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Amtrak moves to seize control of Union Station

The railroad said the move is necessary to upgrade the nation’s second-busiest train hub

Union Station carries more than 5 million passengers per year. (Bill O'Leary/The Washington Post)
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Amtrak is using eminent domain to try to seize control of Union Station, a move that the passenger railroad said is necessary to realize long-planned expansion and modernization of the nation’s second-busiest train hub.

The historic station, a fixture in the heart of the District, is owned by the United States, but it is leased to and operated by other entities. In a complaint filed Thursday in the District Court for the District of Columbia, the railroad sought control of the property interest owned by Union Station Investco LLC, a subsidiary of the New York based-Ashkenazy Acquisition Corp., which has subleasing rights of the station through 2084.

Amtrak said it hopes to take over operations and management of the train hall to pursue multibillion-dollar investments at the station, including a long-planned concourse expansion and major repairs to a tunnel that runs under the station and is “in serious need of repair or replacement.”

USI will continue to operate the station until the court decides that possession and control can be awarded to Amtrak, the railroad said. Ben Ashkenazy, chief executive and chairman of Ashkenazy Acquisition Corp., didn’t immediately reply to a request for comment in a message left with his assistant.

“We need to advance some long-delayed state of good repair and capital projects so that we can improve the station and shore up the station infrastructure,” said Dennis Newman, Amtrak’s executive vice president for strategy, planning and accessibility. “An improved Washington Union Station is really key to our mission.”

Newman said Amtrak believes it is better suited to manage and operate the station because of its decades of experience. Amtrak owns stations in New York City, Chicago, Philadelphia and Baltimore. “We uniquely have the capabilities to be the steward of a facility, a very critically important facility, like Washington Union Station,” he said.

The station, which opened in 1907, is known for its marble floor and coffered ceiling and includes eateries and shops. It is a major hub for intercity and commuter trains (Maryland MARC and Virginia Railway Express), Metro, and local and intercity buses.

Amtrak already owns the station’s platforms and railroad tracks. The U.S. government in 1985 authorized the nonprofit Union Station Redevelopment Corp. (USRC) to oversee the property. Union Station Investco has sublease rights through USRC.

Amtrak currently subleases a small portion of the station — about 13.4 percent — from USI for its railroad operations, which includes the concourse area right before passengers go out to the platform. The carrier wants to take over about 425,000 square feet of the station, which includes the entire property, except the parking garage.

Amtrak’s filing makes the case that acquiring leasing control will allow the railroad to repair the train tunnel “so that safety and stability are maintained.” Completing that project soon is critical to replace structurally deficient beams, girders and columns, said the railroad, and avoid collapse, which would have significant effects on train travel. Amtrak said it also plans to expand ticketing and waiting areas, improve accessibility and passenger flow, and add more passenger amenities while increasing capacity to meet future demand.

Amtrak said that it “lacks both the space and control to make much needed improvements” at Union Station, which carries more than 5 million rail passengers annually and is a top stop in the Northeast Corridor, the backbone of the nation’s passenger rail system. The station was designated a historic landmark by the District in 1964 and listed in the National Register of Historic Places in 1969.

Amtrak said in court papers that “poor maintenance and lack of capital investment … plagued the Station over the years.” The filing cited a 1981 incident in which heavy rains caused part of the roof to crash into the passenger waiting room. USI acquired its lease in 2007.

About $75 million in deferred maintenance is needed at Union Station, according to the court filing, which cites a recent building assessment by USI and the Federal Railroad Administration. But, it says, there are “insufficient funds available through the Capital Maintenance Funds” in the USI sublease.

Amtrak’s filing also cited its own plan to overhaul infrastructure supporting the tunnel. In 2017, Amtrak had projected it could have completed the extensive fixes in the subbasement by this year. It said it started negotiations with USI on the plan in 2018.

But USI has dragged its feet, Amtrak argues in its filing: “USI’s repeated rejections of Amtrak’s proposals related to Amtrak’s needs for this project have meant that this critical [state of good repair] project has not been effectively started.”

Beverley Swaim-Staley, president and chief executive of the USRC, declined to comment Thursday. The FRA, which provides oversight, did not respond to a request for comment.

Under federal code, Amtrak has authority to use eminent domain to acquire interests in property that’s necessary for use of intercity passenger rail operations.

“And this is a key intermodal facility. And it is critical for intercity passenger rail,” said Newman.

Amtrak’s Board of Directors last month approved a resolution approving the acquisition of the property interest, saying that the move would allow Amtrak to “directly invest in [Washington Union Station] in a more efficient and effective manner, making the most benefit for intercity and public transit riders.” The resolution was approved unanimously by the board, which includes a designee of Transportation Secretary Pete Buttigieg and FRA Administrator Amit Bose.

Amtrak said it made an offer to USI to buy its leasing right for $250 million on April 6, but said the company did not respond to the offer by an April 13 deadline.

Amtrak on Thursday made the $250 million payment to the court, “the amount of which it estimates to be just compensation,” according to the court filing, which says the amount was determined through an independent real estate appraisal. The court will determine the appropriate price and if and when Amtrak can take over.

As of Thursday evening, USI had not responded to Amtrak’s filing in court.

Amtrak also notes that USI recently faced two foreclosure actions: Although they were subsequently canceled, they underscore the “significant financial risk” of USI’s continued management and operations. Financial struggles could prompt USI to try to sell its interest in Union Station “to some unknown person or entity,” Amtrak said in its filing.

Amtrak’s move comes amid a push from the railroad and USRC for a multibillion-dollar expansion and overhaul of Union Station that would add concourses and tracks, more retail options, a new train hall, and modern parking and bus facilities. The proposed expansion, at least a $10 billion private and public investment, calls for a transformation of the nation’s second-busiest rail hub by 2040.

Joe McAndrew, who oversees transportation issues for the Greater Washington Partnership, composed of chief executives between Richmond and Baltimore, said Amtrak’s move is a “step forward” for the redevelopment of Union Station, which has been deteriorating.

“The company’s ownership of the decades long lease for the station building stands to enhance the speed that we can realize the benefits of the redevelopment of this critically important infrastructure asset for the region,” said McAndrews.

Amtrak has for years planned to remake its concourse to double capacity, improve accessibility, and relieve crowding. But that project, which was to begin in 2019, has been on hold. Officials said they want to create a modern and brighter space for the 100,000 daily intercity, commuter and local travelers who pass through Union Station.

Michael Laris and Ian Duncan contributed to this report.

This article has been updated.