FOR IMMEDIATE RELEASE
November 29, 2004
MAYOR MICHAEL R. BLOOMBERG AND GOVERNOR GEORGE E. PATAKI ANNOUNCE CLOSING OF MULTI-BILLION DOLLAR AGREEMENT TO EXTEND AIRPORT LEASES
City and Port Authority Finalize Agreement Extending Stewardship of John F. Kennedy International and LaGuardia Airports through 2050; Port Authority Delivers $780 Million to City as Part of Agreement
Mayor Michael R. Bloomberg and Governor George E. Pataki today announced the Port Authority of New York and New Jersey has delivered a payment of approximately $780 million to the City today to finalize a lease extension agreement that significantly raises annual payments on John F. Kennedy International and LaGuardia airports through 2050. The $780 million includes a $500 million lump sum and a $90-million-per-year increase over the present minimum annual lease payment of $3.5 million. The agreement includes payments from January 2002, through today, plus interest. The minimum total value of the lease to the City through 2050 is $5 billion. As part of the lease-extension agreement, the Port Authority is also making a $100 million commitment to fund capital projects in Queens, up from $50 million when the preliminary agreement was announced in October 2003. This agreement has removed the uncertainly that surrounded the future of New York City's commercial airports and ensures that necessary airport upgrades move forward.
"This historic agreement between the City of New York and the Port Authority will go a long way toward securing the City's economic vitality by making sure our airports are on solid financial footing and the City gets the financial compensation it deserves for these properties," said Mayor Bloomberg. "Our airports are gateways to New York, and the City is playing a significant role in their operations, meaning that, for the first time, the City is having a say in how the airports are run. I want to thank Governor Pataki and the Port Authority for their extraordinary cooperation that allowed us to end this long-standing dispute and fulfill the pledge I made to restore our relationship with the Port Authority and to ensure the City and the borough of Queens are fairly compensated for our airports."
"More than 60 million passengers use JFK and LaGuardia airports each year and we will make sure that these gateways continue to proudly welcome travelers into our City," said Governor Pataki. "This agreement promises hundreds of millions of dollars to New York City immediately and billions of dollars over the life of this lease. Thanks to our partnership with Mayor Bloomberg, we have delivered a solid agreement that will benefit the City for years to come and ensure that our airports continue to be managed with excellence. I am proud that we are able to help the City while continuing the proud tradition of the Port Authority operating these world-class airports for more than 40 years."
The Port Authority will allocate $60 million to study a direct connection from Lower Manhattan to JFK, and $30 million to study extending the PATH to Newark. If the projects are determined to be feasible from an engineering, operational and financial standpoint, the Port Authority would include funding for these projects in its Capital Plan - the extension to Newark at an estimated cost of at least $500 million, and contribute an equivalent amount for airport access to JFK.
The airport lease agreement provides for the establishment of a Joint Airport Board to review operations and performance at JFK and LGA and enhance cooperation between the City and Port Authority with respect to the management of JFK and LaGuardia. The eight-member board is made up of four members from each entity. The Port Authority's members are its Chief Operating Officer, Director of Aviation and General Manager of each airport. The Mayor will appoint the remaining four, one of whom will be the Queens Borough President. The board will be funded by both entities using a small percentage of the City's rent payments plus an additional contribution from the Port Authority.
In addition, the agreement establishes performance and service standards to improve operations at JFK and LaGuardia. The Port Authority will deliver to the City and the board a quarterly report on a variety of performance indicators, such as capital spending, passenger service and flight delays. It also includes the creation of the Passenger Service Monitor Program, which will survey passengers at least once a year to determine their opinion on services such as cleanliness, signage, information staff, safety, parking, ground transportation and AirTrain Service.
In addition, the City will provide the board with regular updates on the Air Cargo Access Plan currently being developed. Air cargo activity at the region's three airports is estimated to generate $10.9 billion in economic activity, $3.7 billion in wages and supports 85,000 jobs. Despite the area's strong position, access to the airports is constrained, hampering traffic and economic growth. To improve vehicle access to the airports and ease congestion on residential streets, the City is creating an Air Cargo Access Plan that will address chronic roadway bottleneck locations and other impediments.
"Making necessary investments in our infrastructure is a critical component of our efforts to secure New York City's position as the world's greatest place to do business," said Andrew Alper, President of the New York City Economic Development Corporation. "Improving our airports is among our most significant infrastructure improvement projects; our airports support an enormous number of jobs and provide far-reaching benefits to all of our major industries."
Port Authority Chairman Anthony R. Coscia said, "The successful conclusion of this lease agreement is a major milestone in the Port Authority's distinguished history. It will allow us to effectively plan long-term investments at New York's major airports, which support thousands of jobs each year and foster economic development and job growth throughout the region. During the next 10 years, we will continue to make significant investments at these two facilities and at Newark Liberty International Airport, enhancing an airport network that generates enormous economic benefits for the region."
Port Authority Vice Chairman Charles A. Gargano said, "Today we are delivering on our commitment to New York City in providing this payment. Both JFK and LaGuardia airports are unequalled as economic engines, contributing more than $28 billion in economic activity in the New York metropolitan area. At the same time, they provide about 50,000 on-airport jobs and support more than 270,000 additional jobs in the region, generating in excess of $9 billion in wages. The PILOT agreement for the World Trade Center Site also will act as an economic stimulus for the city, state and region."
The Port Authority, which has operated the airports for more than 55 years, originally signed a 50-year lease in 1947 that was extended to 2015 under an agreement reached in 1965. The City has been negotiating with the Port Authority for more than a decade on a lease extension.
Edward Skyler / Jennifer Falk (212) 788-2958
Lynn Rasic (Governor)
Michael Sherman / Janel Patterson (Economic Development Corporation)