Port Authority Execs Delay $4B LaGuardia Terminal Redevelopment Takeoff
By Terence Cullen February 18, 2016 5:53 pm
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A vote to move forward on a new $4 billion terminal building at LaGuardia Airport has been grounded until next month.
Board members of the Port Authority of New York & New Jersey opted today to push a scheduled vote on approving a ground lease agreement with a consortium of developers to next month in order to fully review the terms.
In the meantime, Executive Director Patrick Foye will continue negotiations with the airport development group, LaGuardia Gateway Partners, as per a new resolution, which also allocates $50 million for infrastructure work surrounding the Queens building, otherwise known as Terminal B.
The lease agreement “is very complex,” Scott Rechler, the vice chairman of the bi-state agency and chief executive officer of RXR Realty, said in a post-board meeting press conference. “So now all the commissioners will get a chance to review it and we’ll be back next month.”
One prominent real estate developer and airport advocate is concerned that the overhaul will be seriously delayed.
“We’re concerned that taking the full authorization for Terminal B off the board agenda today adds uncertainty and delay,” Joseph Sitt, the head of Thor Equities and founder of airport redevelopment group Global Gateway Alliance, in prepared remarks. “Now the agency should move quickly to provide clear, firm budgets and timelines that give the public confidence in the long-term viability of the entire project.”
Port Authority executives reassured after the board meeting that the delay wouldn’t impact the time table for sealing the deal or construction on the project. Mr. Foye said during the board meeting that the deal was still slated to close this April, followed by finalizing the financing in May. The project is set for completion in 2021.
“I don’t think they’re going to change in a substantial way,” said Port Authority Chairman John Degnan in relation to the currently estimated cost of the project. “There may be slight refinements, but general neighborhood of what the resolution specified in terms of costs is consistent with what I believe will pass in March.”
The $50 million passed in today’s ruling will go toward construction on a parking garage to the west of the central terminal and infrastructure work on roads servicing the structure. That work is part of the existing plan for a new central terminal.
Gov. Andrew Cuomo in July 2015 announced a broader plan to rebuild the entire airport on top of the long-standing central terminal redevelopment. While a complete price tag hasn’t been chiseled out, Crain’s New York Business in September reported that the entire overhaul could cost up to $8 billion.
Meanwhile, the cost of rebuilding the central terminal building alone has ticked up substantially. A 2014 survey put the overhaul at a total cost of $3.6 billion, according to The Wall Street Journal, which earlier this week reported that design changes had increased the cost to $4.2 billion.
LaGuardia Gateway Partners—a development group led by construction giant Skanska, developer Vantage Airport Group and Meridiam Infrastructure—was selected in May 2015 to demolish and replace the existing 52-year-old terminal building through a lengthy bidding process. The group will build a new structure closer to the Grand Central Parkway along with two adjacent structures. As part of the lease, the group will design and build the terminal, become its operator and manager after it is finished and collect revenues from airlines and tenants.
