Port Authority promises to end LaGuardia delays

After receiving a final 30-day extension from bidding teams, the agency says it will name a preferred bidder for the $3.6bn project at the end of May.

Officials of the Port Authority of New York and New Jersey (PANYNJ) vowed to put an end to the multiple delays that have stalled the redevelopment of LaGuardia, a project involving the demolition of the airport’s Central Terminal Building (CTB) and replacing it with a larger facility, estimated to cost $3.6 billion.

“Everybody seems to be in agreement they want this project to move forward,” the Port Authority’s chairman John Degnan said during a press conference after the agency’s latest board meeting. “And now it has to be done by the May meeting because we ensured each bidder that this is the final extension,” he continued. The Port Authority board’s next meeting is scheduled for May 28.

First announced in 2011 when the agency issued a Request for Information (RFI), the procurement process has been a lengthy one marked by numerous delays, the most recent one occurring in February when the Port Authority decided to postpone awarding the project, preferring to await the results of a design competition New York Governor Andrew Cuomo unexpectedly announced in October 2014 for both LaGuardia and JFK.

In January, Cuomo created an advisory panel charged with making recommendations to PANYNJ regarding the design competition otherwise referred to as the master plan.

“’LaGuardia deserves a comprehensive holistic redevelopment plan that will serve as the overarching guide throughout the airport’s modernization,’” Port Authority executive director Patrick Foye said during the board meeting, quoting from a letter the advisory panel sent to the agency on April 29.

“It’s my strong personal belief that the advisory panel’s recommendations are consistent with the ongoing procurement for LaGuardia in terms of timeline, and create significant potential for increased revenue generation, providing a return on the incremental investment to be made with the expanded Terminal B,” Foye said.

Among the recommendations the advisory panel has made and which the agency plans to incorporate in the current procurement, subject to Port Authority board approval, include creating a single unified terminal that involves filling the gap between Terminal B and Terminal C (the Delta Airlines terminal); having one main entrance to the airport that would serve as a ‘great hall’ located in Terminal B; and the consideration of a hotel with between 100 and 200 rooms.

Asked whether these recommendations and the central entryway may change the design scope of the project as it is currently being procured, Degnan replied: “I actually don’t think the recommendations contemplate integrating most of them into the procurement process itself but are future steps the Port Authority should consider taking subject to the availability of capital funding consistent with the capital and competing demands for capital.”

“It’s great from my perspective to have a master plan that has a vision of LaGuardia airport but […] incorporating anything into the RFP [Request for Proposals] process now that would delay the award of the Central Terminal Building would be unfortunate,” Degnan continued.

The agency had announced four shortlisted teams In July 2013, but less than a year later disqualified Aerostar New York Holdings, a consortium teaming Mexican airport operator Grupo Aeroportuario del Sureste (ASUR) and Highstar Capital, which also operates San Juan’s Luis Muñoz Marin international airport, the only airport that has been privatized in the US to date.

According to the Port Authority's website, the consortium was disqualified “due to procurement violations”.

The three other teams that have remained in the running since then are: LaGuardia Gateway Partners (Vantage Airport Group/Skanska Infrastructure Development/Meridiam Infrastructure); LGAlliance (Macquarie Infrastructure and Real Assets/Lend Lease Investments); and LGA Central Terminal Consortium (a joint venture between ADP Management & TAV Havalimanlari Holding/Goldman Sachs Infrastructure Partners).

However, in responding to questions, Degnan said that “two CTB bidders” have been asked to respond by May 11 to the preliminary recommendations, without specifying which two he was referring to. The agency has not announced any other disqualification.

While the Port Authority responded to a request for comment it did not clarify which two bidding teams are still competing for the project.

Several sources have told Infrastructure Investor that the Macquarie-led consortium was no longer in the running. However, the Australian fund manager declined to comment.

Built in 1964, Terminal B had a design capacity of 8 million passengers, significantly less than the 13 million passengers that passed through in 2013. However, capacity is not its only shortcoming.

According to the Port Authority, the CTB faces a wide variety of challenges to both airside and landside operations.

In addition to replacing the existing 835,000-square foot CTB with a new 1.3 million-square foot, 35-gate terminal building, the project would also entail replacing surrounding infrastructure.

The Port Authority’s recent board meeting was the first to be held at the World Trade Centre site, which it owns and manages, and where the bi-state agency was headquartered until the September 11, 2001 terrorist attacks. It has now relocated to its new offices at 4 World Trade Centre.

Founded in 1921, the Port Authority builds, operates, and maintains many of the most important transportation and trade infrastructure assets in the country, including John F. Kennedy International Airport, the Port Authority Bus Terminal and the George Washington Bridge.

The Port Authority receives no tax revenue from either the State of New York or New Jersey or from the City of New York. The agency raises the necessary funds for the improvement, construction or acquisition of its facilities primarily on its own credit.