The cost of the Second Avenue Subway extension to East Harlem has ballooned to $7.7 billion, an $800 million increase from previous estimates, according to documents published on Thursday by the Federal Transit Administration.
The disclosure of the price jump came as the Biden administration announced a budget proposal that would give the MTA $497 million to begin work on the long-stalled project. But that money is a fraction of the $3.4 billion New York officials say they need from the feds to complete the extension.
“The federal government added contingency costs to the project and we are reviewing it,” said MTA spokesperson John McCarthy.
The new price tag includes interest payments on debt the MTA expects to take out to build the subway extension. The feds reported the previous price tag at $6.9 billion, but the MTA reported the number at $6.3 billion, a figure that did not include debt financing costs.
The project would extend the subway line by 1.5 miles from East 96th Street. It would add three new stations: one at East 106th Street, another at East 116th Street, and a new level beneath the existing platforms at Lexington Avenue and 125th Street.
The MTA dug out Second Avenue tunnels between East 99th and East 105th streets and between East 110th and East 120th streets in the 1970s before the city’s financial crisis in 1975 halted work on the project.
Nearly 50 years later, the MTA is still waiting to finish the job.
A study published last month by researchers at NYU’s Marron Institute found the Second Avenue Subway extension is one of the costliest railroad expansion projects per mile in the history of the world.
Eric Goldwyn, who helped lead the study, said “inflation fears could explain the increase” in the project’s price tag.
“Delay is a killer,” said Goldwyn. “I would also guess… that the FTA has identified a risky element, something related to the new tunnel that needs to be built or the challenge of expanding and tying in [the] Second Avenue Subway to the existing station at 125th Street.”
The documents published on Thursday said there are “additional steps” the agency must complete before the FTA signs off on another roughly $3 billion in federal grants for the project.
MTA Chair Janno Lieber said during a news conference on Thursday that the feds wouldn’t send the money while the agency faces financial peril.
“To land that grant once and for all, US DOT is requiring us to demonstrate that we're going to have financial stability in our operating budget so that we can pay for the operation of a new train line in addition to everything else,” Lieber said. “Not for nothing, we've been promising East Harlem and central Harlem, the Second Avenue Subway since Joe Biden was like 10 years old.”
Lieber said lawmakers and city leaders should sign off on Gov. Kathy Hochul’s proposal to plug a budget deficit at the MTA with a payroll tax hike and $500 million in additional aid from New York City’s coffers.
