Archive for PANYNJ
Public transit subsidies are always a rather thorny issue when it comes to politics. There’s a compelling argument to be made that public transit should be subsidized to some degree or other as it allows people who can’t afford to live in downtown/center city areas relatively cheap access to job and cultural centers as well as other social services. There’s also an argument to be made that transit users should cover the operations and capital costs of the system, but until the nation’s drivers start footing all the bills for road maintenance and expansion, I have a tougher time buying into that argument.
In New York city, after years of divestment by state and city officials, riders carry most of the burden of their subway system. New York City Transit still enjoys the benefits of the MTA, but subway riders foot around two-thirds of the cost of a subway ride these days. Based on recent studies, in fact, the per-passenger subsidy is around $1. As far as American transit systems go, that’s a tiny subsidy, and we need look no further than our own city to find a transit network that seems to bleed money.
As Business Week explored recently, the Port Authority’s PATH system is woefully inefficient. PATH, noted the magazine, is more expensive than any comparable system and shouldn’t even be compared to Transit’s subway network. According to recent studies, the per-passenger cost of a PATH ride to Port Authority is $8.45, and the average fare of just under $2 doesn’t even cover a quarter of these costs. The New York City subway on the other hand relies on subsidies of around $1.11.
Business Week tried to explore why these cost discrepancies are so pronounced. As Port Authority auditors and watchdogs grow increasingly wary of the unruly agency, the money PATH is bleeding is coming under increased scrutiny. Martin Z. Braun reports:
The agency faces challenges across its portfolio of operations. Spending on policing has doubled since the Sept. 11, 2001, terrorist attacks and now consumes almost a quarter of the agency’s operating budget, Bloomberg News reported in June. Last year, its marine terminals lost 2 percentage points of market share. PATH has been a financial millstone around the Port Authority’s neck since it took over the bankrupt Hudson & Manhattan railroad in a 1962 trade between New Jersey Governor Richard Hughes and New York Governor Nelson Rockefeller. In exchange for getting the Port Authority to take over the H&M Hudson Tubes, as the rail line was known at the time, Hughes allowed Rockefeller to use the Port Authority to develop the World Trade Center in lower Manhattan…
While public officials and transportation analysts have pointed to the railroad’s low fares and its lack of state and federal aid to explain its strained finances, less attention has been paid to expenses. The 2012 national transit data include the impact of Hurricane Sandy, which struck Oct. 29 and knocked out PATH service. Even so, PATH’s cost per hour the year before was also higher than the New York subway system’s, by about two-and-a-half times. Federal Railroad Administration regulations, higher maintenance costs and round-the-clock service have boosted spending compared with other transit systems, Port Authority officials say.
A major difference between PATH and the New York subway system is that the trans-Hudson rail is regulated by the FRA while the Federal Transit Administration oversees the subway. The FRA imposes stricter safety standards and labor requirements, imposing higher costs, Port Authority officials said. Before each run, PATH workers must test a train’s air brakes, signals and acceleration, Mike Marino, PATH’s deputy director, said in a telephone interview. When a train gets to its terminus, workers repeat the test. In addition, every 90 days all of PATH’s rail cars undergo a three-day inspection at a facility in Harrison, New Jersey. Brakes, lights, communications, heating and air conditioning, signals and odometers are all checked, Marino said. “It’s a very intense inspection on every piece of rolling stock,” he said.
According to Business Week, PATH has tried to lobby for a move to the FTA rather than the FRA, but the FRA has resisted the switch as PATH “runs parallel to high-speed trains operated by NJ Transit, Amtrak and freight-line CSX Corp.”
The real question is what comes next. New Jersey officials seem keen to dump PATH on the MTA, but that wouldn’t solve the cost problem. It’s not clear that New York would accept sole responsibility for a bi-state rail system, and without the FTA assuming oversight, the MTA wouldn’t readily embrace taking on a money-losing proposition that’s committed to an unnecessary multi-billion-dollar Newark Airport extension.
New Jersey Transit too remains a possible destination, but that could lead to service reductions — a scary thought for a system that has helped drive renaissance efforts in Jersey City and Hoboken. New Jersey politicians do not view an NJT merger as a solution either. This too seems simpy to shift the problem from one agency to another.
PATH’s cost issue is clearly not sustainable, but it can operate with some level of subsidy. The question now focuses around how to reduce that subsidy without decreasing service or significantly upping fares. Anyone have any brilliant ideas?
My thoughts on the Santiago Calatrava-designed PATH World Trade Center Transportation Hub are no secret. It’s a multi-billion-dollar monument to the Spanish architect’s ego that does very little to enhance transit capacity or the aesthetics of the World Trade Center area. As the structure has arisen, it’s lack of visual appeal has become more obvious, and although its completion is a fait accompli, it’s still worth dwelling on the process. In fact, I’ve asked Port Authority, through a FOI request, for information regarding fees paid to Calatrava and his firm.
Meanwhile, in The Post on Sunday, Steve Cuozzo absolutely eviscerated the transportation hub. He doesn’t chart new ground, but his takedown is, to borrow an overused phrase, epic. He writes:
With each passing week, the embarrassing ugliness of this $4 billion boondoggle designed by Santiago Calatrava — a hideous waste of public money — grows plain for all to see. Not everyday-ugly, like a tacky brown tie or dress, but LOL-ugly. What are those spiky “ribs” and “wings” doing next door to 3 World Trade Center and the memorial pools? What happened to the “bird in flight” we were promised?
The elephantine excess won’t be fully realized until the scheduled opening at the end of 2015. But as the dragon slumbers to its feet, enough of it’s reared its head to give a sense of what the finished fiasco will look like: a self-indulgent monstrosity wildly out of proportion to everything around it, and 100% aloof from the World Trade Center’s commercial and commemorative purposes.
Hey, what’s wrong with a train station? Nothing — but today’s 40,000 daily PATH riders make do very well with the current temporary station. And the Hub’s vaunted subway line connections could have been more efficiently achieved with a simple passageway than an “Oculus” longer and taller than Grand Central Terminal’s main hall.
Having seen the parts of the Hub that are already open to the public, I’ve witnessed first-hand what Cuozzo terms “sterile and intimidating.” The floors are solid, slippery marble, and the dominant color is white — not what you’d choose for a New York City subway station bound to attract dirt, debris and all manner of grim from the surrounding environment. It’s a museum to an architect in which practicality was an afterthought if it was even a thought at all.
Cuozzo questions the architectural support for the structure and ponders who will shop in the underground mall. The latter point is less of a concern because New Yorkers and tourists tend to gravitate toward these kinds of shopping centers if the mix of retail is right, but the fact that not one but two under-built transit hubs with high-end retail are opening a block apart from each other at a time when the city desperately needs more space for housing makes me question the spending priorities and long-term planning for the city’s transit agencies.
Ultimately, it’s too late to stop the transit hub, and it will be with us for decades. But it’s a reminder of excess and poor planning. Will we learn anything from this mistake or just be doomed to repeat it, billion-dollar overrun after billion-dollar overrun, while transit capacity concerns go ignored yet again?
No one in his or her right mind would ever mistake the Port Authority Bus Terminal as a pleasant place to spend any amount of time. It’s dirty and dingy with little in the way of amenities and much in the way of dripping and collapsing ceilings, permanent residents and an overall feeling that it’s best days aren’t just decades in the past but may never have happened at all. The building is an eyesore amidst Midtown Manhattan and somehow manages to shepherd 225,000 per day through its doors. Imagine if it were actually something approaching state of the art.
At some point, the Port Authority will have to figure out how to tear down and rebuild Port Authority without disrupting travel plans. They should get around to advocating for permanent bi-directional bus lanes through the Lincoln Tunnel as well. For now, though, the PA is going to slap $90 million worth of improvements on the Bus Terminal and call it a day — or a Quality of Commute program. The problem is that $90 million in New York City just doesn’t go that far.
In a release on Wednesday, the PA heads announced the new expenditure. “The Port Authority Board of Commissioners today authorized $90 million to a “Quality of Commute’ improvement program for the Port Authority Bus Terminal,” Executed Director Pat Foye and Deputy Executive Director Deborah Gramiccioni said. “The functionally obsolete facility no longer meets the transportation needs of the hundreds of thousands of riders that pass through the terminal every day, and the Port Authority is committed to identifying comprehensive improvements within the context of its existing Capital Plan. This initiative will make interim improvements to the terminal as the agency explores a program to deliver a redeveloped facility.”
The exact details of the investments will be unveiled at a Port Authority board meeting in September, but PA officials let slip some details surrounding the plans. According to Foye, the bus terminal will see an improved heating and air conditioning system, better cellphone and wireless service and a more aggressive outreach program for the homeless New Yorkers who, for better or worse, call the bus terminal home. The bathrooms too may see some upgrades.
Ultimately and unfortunately, it’s insulting to pigs to say this is putting lipstick on a pig. The Port Authority Bus Terminal, simply speaking, is an embarrassment and likely an impediment to more transit service in New York City. People eschew buses because trying to travel through the terminal is a singularly unpleasant experience. But something is better than nothing.
At some point, the Port Authority will have to make some tough decisions with regards to its bus terminal. The agency estimates that it could take 10-15 years and at least $1 billion to replace the thing (though a future replacement could include lucrative air rights and development upward). For now, we get air conditioning and some better cell service. I guess that’s forward progress, but it sure ain’t reinventing something that sorely needs to be reinvented.
A few updates on some stories I’ve been following:
MTA Reinvention Commission kicks off meetings
Last week, I shared my thoughts on the MTA Reinvention Commission and the august body’s need to focus on overhauling how the MTA works and how the agency does business. Today, the group kicked off their first set of meetings. (You can follow along via webcast.)
So far, the panel has spent a lot of time talking about affordable housing, and I’m growing worried that their focus is wrong. Reinventing the MTA requires asking hard questions and proposing top-to-bottom solutions for streamlining procurement, cutting extremely high capital costs and improving agency operations. It’s not about using the MTA to advance city policy goals. The MTA, I would argue, already does more than anything else for affordable housing than any one agency in the city, and the early framing on policy goals rather than MTA problems bodes ill for this Commission’s future, especially when a largely unfunded $30 billion capital plan looms. Affordable housing, for instance, is an outcome of sound transit policy, and without reinvention such that subways do not cost over $2 billion per mile, the policy goals will remain elusive.
On the bright side, Dana Rubinstein spoke with the Commission’s heads, and they expect results. “I don’t think any of these very busy people, any of these very important and smart people, would be involved in this if they didn’t think that these recommendations would be carried out,” Ray La Hood said to Rubinstein. Hopefully, the recommendations are expansive enough.
amNY: Where is New York’s better bus terminal?
The Port Authority Bus Terminal is low-hanging fruit, but it pays to remember just how sorry a spot it is. In an editorial today, amNew York urges the Port Authority to redevelop the bus terminal. “Midtown Manhattan urgently needs a brand-new, world-class bus station,” and with air rights value at an all-time high, the money to realize this dream — $500 million to $1 billion depending upon the scope of the project — could materialize.
G train shutdown looms as ferry questions remain
When Greenpoint’s India St. ferry stop collapsed earlier this year, everyone in the know knew that city had around four months to fix the dock before the summer shutdown of the G train for Sandy-related repairs. Now, with 11 days to go before the five-week outage, the ferry stop is not yet open, and no one knows when repairs will be complete. Brooklyn politicians are demanding answers, but concrete details are not forthcoming. This is one spot sorely in need of its ferry service and soon.
As the debate over the future of the Port Authority has roiled the region, local politicians have resisted putting forward calls for reform. Gov. Chris Christie a few weeks ago even warned of going “too far” with calls to overhaul the bi-state agency. That’s a laughable position coming from the Jersey side of the river, but it’s ultimately not one likely to win the day. Reform will come, one way or another, even if it takes a few years.
Yesterday, Chuck Schumer, New York’s senior senator, chimed in on the issue and offered up his seven-point plan to reform Port Authority. The speech is available on Schumer’s website, and he ultimately called for the PA to get back to its roots. “The Port Authority, in an era of growth and imagination, was hewed, indivisibly, to its core mission: improving the Port District and thinking deeply about its long-term infrastructure needs,” Schumer said. “Over the past several decades, the fabric binding the Port Authority to that core mission has frayed, slowly unwinding as states saw an opportunity to use authority funds to cover budget shortfalls and finance pet projects. More frequently now than ever, the Port Authority has come to be seen as the proverbial honey pot, a cookie jar, a rainy day fund – whatever metaphor you prefer – for state projects outside the Port’s core mission.”
In the speech, Schumer offered an olive branch to the Port Authority. He would see through legislative changes the PA needs to effect reform if the agency asks. Here’s his seven-point plan:
First, the Port Authority should come back with a process for the nomination and confirmation of an Executive Director by the Board of Commissioners, not by the Governor of one state or the other. Second, the Port Authority should propose administrative changes vesting full managerial authority and responsibility of the entire Port Authority organization with the Executive Director. Third, the Port Authority should establish a permanent process to nominate individuals as Commissioners to the Port Authority who possess a comprehensive financial, engineering and planning background, and no conflicts of interest related to the Port Authority’s core mission. It should be clear that these commissioners have a fiduciary duty to the Port Authority
Fourth, the Port Authority should submit procedures that will allow the Port Authority to have a detailed annual operating budget and a multi-year financial plan that can be adopted after opportunities for public review and comment. Fifth, they should establish procedures that will allow the Port Authority’s capital budgeting to be guided by a long-term capital strategy that is regularly revised – I suggest at least annually. This plan should show how the Port is prioritizing and financing projects, and only then should it be adopted after opportunities for public review and comment.
Sixth, the members of the board should submit a plan to end spending on non-revenue generating state projects that are outside the core mission. Seventh, the Port Authority should end the acquisition of new non-revenue generating facilities and projects outside the boundaries of the Port District that are not core to the Port Authority’s central mission.
Much of Schumer’s speech is targeted toward Christie’s pet projects — the Atlantic City Airport plans come to mind. But Schumer also issued his own call for a Stewart Airport rail link, a long-standing desire that I dismissed as early as August of 2007. He also discusses the long-awaited Cross Harbor Freight Tunnel, a rail project that would create problems for the Triboro RX line. These are, Schumer argues, “just the kind of project that the early Port Authority leaders would embark upon.”
There was, however, one part of the speech I thought worth a second look. Although it’s been a while, Schumer spoke about the ARC Tunnel as well. He has not held back in his criticism of Christie’s controversial decision to cancel the tunnel and again spoke out against the move. “Diverting funds from the ARC tunnel for the Pulaski Skyway was the wrong move,” Schumer said. “The ARC tunnel was a high-priority and already fully funded. It was a bad idea to stop it and a worse idea to cannibalize it for projects that ought to have been funded by the New Jersey Department of Transportation, perhaps even with some help from federal highway dollars. The Port Authority should have pressed forward on ARC. As I said then, ‘It was like eating our seed corn.’”
Originally, the Port Authority had pledged $3 billion to the ARC Tunnel, and New Jersey had to pick up the rest of the money that didn’t come from the feds. This gave Christie the power to cancel the project, and as soon he could, he gave it the axe. While I understand the funding structure, I never could comprehend the insular nature of Christie’s decision. ARC wasn’t just a one-state project. It had an affect on New Jersey and New York, Connecticut and Pennsylvania, Massachusetts and Maryland, and the entire Northeast Corridor. Anyone riding the Acela, the Empire and Keystone Services, the Crescent, the Vermonter and everything in between would have enjoyed the benefits of ARC, but Christie himself made the decision to kill it.
Going forward, we don’t know what the Port Authority will become after Christie and Cuomo are gone. Maybe New York and New Jersey can move beyond tit-for-tat land deals and can restore some luster to the Port Authority. Hopefully, when we do, we can avoid repeating the mistakes of the past and think beyond the provincialism of state borders when major projects are considered, funded and seen through. That would be a strong lasting legacy for anyone looking to reform the Port Authority.
Heading to Newark Airport after May 1? Boy, are you in luck. From May 1 through approximately July 15, the Newark AirTrain will be shut down, and Amtrak and New Jersey Transit trains will not stop at the Newark Liberty International Airport stop. To access the airport, the Port Authority first, sadly, urges people to drive. Second, the PA notes that shuttle buses will provide service from Newark Penn Station. (For more details, check out the Port Authority’s website. This is a pretty big deal.)
From 11:45 p.m. Friday, April 25 to 5:00 a.m. Monday, April 28, Manhattan-bound 1 trains run express from 145 St to 96 St due to steel repairs from 125 St to 133 St.
From 11:45 p.m. Friday, April 25 to 5:00 a.m. Monday, April 28, Bronx-bound 1 trains run express from Chambers St to 14 St due to Mulry Square vent plan upgrade.
From 11:45 p.m. Friday, April 25 to 6:30 a.m. Sunday, April 27, and from 11:45 p.m. Sunday, April 27 to 5:00 a.m. Monday, April 28, Bronx-bound 2 trains run express from Chambers St to 14 St due to Mulry Square vent plan upgrade.
From 11:45 p.m. Friday, April 25 to 5:00 a.m. Monday, April 28 Bronx-bound 4 trains skip Fulton St due to Fulton Street Transit Center completion work.
From 5:45 a.m. to 10:00 p.m. Saturday, April 26, and from 7:45 a.m. to 10:00 p.m. Sunday, April 27, Bronx-bound 5 trains skip Fulton St due to Fulton Street Transit Center completion work.
From 7:30 a.m. to 11:00 p.m. Saturday, April 26, and from 11:00 a.m. to 9:00 p.m. Sunday, April 27, 6 trains run every 16 minutes between 3 Av-138 St and Pelham Bay Park due to track panel installation at St Lawrence Av. The last stop for some Pelham Bay Park bound 6 trains is 3 Av-138 St.
From 11:45 p.m. Friday, April 25 to 5:00 a.m. Monday, April 28, Flushing Main St-bound 7 trains run express between Mets-Willets Point and 74 St-Broadway due to CBTC signal work.
From 11:30 p.m. Friday, April 25 to 5:00 a.m. Monday, April 28, A trains are suspended between Jay St-MetroTech and Utica Av in both directions due to track tie renewal north of Hoyt-Schermerhorn. Transfer between A trains and free shuttle buses at Jay Street-MetroTech or Utica Av.
From 6:30 a.m. to 11:30 p.m. Saturday, April 26, and Sunday, April 27, C trains are suspended between W 4 St Wash Sq and Euclid Av due track tie renewal north of Hoyt-Schermerhorn.
From 11:30 p.m. Friday, April 25 to 5:00 a.m. Monday, April 28, Manhattan-bound E trains are rerouted on the via the F line after 36 St in Queens to W 4 St Wash Sq (E trains travel via the 63 St and 6 Av corridors, stopping at F stations) due to Sandy related work in the 53 Street tunnel. Free shuttle buses operate between Court Sq-23 St and 21 St-Queensbridge, stopping at Queens Plaza.
From 12:15 a.m. to 6:30 a.m., Saturday, April 26 and Sunday, April 27, and from 12:15 a.m. to 5:00 a.m. Monday, April 28, Jamaica Center-bound E trains run express from Queens Plaza to Forest Hills 71 Av due to tunnel lighting installation south of the Jackson Hts Roosevelt Av.
From 12:15 a.m. Saturday, April 26 to 5:00 a.m. Monday, April 28, Queens-bound E trains skip 75 Av and Briarwood Van Wyck Blvd due to CPM signal modernization at Forest Hills 71 Av, and Kew Gardens Union Tpke.
From 9:45 p.m. Friday, April 25 to 5:00 a.m. Monday, April 28, Queens-bound F trains are rerouted via the E line from Jackson Hts Roosevelt Av to 47-50 Sts Rock Ctr due to Second Avenue Subway work at Lexington Avenue.
From 12:15 a.m. Saturday, April 26 to 5:00 a.m. Monday, April 28, Queens-bound F trains skip Briarwood Van Wyck Blvd and Sutphin Blvd due to CPM signal modernization at Forest Hills 71 Av and Kew Gardens Union Tpke.
From 3:45 a.m. Saturday, April 26 to 10:00 p.m. Sunday, April 27, Jamaica Center Parsons/Archer-bound J trains run express from Marcy Av to Broadway Junction due to track work from Flushing Av to Myrtle Av, and track repairs near Broadway Junction.
From 4:00 a.m. Saturday, April 26 to 10:00 p.m. Sunday, April 27, M trains run every 20 minutes due to track work from Flushing Av to Myrtle Av, and track repairs near Broadway Junction.
From 12:01 a.m. Saturday, April 26 to 5:00 a.m. Monday, April 28, Coney Island Stillwell Av-bound N trains run local between 36 St and 59 St due to track tie renewal south of 36 St.
From 6:30 a.m. to 12 midnight Saturday, April 26, and Sunday, April 27, Queens-bound R trains run express from Queens Plaza to Forest Hills 71 Av due to tunnel lighting installation south of Jackson Hts Roosevelt Av.
From 11:30 p.m. Friday, April 25 to 6:00 a.m. Sunday, April 27, and from 11:30 p.m. Sunday, April 27 to 5:00 a.m. Monday, April 28, R trains are suspended between 59 St and 36 St in Brooklyn due to track tie renewal south of 36 St.
Just a few weeks ago, the Rudin Center released a report on the future of the Port Authority that cast the PATH train’s fate into question. PATH, you see, is a drag on the PA’s finances as fares don’t come close to covering the exceedingly high operating costs and, unlike in New York with the MTA, there are no dedicated taxes or fees that support the popular trans-Hudson rail connection. The money for the system comes from the rest of the Port Authority’s user fees, and as more and more projects demand PA resources, PATH is starting to drag down everything else.
Yet, PATH is an important part of the New York-New Jersey transit picture. Despite recessions, terrorist attacks and massive hurricanes, ridership has increased by nearly 50,000 passengers per day since 1994, and as Jersey City and Hoboken continue to grow, PATH remains a vital connection to the region’s job centers. So how do you solve this problem? According to a new report released tonight by the Citizens Budget Commission, one solution could involve transferring control of PATH to New Jersey Transit to better align rail operations, raising fares and instituting a series of fees and taxes that would put the railroad on a more sound fiscal path.
“All other U.S. transit systems rely on tax subsidies,” Charles Brecher, CBC’s Consulting Research Director said. “PATH is the only outlier. The burden of funding PATH should not fall only on passengers and the Port Authority. A broader region benefits from PATH and should pay a fair share.”
The report — available here as a PDF — offers up a succinct summary of the current structure and the inherent problems facing PATH. It mentions that the cost per ride of operating the train system is over $8.40, third highest among U.S. transit agencies, and it doesn’t delve into ways to cut down these costs. To me, that’s a significant red flag. But still, the budget deficit of $387 million for 2014 is projected to reach nearly half a billion dollars in four years, and that’s a problem.
So what’s the CBC solution? As the nonpartisan agency notes, PATH is the only transit system in the U.S. that receives no state or local tax subsidies (while NYC Transit, for instance, relies on those fees for 52 percent of its revenue). Tax subsidies, the report says, “is appropriate because of the benefit the general public, including employers, derives from an efficient mass transit system and the broad labor market it supports.”
Meanwhile, the Commission recommends a steep fare hike in line with their 50-25-25 funding model. The idea is that the agency should draw 50 of its revenue from fares and 25 each from taxes and motor vehicle users. The taxes could come from a small bump of around .32 percentage points to the sales tax or a steeper increase to property taxes. The fares would likely climb to a single-ride price of $4.50 and an average cost of around $3.78. I worry that this amount is too high for a mass transit option and could lead to severe sticker shock that encourages more driving. An equal-shares approach would lead to higher taxes but only a $3 single ride.
Finally, the CBC recommends removing PATH from the purview of the Port Authority and transferring operations to New Jersey Transit. Notes the report’s summery, “New Jersey Transit trains and buses already account for 60 percent of the weekday commuters from New Jersey directly to the Manhattan central business district, and adding PATH would bring the share to 87 percent. New Jersey Transit could more effectively coordinate transit operations across the state while continuing to receive a guaranteed toll cross-subsidy from the Port Authority.” (Though we could debate for hours whether New Jersey Transit successfully runs its own transit operations and can effectively coordinate anything.)
No matter the outcome, though, as the report notes, something has to give” “Whether PATH stays in PANYNJ’s portfolio or is transferred to NJT, a rethinking of the system’s financing policy is appropriate. More equitably financing PATH’s significant annual deficits would enhance its long-term fiscal sustainability. Adopting one of the recommended guidelines ensures that no one group—PATH riders, toll payers, residents, or employers—pays a disproportionate share of the cost.”
In the ongoing debate over the future of the Port Authority, Wednesday looms as a potential turning point as the PA’s board gathers to vote on the fate of a loan for 3 World Trade Center. With leasing at a near standstill in his 4 WTC (and in the PA’s 1 WTC), Larry Silverstein has once again come to the Port Authority for a multi-billion-dollar loan guarantee for an office building, and for once the Port Authority board is showing signs of fighting back. With politicians, transit advocates and Port Authority reformists watching, Wednesday’s vote could be a monumental one; it will definitely be newsworthy.
The immediate controversy at Ground Zero has come about due to Silverstein’s desire to keep building up. It’s not currently an easy one to fulfill as, according to an article in the Wall Street Journal, the other two WTC buildings — both constructed either with PA money or with PA loans — aren’t exactly filling up. “Neither One World Trade nor 4 World Trade has signed a lease with a private office tenant in nearly three years,” Eliot Brown reported. “Between them, that leaves more than 2.5 million square feet of unleased space—double the size of the Chrysler Building—at a time of contraction of the big banks that are among such buildings’ likelier prospective tenants.”
With an increased attention on the desire to refocus the Port Authority on its transportation mission, Kenneth Lipper, an investment banker on the PA board, has led the charge against another tax giveaway to Silverstein. “We can’t have these peripheral distractions,” he said, calling the construction projects “an inappropriate investment” for the Port Authority.
In a column in yesterday’s Times, Joe Nocera expanded on this concept:
Whether or not building commercial skyscrapers was the right way to rebuild Ground Zero, what can be said for sure is that the Port Authority has shown, yet again, that it doesn’t belong in the real estate business. One World Trade Center is the most expensive high-rise building ever built in America, and it is costing the Port Authority a fortune. Only 55 percent of its 2.6 million square feet has been leased, and most of that is at a significant loss. Meanwhile, 4 World Trade Center, which was developed by Silverstein, has only 60 percent of its space leased. As The Wall Street Journal pointed out recently, between the two buildings, there is more than 2.5 million square feet of unleased space at Ground Zero.
So why in the world would the Port Authority be willing to back another $1.2 billion in loans to help Silverstein build 3 World Trade Center? Yet on Wednesday, that is exactly what the Port Authority board is supposed to vote on. Silverstein needs the loan guarantee for a simple reason: The market is saying that, with all that empty office space, this is not the time to be building another skyscraper downtown…This time, somebody on the board has finally stood up and said, “Enough.” That person is Kenneth Lipper, an investment banker and a former deputy mayor of New York, who was appointed to the Port Authority board last year by Gov. Andrew Cuomo of New York.
“There is simply no reason for the Port Authority to step in,” he told me on Monday. “The private sector is appropriately saying, ‘Not now.’ ” But he also had another objection, one that heralds back to the original purpose of the Port Authority. “Our role is to develop the transportation infrastructure of this region. We have more infrastructure needs than we can finance through our revenue base. As a result, we are triaging necessary transportation improvements to finance what will be an empty building.”
How this ends is anyone’s guess. While Lipper is leading the opposition, some PA board members seem willing to hand over a blank check to Silverstein, and Sheldon Silver, for one, is putting pressure on the board to approve the funding request. Silverstein and his team believe the loan will eventually be paid back down the line when the PA can realize revenues from these new office buildings, but between Ground Zero, Hudson Yards and a potential East Side rezoning effort, it’s not yet clear that all the square footage flooding the market over the next few years will go quickly.
Meanwhile, in the aftermath of the George Washington Bridge scandal, an independent panel has urged the PA to shed its shackles of governor control. PA doings should be public and books transparent. One way to start would be, as Lipper suggests, to refocus on transit and transportation at the expense of another World Trade Center building that may not be all that necessary.
While the Port Authority’s future has been in question lately, the bi-state agency’s present has come under the microscope as well Though we’ve long known just how the Port Authority has become a victim of its two overseers and how its projects have strayed far from its core mission into the realm of political whims, a new report issued by NYU Wagner’s Rudin Center for Transportation Policy & Management underscores just how deep these problems run.
The report…says the agency spent more than $800 million from 2002 to 2012 on “regional projects” chosen by the governors’ offices. In the coming years, the pace of spending on zero-return state projects is expected to accelerate. As a result, the most powerful testaments to the agency’s peril, according to former agency officials and transportation experts, are not found amid the bridge access lanes of Fort Lee, N.J.
They can be traced to the grounds of industrial parks built in the Bronx and in Yonkers, with little obvious transportation purpose, or along the Pulaski Skyway, which the agency agreed to rehabilitate after Mr. Christie canceled the construction of a rail tunnel beneath the Hudson River in 2010 and claimed billions in planned spending to be New Jersey’s money.
The prospect of reform is particularly urgent, according to the review, given the increasing burden posed by the PATH rail system. In 2012, the system lost about $400 million, according to data compiled by the authors, more than twice its loss in 2000.
The report estimated that between 2002 and 2020, the agency will have put more than $4.6 billion into the PATH system, and that excludes more than $1 billion in spending on a new PATH station at the World Trade Center. “It is no longer possible for the Port Authority to adequately fund its own facilities and services while simultaneously allocating hundreds of millions for non-revenue-generating state projects,” wrote the report’s authors, Mitchell Moss, the Rudin Center’s director, and Hugh O’Neill, a former assistant executive director at the Port Authority.
The report essentially follows these threads of argument deeper. The zero-return issue is a big problem, and one that strong leaders will have to tackle by defying the governors who appoint them. I doubt we’ll see too much movement in that regard any time soon.
But let’s look at the PATH problem. The PATH system should be one of the Port Authority’s bigger focuses. Unless PATH is somehow integrated into the MTA — a politically challenging move to say the least — it remains an important part of the Port Authority portfolio, but unlike the MTA, PATH is funded only through tolls and other PA revenue. As the report notes, “PATH is today the only major rail transit system in the U.S. that is funded entirely through a combination of farebox revenues and subsidies from other transportation facilities, without any support from broader-based tax revenues.”
That’s all well and good for PATH, but the taxes that fund the MTA, for instance, a key revenue driver. Without them, fares would be impossibly high or service highly inadequate. As Moss and O’Neill note, that could be PATH’s fate: “Without some broader base of support, the next decade is likely to see continued escalation of bridge and tunnel tolls and PATH fares, increased pressure to cannibalize revenues from other Port Authority businesses to further subsidize PATH, sharp reductions in service – or some combination of all three.”
Instead of bolstering what the report calls reliable, low-cost, trans-Hudson rail service that has fed Jersey City’s rebirth and Lower Manhattan’s recovery, the Port Authority has become mired in zero-return investments that New York and New Jersey Governors have pushed. It’s an unsustainable business model for the PA and one that has ramifications that extend well beyond the Port Authority’s little fiefdoms. Somehow it needs to change, but I’m not optimistic it will.
While I was out of town last week, Port Authority David Samson finally took one for the team as he resigned amidst the prolonged fallout over the Fort Lee traffic scandal. While driving across those very same lanes on Sunday night, I laughed about how those few miles of road leading to the George Washington Bridge could create such shockwaves both in New Jersey and on a national scale for politicians with ambitious that, at one point, extended well beyond Trenton.
The national politics are neither here nor there right now. Samson left without saying much more than two sentences: “Over the past months, I have shared with the governor my desire to conclude my service to the PANYNJ. The timing is now right, and I am confident that the governor will put new leadership in place to address the many challenges ahead.” Now, calls for reform are on the table, but will two governors who haven’t expressed much of a willingness to take on transit causes look to improve the Port Authority or simply aim to re-entrench their patrons in positions long known for patronage?
In the aftermath of Samson’s resignation, the Garden State’s governor said he is open to change. “I don’t think there’s any question that structural changes are a possibility,” Cuomo said. “It’s also very complex, because the entire legal and financing mechanism that exists has an asset base that is now a bistate asset base. So it’s much easier said than done.”
On the New York side, Gov. Andrew Cuomo has tried to circumvent the issue by directing state funds toward projects that were ostensibly under the Port Authority purview. Fed up with the pace of work at JFK and Laguardia, Cuomo has tried to reinsert the state in the planning picture. That’s a recipe for short-term progress but not for a long-term structural overhaul.
So where does the PA go from here? It won’t be easy to untangle a 93-year-old governing body that commands the area’s airports, a subway system, one of the largest development sites in the city and various bridges, but it may be worth a try. Here’s WNYC’s Kate Hinds toying with the idea:
At his press conference Friday, Gov. Christie said competing state politics lay at the heart of recent problems with the Port Authority of New York and New Jersey. Citing “a history of conflict between these folks at the Port Authority,” Christie said that the way to resolve the feud between the states was “taking the Hatfields and McCoys and moving them to separate homes. Because they haven’t been able to get along with each other, despite my best efforts, the best efforts of Governor Cuomo, and many of our predecessors.”
What he meant was converting the Port Authority from a bi-state operation into separate state agencies. Until today, Christie has blocked reform at the Port, while staffing it with political appointees who had no transportation experience. But what if he got his way and the authority were to be broken up?
The first task would be to untangle multiple bi-state facilities. The Port Authority oversees the region’s airports and interstate bridges and tunnels, not to mention the PATH trains, World Trade Center redevelopment, and… the ports. Its annual operating budget is $8.2 billion — and it has a ten-year, $27.6 billion capital plan. Transportation experts told TN that unwinding those co-owned assets would be a daunting task that probably should not be undertaken.
As Hinds — along with various regional transit and transportation experts — notes, breaking up the Port Authority is throwing out the baby along with the bathwater. Pointing to various other metropolitan regions with competing authorities, most experts seem to believe the blame lies not in the structure but at the top. “Breaking it up isn’t going to solve the problem,” City College professor Robert Paaswell said. “Managing it better will solve the problem.”
Can this agency be better managed? Can we get to a point where a tit-for-tat doesn’t involve a $1 billion investment at Ground Zero in exchange for a $1 billion PATH airport extension? Can two states with divergent political whims work together competently to improve the region’s transportation infrastructure? The answer has to be yes for the region to grow and Port Authority to succeed, but the current leadership hasn’t inspired much hope yet.