Port Authority of New York and New Jersey has approved a $4 billion lease proposal for Delta Air Lines and Goldman Sachs to build and finance the next phase of the LaGuardia Airport modernisation project.
Port Authority commissioners approved a proposed resolution to enter into a lease agreement with Delta and Goldman Sachs’ fund West Street Infrastructure Partners III, upon the completion of predevelopment requirements.
The lease, expected to be signed this year, effectively gives Delta – described as the “anchor tenant” in a resolution submitted to Port Authority – and Goldman Sachs ownership of LaGuardia’s Terminals C and D until 30 December, 2050. LaGuardia’s Terminals C and D are almost exclusively used by Delta.
The two are responsible for constructing and financing new terminal facilities including aircraft ramps, utility buildings, taxi and rental car facilities, parking garages and a pedestrian bridge. If the project is not finished within 18 months of its 2026 scheduled completion, the lease will be terminated, according to a resolution submitted to Port Authority.
Part of the deal includes Port Authority contributing $600 million to the project after various project milestones are completed, such as the submission of a parking and traffic mitigation plan and a Finding of No Significant Impact report by the Federal Aviation Administration. Delta and Goldman Sachs are committing an equity investment of around $300 million, matched with around $3.6 billion of debt financing.
Delta and Goldman Sachs will pay Port Authority a 50 percent concession from the existing terminal and the new terminal, which may include both fixed rent and rent calculated based on gross receipts from concessions. The lessees must also pay Port Authority ground rent on a per acre basis and building rent based on the number of gates at the existing terminal.
In the first phase of LaGuardia’s modernisation, the LaGuardia Gateway Partners consortium, led by French fund manager Meridiam Infrastructure, reached financial close on its $4 billion project to rebuild the airport’s Central Terminal Building.