The U.S. Department of Transportation has outlined the steps the MTA and the Gateway Development Commission must take in order to restore funding for two key transit projects — the next phase of the Second Avenue Subway and the Hudson River Tunnel.
Both the Metropolitan Transportation Authority and the GDC acknowledged Tuesday that they have received letters from the feds explaining the steps D.O.T. expects them to take in order to restart federal reimbursements on the projects.
“We got feedback from the federal government last night, literally,” Janno Lieber said at a public event in Manhattan on Monday. “We got feedback from them and we will be acting on it promptly.”
MTA Chairman Janno Lieber is pictured at the Office of Emergency Management in Brooklyn on Friday, April 5, 2024. (Theodore Parisienne for New York Daily News)
The funding for the two key transit projects — the long-awaited extension of the Second Avenue Subway into East Harlem and the construction of a new tunnel under the Hudson River to double train traffic between New York and New Jersey — was placed on hold by the Trump administration in October, during the early hours of the federal shutdown.
Transportation Secretary Sean Duffy and Office of Management and Budget Director Russell Vought both said at the time that the decision was made over concerns that the agencies in charge of those projects — the MTA and the Gateway Development Commission — both were in violation of a rule that the federal government had only just published.
That rule forbids the use of race- or sex-based factors to determine whether a contractor on a federally funded program can be considered a “Disadvantaged Business Enterprise,” as outlined in a Reagan-era program meant to support large-project contracts going to such entities.
Duffy, at the time, told the Daily News that his agency was “not trying to shut down these projects,” but that U.S. D.O.T. needed to review its contracting practices to ensure it was in compliance with the new rule.
It was not immediately clear Tuesday what the feds were asking MTA or GDC to do in order to restore funding, and a request for details from the D.O.T. went unanswered by press time.
U.S. Transportation Secretary Sean Duffy enters the Dekalb Ave.-Flatbush Ave. subway station in Brooklyn, New York, on Friday, April 4, 2025. (Theodore Parisienne / New York Daily News)
“They’ve sent us some specific directions,” Lieber told reporters Tuesday. “It looks like they’re things we can comply with — we just have to go through a process of recertifying companies to participate in this DBE program.”
“We were in dialogue with the federal government on that as recently as yesterday, and it looks like we’re going to be able to move forward,” he said.
Gateway Development Commission spokesman Stephen Sigmund confirmed that his agency had received a similar letter.
“GDC is reviewing the letter we just received from the U.S. Department of Transportation,” Sigmund told The News. “We will continue to work cooperatively with our federal partners to ensure we comply with all federal laws and regulations.”
Work on both projects has continued amid the funding hold.