A federal district court is set to weigh in on a case regarding Amtrak’s attempt to take over Washington, D.C.’s, historic Union Station.
Amtrak, which currently subleases roughly 13% of the station through Union Station Investco (USI), owned by Rexmark, is attempting to take full control over the station through the use of eminent domain, according to a lawsuit filed in April 2022.
As part of the sublease agreement with USI, Amtrak space consists of the train concourse and ticketing area. Amtrak is arguing that in order to make updates to the facilities, it needs full control and to take over the lease, which 49 U.S. Code § 24311 allows.
The station, which is owned by the Federal Railroad Administration (FRA) was leased out to a private company after the Union Station Redevelopment Act of 1981 was passed, according to The Washington Post.
In 1985, Union Station Redevelopment Corp (USRC), a non-profit organization, was given authorization to oversee the operations of the property. Under the lease with the USRC, the organization was required to pick a real estate developer to sublease the building.
After subleasing the building to Union Station Venture, and hundreds of businesses, restaurants and a food court being formed in the station, the sublease was sold to Ben Ashkenazy, a New York developer with USI, for $160 million, according to the outlet.
“Amtrak’s sudden attempt to takeover the operation of the entirety of Union Station is not ‘necessary’ to Amtrak’s operation, as evidenced by, among other things, fifty years of Amtrak operating out of less than fifteen percent (15%) of Union Station without ever claiming that it is ‘necessary’ for Amtrak to control the entire station,” USI argued in a filing.
USI continued to argue in its filing that Amtrak was “attempting to wrongfully use its limited condemnation power to obtain a property interest for financially motivated reasons.”
“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 to argue in the filing.
Among other disagreements, Amtrak claims $250 million is “just compensation” to take over Union Station, while an appraisal done by Rexmark claims it is worth, $730 million.
U.S. District Judge Amit Mehta is set to hear oral arguments in the case around 2 p.m., according to the Washington Examiner. Mehta’s decision could determine whether Amtrak would be allowed to take immediate possession of the station.
Michael Rebibo, the founder of Rexmark, has argued that if Amtrak is allowed to take over the lease, it would “effectively terminate the [existing] leases” at Union Station.
