A federal judge will rule on Amtrak’s bid to use eminent domain to take over Union Station — a major railroad hub located just blocks from Capitol Hill — for what the current leaseholder claims is a third of its value.
Amtrak, which currently subleases around 13% of the building, including the train concourse and ticketing area, wants to take over the full lease from its current holder, a private company known as Union Station Investco (USI), according to the lawsuit filed in April 2022. It claims it needs the control to modernize the facilities and has the right to take over the lease under a law enabling it to acquire property “necessary for intercity rail passenger transportation” using eminent domain.
Amtrak CEO Steven Gardner said during a September hearing before Judge Amit Mehta that there was a “mismatch” between Amtrak and USI’s goals, noting that taking the lease would “take away that interference and distraction” according to The Wall Street Journal.
The lawsuit was filed one day after Amtrack’s deadline for its $250 million offer passed. An appraisal cited by USI places the value at least $700 million, according to court documents. (RELATED: EXCLUSIVE: Amtrak Hides Hefty Salaries Of Thousands Of Employees While It Hemorrhages Millions)
LOS ANGELES, CALIFORNIA – DECEMBER 09: An Amtrak train sits at a station stop in Union Station on December 9, 2021 in Los Angeles, California. (Photo by Mario Tama/Getty Images)
The Federal Railroad Administration (FRA) owns the station. Over 40 years ago, Congress awarded the lease to a private company when it passed the Union Station Redevelopment Act to rectify conditions deemed “unsafe,” according to The Washington Post.
USI, owned by Rexmark, raised questions about Amtrack’s claim it can use eminent domain to acquire the lease.
“In sum, using the ‘need’ for capital improvements as a pretext, it appears Amtrak is attempting to wrongfully use its limited condemnation power to obtain a property interest for financially motivated reasons, rather than any ‘need’ by Amtrak to provide the public intercity rail travel, as statutorily required,” USI wrote in a filing.
“Amtrak sat back and watched USI painstakingly navigate Union Station through a global pandemic, only to swoop in and attempt to take the station from USI for pennies on the dollar, when things began to improve,” USI continued. “Federal law permits no such seemingly financially motivated bad faith taking.”
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