Under the federal code, Amtrak has the authority to use eminent domain to acquire interests in property necessary for the use of intercity passenger rail services. In a lawsuit filed last month in District Court for the District of Columbia, Amtrak said it hoped to take over operations and management of the train hall to pursue multi-billion dollar investments, including the expansion of the long-planned concourse and repair of a tunnel under the station that Amtrak says is “in serious need of repair or replacement.”
Amtrak takes control of Union Station
USI’s filing counters that the bulk of these two projects “will take place in areas already subleased by Amtrak” and adds that the railroad may seek additional space if needed. Amtrak subleases a small portion of the station—about 13.4% of it—to USI for train operations, which includes the concourse before passengers go to the platform.
“None of these projects require taking up the entirety of Union Station, which is approximately 420,797 square feet. Amtrak also could not expand operations in many parts of the station because they are protected as historic sites,” USI argued in the latest filing.
The station, which opened in 1907 in the heart of the nation’s capital, is owned by the United States but leased and operated by other entities. Amtrak already owns the station’s platforms and tracks. In 1985, the US government authorized the Union Station Redevelopment Corp. (USRC) nonprofit overseeing ownership. Union Station Investco has sublease rights through the USRC until 2084.
Officials of Kasowitz Benson Torres LLP, the law firm representing USI, did not respond to requests for comment on Wednesday.
Amtrak said in a statement Wednesday that its “goal remains to protect the safety and security of the traveling public and to improve passenger amenities and experience at the station”.
Amtrak’s complaint also names Kookmin Bank Co., a Southern Korean investment trust and property lender. Kookmin Bank, in a separate filing last week, called for the case to be dismissed, questioning Amtrak’s motive for repossessing the property.
“Amtrak wants to take control of a valuable asset or at least leverage its position in order to obtain economic concessions to which it is not entitled,” the Kookmin filing states.
Documents filed by Kookmin and USI expose Amtrak’s allegation that the station suffers from poor maintenance and a lack of capital investment. According to Amtrak’s filing, about $75 million in deferred maintenance is needed at Union Station, citing an assessment of the building by USI and the Federal Railroad Administration.
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A transportation hub with retail and dining establishments, Union Station also serves many commuters using the subway, as well as Maryland and Virginia commuter trains and local and intercity buses. The station’s dilapidated facilities and poor lighting are a source of complaints from travellers, as local authorities have pushed for investments to upgrade the busy transit hub.
“The potential for this site is enormous,” Mayor Muriel E. Bowser (D) said at a news conference at the station in March. “Union Station is the first place many people discover Washington, D.C., and we want it to be an exceptional experience. … We also know that redevelopment of Union Station is critical to growing our transportation, not just to our growth, but to the whole region and, in fact, the whole east coast.
Amtrak’s action comes amid a push by the railroad and the USRC for a multibillion-dollar expansion and overhaul of Union Station that would add concourses and tracks, more travel options retail, a new train concourse and modern parking and bus facilities. The proposed expansion, a private and public investment of at least $10 billion, calls for a transformation of the nation’s second busiest rail hub by 2040.
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USI’s filing says he made “substantial and significant improvements to the station” and transformed it into “a premier dining and retail venue” during his 15 years of running the station. the property. Among the investments cited is an $18 million project to restore the ceiling of the main hall after a 2011 earthquake.
Investco’s filing also alleges that Amtrak is “completely incapable of managing Union Station’s non-rail operations.”
Amtrak made an offer to USI to buy its lease rights for $250 million on April 6, but said the company did not respond to the offer by the April 13 deadline. A day later, the railroad sued and made the $250 million payment to the court, “which it believes to be just compensation,” according to the court filing, which says the amount was determined by an independent real estate appraisal. .
Investco’s filing calls the $250 million “a bad faith, bad faith offer” and said the the seven-day deadline imposed by Amtrak was not “ample time to consider and negotiate the sale of any significant commercial property, let alone one as large and complex as Union Station”.
Investco said Amtrak’s valuation was flawed and made without sufficient analysis of the station’s revenues and financial condition, and that a recent investor valued Union Station at more than $700 million. The court would like determine the appropriate price should Amtrak take over.