Top Committee Democrats Want Full Audit of Union Station Redevelopment Corporation

WASHINGTON, DC – House Transportation and Infrastructure Committee Ranking Member Nick Rahall and Subcommittee on Economic Development, Public Buildings and Emergency Management Ranking Member Eleanor Holmes Norton (D-DC) have sent a letter to the U.S. Department of Transportation (DOT) Inspector General (IG) requesting the first ever audit of the Union Station Redevelopment Corporation (USRC), the federal coordinator of the facility and of the modes of transportation and retail housed at Union Station.

The two senior members of the Transportation and Infrastructure Committee say a thoroughgoing and definitive audit of the financial viability and management of USRC is necessary in light of an unprecedented and simultaneous transformation involving all aspects of Union Station, some of which are already in progress. They also warn that Congress is unlikely to rescue Union Station as it did in the 1980s and are concerned about whether the USRC leases and other income ensure that the facility will be self-supporting in the long-run. The letter cites a lack of Congressional oversight over USRC until Norton held hearings that showed the absence of a master plan to coordinate major changes inside and outside of Union Station.

The letter follows.

December 22, 2011

Honorable Calvin L. Scovel, III
Inspector General
U.S. Department of Transportation
1200 New Jersey Avenue, SE
Washington, DC 20590

Dear Inspector General Scovel:

We request what we believe would be the first full federal audit of the Union Station Redevelopment Corporation (USRC), which manages the Department of Transportation (DOT) -owned Union Station in the nation's capital. We write now because Union Station is undergoing a major transformation that will have significant effects on the national capital region and the northeast corridor, and because a new mixed-use community is planned for above the rail tracks. Changes include the expansion of waiting areas for Amtrak, expansion of the Maryland Rail Commuter Service (MARC) and the Virginia Railway Express (VRE), expanded access to the busiest Metrorail station in the region, construction of a bus deck within the existing parking garage, renovation of Columbus Circle, expansion of the train concourse, construction of Burnham Place, a three-million-square-foot mixed-use development over the rail tracks, in addition to a full overhaul of the interior of the station, including rehabilitation of the retail space leased to Askenazy Acquisition Corporation.

Some of this work has already begun, and, in addition, Union Station is now undergoing major repair work resulting from the August 2011 earthquake. Amtrak also is currently in the process of developing its own master plan for its Union Station operations because of the urgent need to improve capacity and service along the Northeast Corridor. The entities housed at Union Station are funded and managed by private and public entities, but USRC is the federal coordinator of all activities at Union Station. We also ask that you evaluate the terms of the master retail lease that USRC has negotiated with Askenazy. Because this lease is the primary means of support for USRC, it will be important to know whether the terms meet the long-term needs of USRC and allow it to be self-sustaining.

With nearly 90,000 visitors passing through Union Station every day, a full audit of the management and financial viability is overdue, particularly in light of the most significant changes at Union Station since it was rehabilitated in 1988. As background, Congress commissioned Union Station, which first opened in 1907, as a train facility for the nation's capital, with a much heralded design by the famous architect, Daniel Burnham.

Once the largest building in the nation's capital and a bustling transportation hub and commercial center, Union Station deteriorated as rail use declined in the 1950s. Following a long series of failed ideas, wasted federal funds, cost overruns, major utility needs and mismanagement, Congress in 1981 passed the Union Station Redevelopment Act (P.L. 97-125), authorizing DOT to create a non-profit corporation to spearhead the redevelopment of Union Station into a modern facility, to maintain and expand it to become a self-supporting intermodal facility, and to protect the federal government's interest in the facility. In 1988, after a federally funded multi-million dollar renovation, Union Station, which had become a neglected, boarded up wasteland barely fit for trains, reopened as a beautiful, historically restored facility and shopping mall, and as a major multi-modal transit hub and tourist destination. In 2002, the General Services Administration sold 15 acres of air rights over the Union Station rail yard for the development of Burnham Place.

After the formation of USRC in 1983, there is no record of congressional oversight hearings until 2008. Although plans for transformational changes had been announced by the entities housed at Union Station, the hearings revealed that there was no master plan to coordinate the major changes planned for inside and outside of the station.

In recent years, the majority and minority leadership of the Transportation and Infrastructure Committee, which has oversight over Union Station, urged USRC to meet the congressional mandate to make Union Station fully intermodal, particularly by allowing intercity bus service at Union Station. After numerous hearings and letters from the committee and subcommittee leadership, USRC developed plans to allow intercity bus companies to operate out of the existing bus deck. Progress on negotiations for full intercity bus service was finally made through intervention by DOT, which, by statute, chairs the USRC Board of Directors. As a result, five intercity bus companies are now operating at Union Station, the intercity bus deck is nearing full operation and planning is under way for the construction of a bus terminal. However, the use of the existing bus deck is not a permanent solution, and long-term plans for full intercity bus service have not yet been developed.

Considering the unprecedented plans underway, some to occur simultaneously, assessing the financial condition of this asset is necessary to protect the significant federal investment and to avoid another cycle of the disrepair that once led to the shutdown of the facility. Particularly today, when there are no federal funds to assist Union Station as Congress did before, it is essential that the Congress have a definitive audit of the financial viability and management of USRC.

Sincerely,

Nick Rahall, II
Ranking Member

Eleanor Holmes Norton
Member of Congress