A Look at the Controversy over Amtrak, Eminent Domain and NYP

by Sean Jeans-Gail, VP of Gov't Affairs

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While most of the energy surrounding the BUILD America 250 Act's approach to passenger rail has (rightfully) focused on the precipitous downgrade in dedicated funding, there’s been an interesting drama developing in the periphery around an amendment to Amtrak’s ability to use Transit Oriented Development (TOD) to generate revenue.

The Nationally Significant Rail Station Modernization Act of 2026 was introduced by Rep. Addison McDowell (R-NC-06) as an amendment during the House Committee on Transportation & Infrastructure’s markup of the BUILD America 250 Act. The amendment—which was adopted—would enhance Amtrak’s eminent domain powers and allow it to capture value from nearby real estate development which benefits from proximity to Amtrak stations.

Specifically, the amendment:

• Enhances Amtrak’s eminent domain powers by expanding the definition of “property necessary for intercity rail passenger transportation” to include:
  • Station expansion, reconstruction, or modernization; or
  • Transit-oriented development, including revenue-generating commercial, office, retail, mixed-use, or ancillary development.
• Authorizes Amtrak to “own, lease, license, develop, ground-lease, or enter into joint development or other public-private partnership arrangements” for property located on or adjacent to its stations.
• Authorizes Amtrak to use revenues derived from these activities for “capital improvements, maintenance, debt service, or other costs related to stations and intercity passenger rail facilities”.
• Prohibits state, local and regional governments from collecting taxes or fees on real property owned by Amtrak (alone or in partnership with others), or on improvements made to these properties.
• Authorizes Amtrak to enter into agreements requiring payments in lieu of taxes from entities occupying, leasing, or developing property owned by Amtrak, so long as Amtrak remits funds to state and local governments estimated to be equal to the taxes they would have received prior to any development or improvement of the property.
• Expands categorical exclusions and the streamlining of environmental and local review to Amtrak-led TOD.

“Amtrak can receive contractual payments from developers, this allows Amtrak to retain the revenues created from the increased value of the developed property and then pour that money back into capital improvements, maintenance, and related passenger facilities,” said Rep. McDowell during the markup. “This amendment does not raise federal taxes[, and] it does not require new mandatory spending.”

If a freshman Republican Congressman from North Carolina seems an unlikely source for an amendment that turbocharges Amtrak’s eminent domain powers, the opposition came from an unequally unlikely source: Rep. Jerry Nadler (D-NY-12), a staunch supporter of Amtrak. Rep. Nadler framed the policy as ceding too much power to the Trump Administration, while also arguing it would make it easier for Amtrak to structure private development deals, fast-track favored projects for federal financing, preempt state and local taxes, and override local zoning in building requirements (confusingly, Nadler presented these last arguments as a reason to vote against the amendment).

“[This amendment] would hand Amtrak and the Trump-Duffy DOT expanded authority over station area real estate, financing, taxation, zoning, and private development at the exact moment, they are already running Penn Station in New York through a rushed and closed-door [Request for Proposal] process,” said Rep. Nadler. “This amendment is very bad for Penn Station and for New York City.”

The cognitive dissonance produced by a longtime advocated for Amtrak opposing an amendment that would help Amtrak generate revenue to advance critical projects was seized upon by Rep. Seth Moulton (D-MA-06), who pointed out that this amendment is based on best practices employed in other countries with successful intercity rail systems.

To quote Rep. Moulton at length:

My colleague, Mr. Nadler, basically explained why this amendment would accelerate development of Penn Station. Now, if there's anyone in America, or the world, who thinks that Penn Station development is going too slowly, I'd like to meet that person.

This station is overdue for redevelopment by about six decades. It's not happened. And the model in the rest of the world that's been so successful is to allow what's called ‘value capture’ by the railroad that actually increases the value of that real estate by the service that they provide, and not have that tax revenue go somewhere else.

That's exactly what this amendment makes possible. This amendment makes possible the kind of station development that we've seen everywhere else in the world.

[The exchange is worth watching in full.]

Opposition to the amendment was fleshed out in NYC Streetsblog this week, in a post titled “Art of the Steal: Congress Sets the Stage For Trump Land Grab To Fund Penn Station”. The article directs three main arguments against Rep. McDowell’s amendment:

1. It takes away from local revenue to fund federal projects by freezing payments to local governments at a particular point in time, while putting local government on the hook for additional services that may be required (such as additional trash pickups)
2. Exempts TOD from local scrutiny.
3. The Penn Station redevelopment is a bad model for this kind of TOD since the proposal on the table is mostly cosmetic and doesn’t expand capacity.

Working backward:

- Capacity: We agree that Penn Station redevelopment should expand capacity. Amtrak’s Andy Byford, the man the Trump Administration has tapped to lead the redevelopment, is on record agreeing with this, as well. Regardless, it’s a largely non-germane argument, since:

- The bill covers the entirety of the Amtrak network, not just NYC.

- The bill makes it clear that TOD revenues would be fungible, and thus eligible to be directed at capital improvements, maintenance, debt service, or other costs related to stations and intercity passenger rail facilities across Amtrak's network. Amtrak could, for instance, use new revenue from Penn Station TOD to fund the overhaul of its aging electrical infrastructure, which will directly benefit everyone who relies on the rail corridors that feed Penn Station.

- One of the primary goals of the bill is to allow Amtrak to capture revenue the value its transportation corridors generate. This definitionally involves finding ways to generate revenue from activities that don’t directly improve capacity or operations.

- Local Scrutiny: Good! “Local scrutiny” is the death of good intercity rail network planning and development. As just one example: “local scrutiny” has been a huge obstacle to through-running at Penn Station, which would expand capacity.

- Local Revenue: This is the most compelling argument, and something that could be corrected in a technical amendment were the bill to advance on the floor. Payments to local governments should be indexed to inflation, and there should be clarification that usage-based fees tied to providing services and utilities are exempt.

As far as Rep. Nadler’s arguments that it cedes too much power to the Trump Administration, I can’t help but feel a certain sense of exhaustion at the whole theory of infrastructure development underlying this claim. You get the sense that Democrats think it’s cheating for a politician to take a personal interest in a project that everyone know needs to be built, grease the wheels to see it get built in a reasonable amount of time, and then publicly taking credit for it getting built. It’s like watching someone get repeatedly dunked on by a golden retriever while they frantically thumb through the rulebook.

For too many officials in the U.S., infrastructure is about The Process, not the outcome. Unfortunately, The Process is bad. To paraphrase Nolan Hicks, The Process has calcified around the idea that building anything should take four years to get approved, four years to secure the funding, four years of engaging in permitting battles with holdout municipalities and fighting lawsuits filed by cranks, with a final four years to actually construct.

It would be nice if the presidential administration that helped secure the funding for passenger rail included in the Bipartisan Infrastructure Law—i.e., the Biden Administration—had been willing to accelerate project development so that they could oversee the groundbreaking for these kinds of projects. But mostly they didn’t, so now the power to oversee what gets built has been ceded to the Trump Administration. That’s not cheating, that’s just reality.

Whether Penn Station, in particular, ends up being a handout to President Trump’s friends in NYC remains to be seen. But the idea that we’re better off preventing any kind of unsavory arrangement by never building anything at all is a dead letter.

I’m ready to build again.