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New York’s most famous “someday” project just got a very 2026 plot twist. Now, the MTA is threatening to sue the Trump administration over delayed federal money it says is already owed.
Here’s the quick backdrop: Phase 2 of the Second Avenue Subway is the long-awaited extension of the Q train from 96th Street up into East Harlem, adding new stations at 106th and 116th Streets and a new terminal at 125th Street and Lexington Avenue—with connections to the 4/5/6 and Metro-North. The MTA’s own project page lists the status as “Construction,” with utility work underway and tunnel-boring targeted to kick off later in the decade.
As for the part that’s suddenly making headlines, the MTA says the federal government is sitting on more than $58 million in reimbursements tied to the project and it wants the money released by March 6 or else it will take the issue to court. The authority argues there’s no legal basis for the U.S. Department of Transportation to keep the funds frozen and says that plugging the gap would mean siphoning money from other transit priorities.
The dispute has its origins in a larger federal funding freeze that affected multiple big-ticket New York-area projects. According to the MTA, the Second Avenue funds were withheld after they’d already been awarded and the agency says that holdup could ripple through the entire project timeline since Phase 2 is built around four major contract packages. Two contracts are already out the door (utility relocation and major tunnel work among them), while the next big milestone (awarding a contract for excavation at the future 106th Street station) was expected soon. Now, the newest funding fight could slow that down.
Politically, everyone is doing their part. MTA chair Janno Lieber has framed it as a “time’s up” moment, while a spokesperson for Governor Kathy Hochul said the federal government needs to “stop playing games” and release the pledged funding. Hovering over it all is the uncomfortable reality that Phase 2’s budget assumes a major federal share—$3.4 billion under the project’s Full Funding Grant Agreement.
For East Harlem, it’s the same bottom line as ever: the subway is still coming, but just with a fresh round of courtroom brinkmanship on top of the tunnel dust.