposal no longer justifies the level of investment required from CSX and our public partners at this time.”

The CSX spokeswoman said Foote had been weighing whether to fund the tunnel’s expansion ever since 2017, when Hogan and Maryland lawmakers first asked CSX to reconsider its decision to stop funding for the project.

Lawmakers rushed to claim credit for the reversal Thursday, with a spokeswoman for Larry Hogan saying that the project had been a priority for the Maryland governor since before the election.

“Our administration has been in close contact with CSX throughout this process, and we welcome them back to the table to work together and get it done,” Amelia Chasse said. “Our administration stands ready to work with our federal partners to secure the resources we need to to get this critical project back on track."

The state had sought the $155 million federal grant to completely fund the project, which also would have lowered the tracks under nine bridges in the city, including those along East 26th Street, where retaining walls holding streets above the tracks have collapsed twice in the past two years.

Rep. Elijah Cummings said he and colleagues had urged CSX to continue with the project last year.

“I am pleased that CSX kept its word and has now concluded that there is significant value in this project and the company is again willing to participate financially,” he said.

In September, Maryland’s U.S. senators wrote a letter asking CSX if it would consider reviving the project.

The tunnel, built in the early 1890s by the B&O Railroad, achieved international notoriety in 2001 when a 60-car train derailed and set off a chemical fire that paralyzed downtown Baltimore for almost a week. Nobody was killed, but the fire damaged the city’s underground infrastructure, halted freight traffic along the Eastern Seaboard and forced the cancellation of three Orioles games.

The disaster generated interest in rerouting the CSX line or widening the existing tunnel, but the railroad and the state and federal governments were deterred by the enormous cost of the project. Some of the proposed solutions, such as a new tunnel to the west of the existing one, could have run into the billions of dollars — as a similar proposal to replace Amtrak’s Baltimore & Potomac Tunnel has. The price tag for that project is $4.52 billion.

The state and CSX announced plans in 2016 to keep the existing Howard Street Tunnel while lowering its floor and raising its ceiling to improve clearances and allow double-stacking.

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