Gov. Kathy Hochul got her win Thursday, but it came with a price tag the MTA isn’t advertising.

The Trump Administration agreed to release $58.6 million in frozen Second Avenue Subway funds just minutes before a federal judge was set to hear the MTA’s lawsuit in Federal Court of Claims. The U.S. Department of Transportation sent the letter to the transit authority confirming the deal hours before the scheduled hearing, ending a funding freeze that had stopped reimbursement payments for the East Harlem extension since last October.

Hochul didn’t wait long to post about it.

“We took the Trump Administration to court after they illegally froze funding for the Second Avenue Subway,” Hochul wrote on X. “Today, they backed down. The freeze is over.”

MTA Chair and CEO Janno Lieber matched her tone.

“It shouldn’t have taken seven months and a lawsuit to get here, but with the federal government’s concession today on the courthouse steps, the MTA can now confidently forge ahead,” Lieber said. “The billion-dollar contract approved at our March Board meeting is being awarded, and contractors are mobilizing right away.”

Here’s what neither of them said out loud: the MTA agreed to change how it picks contractors.

USDOT froze the funds back in October, telling the MTA its contracting practices ran afoul of new federal rules prohibiting the use of a firm’s minority- or women-owned business status as a selection factor. The MTA sued last month, arguing USDOT had breached an agreement it signed in 2023 under former President Joe Biden. That contract, the MTA’s lawyers contended, locked in the reimbursement terms before the Trump Administration’s directives took effect.

USDOT’s account of Thursday’s resolution is considerably less flattering to the MTA. The department said it agreed to resume processing reimbursement requests specifically because the MTA signaled it would stop weighting a contractor’s minority- or women-owned status in selection decisions. The department’s letter spells out what investigators found.

“DOT’s review uncovered troubling information revealing that MTA and its prime contractors appear to have engaged in contracting practices that consider race and sex as part of both the prime and subcontract bidding and contract awards, including through the use of ‘Diversity Compliance’ evaluation criteria,” the letter reads.

That’s a significant concession from the MTA, even if Hochul and Lieber are framing Thursday as a victory lap.

USDOT put the terms plainly: “In light of MTA’s agreement to take corrective actions, DOT has completed its review and is resuming the processing of reimbursement requests pursuant to normal procedures.”

Translation: the money’s back, but Washington got what it wanted from the MTA on contracting.

The Federal Transit Administration’s involvement here matters. It’s the agency that actually processes those reimbursement requests, and Thursday’s letter runs through that channel. The MTA’s public-facing position, check the MTA’s public project tracker for the latest, frames Phase 2 of the Second Avenue Subway as back on track without dwelling on what changed internally.

The frozen funds weren’t the only casualty of that October review. USDOT also suspended federal dollars for the Gateway rail tunnel project at the same time, hitting it with the same scrutiny over contracting practices. Thursday’s letter dealt specifically with the Second Avenue Subway money. Whether Gateway faces a separate resolution wasn’t clear by deadline.

For construction crews in East Harlem, the practical result is that work can move. The MTA board approved the contract at its late March meeting even while the freeze was still in place, a calculated bet that the legal pressure would eventually pay off. It did, at least on the dollar figure. The Second Avenue Subway Phase 2 extension is now funded again, seven months after Washington pulled the plug.

What happens next on the Gateway project, and whether the MTA’s revised contracting practices survive contact with the federal auditors who’ll keep watching, that’s the open question heading into the weekend.

“The billion-dollar contract approved at our March Board meeting is being awarded, and contractors are mobilizing right away,” Lieber said.

They’d better. There’s a lot of ground to make up in East Harlem.