(Bloomberg) --Port Authority of New York and New Jersey Chairman John Degnan said the agency should sell its real-estate holdings to fund critical transportation infrastructure such as a new tunnel under the Hudson River and a replacement for its neglected 66-year-old bus terminal near Times Square.
Failure to build a new $20 billion Hudson River tunnel and fund rail improvements has “catastrophic potential,” not only for the hundreds of thousands that commute to New York City from New Jersey but also for Amtrak’s Northeast Corridor, Degnan said at Bloomberg’s Future of Transportation Conference in New York City. The only rail links to Manhattan for Amtrak and New Jersey Transit are at capacity, while peak commuter demand is expected to double by 2030, according to the Port Authority.
“The time has long since past for us to be building new buildings,” Degnan said “We ought to sell any real estate we have that isn’t related to the transportation mission and leverage the money we get from that.”
Federal officials and the Governors Chris Christie of New Jersey and Andrew Cuomo of New York have agreed to split the cost of the new tunnel. New Jersey, whose Transportation Trust Fund will run out of money in July, and has a pension fund liability of more than $100 billion, doesn’t have enough money to pay for its share, according to Moody’s Investors Service.
A 99-page report released in December 2014 by both governors to overhaul the agency recommended phasing out real-estate ownership and development. Degnan, a former chief operating officer of Chubb Corp. and former New Jersey Attorney General, was nominated by Christie to chair the agency in 2014 after its dysfunction was was laid bare by a bridge lane-closing plot engineered by a top Christie official. The governor said he was unaware of the plan.
In addition to running New York City’s three major airports, marine terminals, bridges, tunnels and a commuter railroad, the Port Authority owns the 16-acre World Trade Center site. The agency has 90 percent ownership of 1 World Trade Center, the Western Hemisphere’s tallest building at 1,776 feet. It also controls retail areas and owns development rights at the site.
Degan’s call to sell Port Authority real estate is shared by New Jersey Democrats, including Senate President Stephen Sweeney.
Degnan also lamented that the Port Authority’s $27.6 billion 10-year capital plan has "virtually zero dollars” for a new bus terminal. Replacing the depot could cost as much as $10 billion. Some of the Port Authority’s New York commissioners want the agency, which has already spent three years analyzing the bus terminal, to consider building a new one in New Jersey. The Port Authority hasn’t done a good job proving to the public that it’s spending “very high tolls” and fees efficiently and on feasible “solution-driven” projects Degnan said.
“You can plan forever or move the project ahead.”
author_contact--With assistance from Elise Young. To contact the reporters on this story: Erik Schatzker in New York at [email protected] ;Martin Z. Braun in New York at [email protected] To contact the editors responsible for this story: Dave Liedtka at [email protected] William Selway
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