U.S. District Court Hears Amtrak’s Eminent Domain Argument for D.C.’s Union Station

Written by Jennifer McLawhorn, Managing Editor
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Courtesy of Joseph Barillari

WASHINGTON, D.C. – Last Monday, U.S. District Court Judge Amit P. Mehta heard arguments in an eminent domain case regarding Amtrak and Union Station.

Last Monday, U.S. District Court Judge Amit P. Mehta heard arguments in an eminent domain case regarding Amtrak and Union Station. Amtrak “claims that it should be granted ownership of the leasing rights from the station’s management company, Union Station Invesco (USI),” according to the Commercial Observer

Currently, Rexmark owns USI and oversees the “retail portion” of Union Station, “with Cushman & Wakefield handling things for the company on the office side.” Last year, Rexmark gained leasing rights by way of foreclosure and has been working on the station. However, “federal code states that Amtrak is allowed to acquire via eminent domain property that is ‘necessary for intercity rail passenger transportation.’” Amtrak says it needs the station in order to perform repairs and “reinforce a train tunnel that runs through it.”

Discussions between Amtrak and Rexmark led nowhere after 10 separate meetings. The discussions were held to “yield a purchase price that satisfied both sides.”

During the proceeding last week, Stephen Gardner, Amtrak chief executive, reiterated the urgency and said: “Every day we wait, we are postponing the opportunity to improve the facility. . . We are increasing project costs. . . and we are delaying the services and improvements necessary to give our customers the experience that they expect from us.”

Attorneys for Rexmark state that Amtrak does not have authority to argue eminent domain, because Amtrak does not “meet requirements under U.S. law to take over the entire railway station.” The Federal government owns Union Station, but it leases it out to other companies. According to the news report, “Amtrak owns the station’s platforms and railroad tracks,” after the federal government “authorized the nonprofit Union Station Redevelopment Corporation (USRC) to oversee the property in 1985.”

After, USI bought long-term sublease rights through the USRC. In April of last year, Amtrak “filed the eminent domain claim to take control of the station from Ashkenazy [Acquisitions, which owned USI], which was facing financial trouble.” Later last year, Rexmark foreclosed “on the leasehold interest after Ashkenazy defaulted on its loan. At the time, Amtrak offered $250 million in exchange for Ashkenazy’s leasehold interest.”

Founder and managing principal of Rexmark, Michael Rebibo, “noted in the case that if Amtrak is granted authority to take over union Station, it would terminate all existing leases and undo the advancements in the past year to attract retail and food businesses to the station, which Rexmark has been negotiating since it took over Union Station Invesco.”

Matt Barry, the general manager of Union Station, made a statement to the Commercial Observer on behalf of Rexmark. In regard to the leasing plans, he said: “Growth is what we’re always looking for. . . Clearly, our current strategy is to lease up and provide a fantastic customer experience. We have some major overhauls and some improvements planned. It’s been a great place in the past and has been here a long time, and will continue to be an iconic asset.”

If Amtrak is successful in argument its eminent domain case, then it “will have control of all leasing rights and will be able to negotiate with tenants without going through current ownership.” According to the report, there is no set time frame for a decision, but it “would appear it will happen before the end of the month.”

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