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Home / News & Reviews / News Wire / Report says Amtrak will see few projected benefits from office-building purchase

Report says Amtrak will see few projected benefits from office-building purchase

By | May 16, 2022

Inspector General says Wilmington, Del., structure will see only a handful of the workers it was supposed to house

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Amtrak logoWASHINGTON — Amtrak’s purchase of a Wilmington, Del., office building will see few of the cost savings and personnel consolidation efforts the company envisioned because it failed to verify its plans, according to a new report from the Amtrak Office of Inspector General.

The report, released Friday, is available in full here, although with some redactions.

Amtrak purchased the office building for $41.1 million in May 2020 and has begun a $37 million retrofit of the structure. It had said the purchase would eventually result in savings of $50 million as it consolidated dispatchers, information technology workers, some Amtrak police, and other employees from locations around the country, allowing it to save on leasing costs elsewhere.

But of the more than 250 dispatchers it planned to bring to the building from Boston, New York, Chicago, Washington, and its current operations center elsewhere in Wilmington, only about 40 from Washington and Wilmington will be moved. The company determined it could not relocate dispatchers in Boston and some in New York because of co-dispatching responsibilities with local commuter agencies, and ultimately dropped those in Chicago and the others in New York from the plan. Similarly, only 25 to 35 IT positions will be located in the new building, instead of the more than 400 originally planned.

Amtrak is now updating its plan for the structure to reflect actual spending to date and revise assumptions for its use; the report recommends the company’s executive vice president, delivery and operations, and chief financial officer, verify the new assumptions and the accuracy of projected costs and benefits, to give decisionmakers necessary information on how or if to proceed.

In its response, Amtrak agreed with that recommendation and said officials will ensure that the program “follows the latest development in a thorough business case in support of any future funding requests.”

 

7 thoughts on “Report says Amtrak will see few projected benefits from office-building purchase

  1. Yes, the current President is from Delaware. Surprise? Not entirely. Will things move after he leaves office? Maybe.

  2. While I am no fan of Biden, the fact that the purchase was made in May, 2020 [and probably initiated before then] leads me to believe he had no role in it. I would not be surprised to learn the state’s two senators were a factor in its purchase as is too often the case.

  3. While we hear about this because Amtrak is a public entity, I work for a very large infrastructure-heavy company and I have seen a lot of wasteful real estate decisions over the years that I am sure cost the company a lot of money. It just seems to be the nature of large corporations to keep trying to save money in real estate and failing.

    1. Um, Ford Motor Company, buying the Michigan Central Station and rebuilding it for countless millions — so it will end up with third-rate office and tech space it doesn’t even need. It is tearing down emptied-out buildings in its Dearborn/ Allen Park tech center.

  4. You would think they should have known about the co-dispatching obligations BEFORE purchasing the building and moving ahead with the consolidating “all” dispatching there?

    1. Yeah, you would think. But Amtrak has a President/CEO, a Board Chair, and a “team” of airline guys Richard Anderson brought in who I kinda think have never gone out in the field and experienced train operations and on board services. So, what could we expect?

  5. How pathetic, given one of the excuses I have heard for retaining Board Chair Coscia well beyond his term was his knowledge of real estate; how that shrewdness would benefit Amtrak financially. At this point, have to wonder how Coscia and Schumer may be the only ones who benefit from Hudson and Sunnyside Yards…

    Given this absolute failure to properly vet this real estate deal only adds to the persistent stain on Amtrak’s leadership, as we consider how experienced employees were forced out so corporate management could achieve a higher bonus from the cost savings; the decision to push out trained employees during the pandemic without having an action plan to return them, let alone an HR to administer the plan; lack of daily schedules and resultant revenues despite infusion of federal funds.

    Such failure is consistent with the culture Coscia/Gardner have built, allowing for no accountability for their incessant poor judgment. Would the Santa Fe ever tolerate operating in this manner? Hell, Claytor, Gunn, nor Reistrup would never have allowed Amtrak to act in such a less than mediocre manner, disdainful of the tax dollars that keep it afloat.

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