THE PORT AUTHORITY OF NY & NJ
Press Release Article
PORT AUTHORITY BOARD APPROVES NEW LONG-TERM
AIRPORT/SEAPORT LEASE WITH CITY OF NEWARK
Agreement Will Mean Better Facilities and Service, Stronger Economy for Region
Date: Aug 29, 2002
Press Release Number: 91-2002
The Port Authority Board of Commissioners today approved the terms for new airport and seaport lease agreements with the City of Newark that will help ensure the long-term success of the facilities and their impact on the region’s economy, Port Authority Chairman Jack G. Sinagra announced today.
The new accord extends the agency’s leases of the City’s airport and seaport until 2065. The action follows the unanimous vote last week by the Newark City Council to approve the terms of the agreement.
“The Port Authority and the City of Newark have reached an agreement that is fair and equitable, and it allows the Port Authority to plan future investments at the airport that will not only improve service but also strengthen the region’s economy,” Chairman Sinagra said. “I commend Mayor James, City Council President Bradley and the entire Council for their leadership and their commitment to working with the Port Authority to reach this agreement.”
Port Authority Executive Director Joseph J. Seymour said, \"The new lease
represents fair value for the airport, given current revenues and projected revenue growth. At the same time, it assists the City by providing more reliable rental payments through 2065. And it meets our common goal of ensuring that the airport and seaport will get the investments it needs to generate jobs and economic activity, by supporting tourism, business travel, and the movement of goods through our region.
“All three of the Port Authority’s commercial airports, including John F. Kennedy International and LaGuardia, are vital gateways to the region, and the Port Authority is committed to ensuring the airports continue in that role.”
The airport’s investment program includes $3.8 billion worth of public and private redevelopment projects, both new construction and expansion of existing facilities across the airport. Major projects include expanded terminals, runway and taxiway improvements, a new roadway system, new parking garages, a new air traffic control tower and the successful AirTrain Newark airport rail link, which began service in October 2001.
Port Authority Deputy Executive Director Michael Decotiis, who worked closely with the City of Newark to reach an agreement, said, “The Port Authority’s new agreement with the City of Newark ensures that the airport will continue to be a world-class facility and a critical part of the region’s economic success for decades to come. At the same time, it will strengthen our working relationship with the City.”
That relationship will be enhanced by the creation of a new airport administrator position by the City. The new administrator, whose position is mandated under the lease agreement, will consult regularly with the Airport Manager to keep lines of communication open between the City and the Port Authority on matters regarding the airport’s capital plan as well as operational and financial issues.
The new lease also provides that the name of the airport shall be changed to “Newark Liberty International Airport.”
“The new name honors the heroes who have fought to protect our freedom and the heroes of September 11, while preserving Newark’s strong identity with its world-class airport,” Mr. Seymour said. Adding “Liberty” to the airport’s name was suggested last week by New Jersey Governor James E. McGreevey and New York Governor George E. Pataki as a fitting tribute to those who perished on September 11, as well as to all those who have served their country fighting for freedom and democracy.
Major provisions of the lease include:
• Extension of the lease until 2065. The current lease expires in 2031.
• A combined payment for the airport and the seaport of $115 million in the first year, and annual combined lease payments of approximately $80 million in years 2-5.
• Escalation of rent payments every five years proportional to the growth in airport and seaport revenues.
• The City of Newark would discontinue major elements of its pending arbitration and litigation.
• The City will designate an Airport Administrator, who shall be a City employee, who will meet on a regular basis with the Airport Manager to review operational and financial issues and the Port Authority’s progress in implementing the airport’s capital plan.
The existing lease with Newark provided for $35 million in payments last year. Over the last five years rent paid to the City has averaged $44 million and has ranged as high as $68 million in one year.
“Both the Port Authority and the City have recognized for some time that the terms were insufficient in light of the skyrocketing growth in the airport’s passengers and revenues in recent years,” Mr. Seymour said. “The new formula will result in steady revenues for the City that are both predictable and fair.”
The Port Authority of New York and New Jersey operates some of the busiest and most important transportation links in the region. They include Kennedy International, Newark Liberty International, LaGuardia and Teterboro airports; the George Washington Bridge; the Lincoln and Holland tunnels; the three bridges between Staten Island and New Jersey; the PATH rapid-transit system; the Downtown Manhattan Heliport; Port Newark; the Elizabeth-Port Authority Marine Terminal; the Howland Hook Marine Terminal on Staten Island; the Brooklyn Piers/Red Hook Container Terminal; and the Port Authority Bus Terminal in midtown Manhattan. The agency is financially self-supporting and receives no tax revenue from either state.