NY-NJ Port Authority approves $4.5B of airport projects

Dive Brief:

The Port Authority of New York and New Jersey's Board of Commissioners has approved $4.5 billion for two AirTrain systems and other construction and development at New York City's LaGuardia Airport and John. F. Kennedy International Airport, as well as Liberty International Airport (LIA) in Newark, New Jersey
The board authorized more than $2 billion for a LaGuardia AirTrain that will connect the airport with the Long Island Railroad and midtown Manhattan; more than $2 billion on a replacement AirTrain system for the existing 3-mile monorail at LIA; $35 million to begin an initial master plan for the replacement of Terminal B with a new Terminal Two at LIA; and $445 million for early work on the $13 billion redevelopment of JFK.
The authority said that the board approved the spending in order to modernize its facilities and help create an improved customer experience but also to accommodate a growing number of passengers. This past summer, the three airports saw the greatest passenger volume ever and an increase of 1.9% for the first nine months of this year compared to the same period in 2018.

Dive Insight:

The AirTrain project at LaGuardia, which is still undergoing an environmental review, will use the design-build-operate-maintain (DBOM) delivery method. The authority has not yet awarded the construction contract for the project. The new AirTrain at LIA could also be delivered using the DBOM model, but the board is considering other options.

The work the authority will be able to fund now at JFK includes demolition of three existing buildings; relocation of an American Airlines employee parking lot; new aircraft parking; planning, design and construction of cargo facility upgrades; construction management services; program management services; and master planning.

The JFK project will be delivered as a public-private partnership (P3), and 90% of the project will be paid for with private funds. JetBlue and four international airlines will build two new terminals, and, according to the authority, American Airlines is also expanding its existing terminal there.

Jet Blue has already hired JFK Millennium Partners — American Triple I Partners, Vantage Airport Group and RXR Realty — to develop, design and build its new 74,000-square-foot terminal. Construction is expected to begin next year, with substantial completion scheduled for 2025. The first of 12 wide-body aircraft gates will be ready by 2023.

The authority is also planning on providing additional financial support in the amount of $2.9 billion for infrastructure, including a ground transportation center and airfield improvements, to support the new terminals at JFK.

In addition to the new terminals and infrastructure, the plan for JFK includes demolition of existing terminals; renovations to unused space; upgraded taxiways; improvements to the AirTrain system; and security improvements.

The authority issued a Request for Proposals for construction management and related technical services in September. The due date for those proposals is Nov. 6.

LaGuardia is in line for more than a new AirTrain as well. The first 16 gates at LaGuardia's new 1.2 million-square-foot, $4 billion Terminal B project are now open, courtesy of LaGuardia Gateway Partners (LGP), the P3 consortium that is providing design, construction, financing, operation and maintenance for the new facility. The main terminal will total 840,000 square feet, while two new concourses will offer up 35 gates. The project also includes a new parking garage, which LGP completed in 2018.

Earlier this year, Airports Council International-North America reported that U.S. airports are in need of $128 billion worth of infrastructure improvements but are also digging out from underneath almost $92 million of debt generated by previous projects. Although government investments have increased, according to Airport World, airport owners are finding that P3s offer a viable alternative to waiting on public funds or financing projects themselves.

However, P3s might not be the choice for every major airport project. Denver International Airport chose to move forward with a $1.8 billion contract for concession management and renovation of its Jeppesen Terminal with Great Hall Partners, a consortium led by Spanish company Ferrovial, but severed that relationship in August after the project fell behind on its schedule and started amassing cost overruns. After announcing that it would not select another P3 partner to finish the project, the airport recently announced that it has selected Hensel Phelps to lead construction and Stantec as the new head design firm, pending approval by the Denver City Council in November.