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February 9, 2005

The new Trans-Hudson Express (THE) Tunnel will create tens of thousands of new jobs, and dramatically increase gross regional product and real personal income, according to an analysis conducted by Economics Research Associates.

The study, which was commissioned by NJ TRANSIT, examined the economic benefits to New Jersey and New York of the Access to the Region’s Core project. By doubling passenger rail capacity between New Jersey and New York, THE tunnel will address current capacity constraints and meet future demand.

THE tunnel will produce two waves of significant, measurable economic benefits—one during the construction period and a second set of ongoing, permanent benefits. These benefits include new jobs and increases in overall economic activity, measured by gross regional product (GRP) and real personal income that flow from the new jobs.

“THE Tunnel project fuels economic growth and wealth in the region as a whole—helping the economy of both New Jersey and New York,” said Acting Governor Richard J. Codey. “The most important benefit of the THE Tunnel is the enhancement of regional competitiveness.”

“This study confirms just how vital it is for us to move forward in the construction of a second commuter rail tunnel to New York. Our region's economic health and our quality of life is tied tightly to this project,'' said Senator Jon S. Corzine. “Getting more commuters off our roads and on to trains will lower emissions and result in cleaner air. Shorter commuting times will result in increased labor productivity and increased leisure time.''

"The significance of this project will not be seen only in New Jersey. This plan greatly enhances national and regional mobility through the great gateway that is our rail and port system," said Senator Frank R. Lautenberg. "The Tunnel will have national benefits and should be a federal priority."

“Transportation is about more than just moving goods and people. It is about creating business, growing the economy, fostering economic development, and providing security. The economies of both New York and New Jersey depend on people commuting across the Hudson River. By building the trans-Hudson tunnel, we will be able to ensure that, as our interstate economies develop and populations grow, we will have the transportation infrastructure and resources necessary to meet the future demand and get our residents to the jobs of the future safely and efficiently,” said U.S. Representative Bob Menendez.

“For more than 80 years, the Port Authority has been charged with being a leader in maintaining critical transportation facilities throughout the region and in planning for future growth in bi-state travel,” said Port Authority Chairman Anthony R. Coscia. “With a limited ability to handle more traffic at some of our trans-Hudson tunnels, it is imperative that we begin working to accommodate increased mass transit use.”

Jobs during construction and beyond

During the construction of THE Tunnel, New Jersey and New York will share economic benefits as a result of the creation of approximately 4,000 construction-related jobs each year. Construction will generate real personal income within the bi-state region in excess of $2.7 billion in 2004 dollars.

Once THE Tunnel opens, the region as a whole will gain new jobs—growing to approximately 44,000 within 10 years—predominantly in the professional and business service areas. Approximately 16,000 of these jobs will be created in New Jersey and 28,000 in New York. The jobs result from increased regional competitiveness as businesses relocate or expand in the region due to such factors as better quality of life, commuter access, and transportation cost-savings. The additional jobs, which would not occur if THE Tunnel were not built, lead to increases in the GRP and personal income. The regional GRP is projected to increase by $10 billion in 2004 dollars. The total personal income benefit for the region is nearly $4 billion in 2004 dollars.

Today, while many of the jobs in the region are and will continue to be concentrated in Manhattan, the people who fill those jobs often live in the suburbs. In fact, nearly half of the people from the suburbs working in Manhattan cross the Hudson River from New Jersey or Rockland and Orange counties to get to work.

Long-term benefits for the economy and regional competitiveness

The report found that by reducing constraints on the transportation system, THE Tunnel would have important long-term positive benefits for the economies and regional competitiveness of both New Jersey and New York. Increases in NJ TRANSIT service between New Jersey and New York will also yield economic benefits.

The combined additional tax generation for the bi-state region is projected at $47 million soon after the opening of THE Tunnel, increasing to $480 million by 10 years out.

The report found that counties closest to Manhattan would benefit the most from the ARC improvements. As a general rule, areas that benefit the most in terms of commute timesavings and frequency of service also experience the greatest economic benefit. This was demonstrated with the introduction of MidTOWN DIRECT in communities such as South Orange and Montclair, where property values increased by 113 percent.

Finally, the report found that THE Tunnel will have significant implications for real estate values, land use and transportation planning as NJ TRANSIT moves forward with plans to expand its 954-mile rail system west of the Hudson River with additional services in New Jersey and Rockland and Orange counties in New York. With increased train service made possible by THE Tunnel, communities along NJ TRANSIT’s 10 rail lines are expected to take advantage of economic opportunities for transit-friendly residential and commercial development near rail lines.

The tunnel is also expected to support development of the West Side of Manhattan, as well as Smart Growth development along existing and future rail lines in Orange and Rockland counties in New York and counties including Essex, Monmouth, Bergen, Passaic and Hunterdon in New Jersey. As a result, more residential and commercial development—including retail—can be expected in cities such as Newark, Elizabeth, Paterson and Hackensack.

Access to the Region’s Core

With an existing rail network that cannot keep pace with the increasing number of riders and quickly running out of tunnel and station capacity into New York City, a joint study conducted by NJ TRANSIT, the Port Authority of NY & NJ, and the Metropolitan Transportation Authority examined ways to alleviate capacity constraints and studied new opportunities for growth through increased rail accessibility. Recommendations were developed to substantially improve transportation network efficiency, thereby creating a boost to the economy that would not occur without major improvement.

The solution proposed by the ARC study is a new state-of-the-art two-track tunnel under the Hudson River—THE Tunnel. Supporting the tunnel would be a new rail station adjacent to Penn Station New York under 34th Street. Improvements in New Jersey include new track along the Northeast Corridor and a connection to rail lines serving residents of Bergen, Rockland and Orange counties, resulting in a one-seat ride to New York for the first time. Raritan Valley Line customers would also benefit from a one-seat ride.

The Draft Environmental Impact Statement (DEIS) for the ARC project is progressing under the direction of NJ TRANSIT with planning assistance from the Port Authority of NY & NJ. This work will be completed in the summer of 2005.

Economic Research Associates is a prestigious international firm that advises governments about urban planning economics and development policy. Using sophisticated computer modeling techniques, their work locally with the Port Authority of New York and New Jersey, and with the City of New York, along with work they have done for the US and foreign governments, includes studying the economic impacts of projects such as the Sears Tower, the World Cup and Taiwan High Speed Rail. Their private sector clients include multinational corporations like Walt Disney, Exxon and Mistubishi.


NJ TRANSIT is the nation's largest statewide public transportation system providing more than 752,600 daily trips on 240 bus routes, three light rail lines and 11 commuter rail lines. It is the third largest transit system in the country with 163 rail stations, 52 light rail stations and more than 17,000 bus stops linking major points in New Jersey, New York and Philadelphia.

To view the Economic Benefits report in PDF format, click here. (Requires Adobe Acrobat.)