As a lifelong New Yorker, I know how resilient the metropolitan region is. While New York’s obituary has been written many times over, we all know – in fact, the entire world knows – that you can never count New York out.
But today we are facing an enormous challenge, unlike anything we’ve seen in a century. The New York metropolitan region has taken the brunt of the impact of the coronavirus. The loss in terms of human lives is incalculable. And the economic impact is still unfolding.
Now, as we turn the corner in our battle against the virus, we are beginning to focus on rebuilding our regional economy. The key to moving forward will be the way that government and the private sector work together to prove that this city can once again be a healthy and safe place to live, work, invest and entertain. And, a well-functioning and safe mass transit system will be critical.
I would also like to remind Congress that the Port Authority represents a region of 20 million people that accounts for 15 percent of the nation’s GDP. That is why I strongly support the Port Authority’s request for direct federal funding to offset revenue losses that are unprecedented in the agency’s 99-year history. Revenue from our airports alone has dropped by 97 percent, and bridge and tunnel traffic is down 50 percent.
Current estimates show the Port Authority will have a reduction in revenue of approximately $3 billion due to the COVID-19 crisis over the next 24 months. Revenue is the lifeblood of the Port Authority, which differs from other government entities in that it takes no taxpayer dollars and is completely self-sustaining based on revenues from business partners, fees and fares.
As a result of this projected $3 billion revenue loss, the Port Authority will be forced to reconsider its capital plan — including drastic cuts to a variety of critical infrastructure projects. These projects, as currently planned, include public-private partnerships that would leverage more than $10 billion in committed private capital, while creating more than 100,000 direct and indirect jobs.
As Congress considers aiding states and other local governmental units, it should assist financially independent, multi-state entities like the Port Authority that provide critical services that would otherwise fall to states.
The Port Authority of New York and New Jersey is perfectly suited to bring together the resources of the public and private sector to achieve our goal of restoring the region’s economy. During my career, both in government and in the private sector, I have not encountered another public agency that has used public sector funding to so effectively leverage private investment in projects that have reenergized the region’s economy.
Just as an example, the Port Authority’s capital project to transform JFK Airport into a modern, international gateway uses roughly $1 billion in Port Authority funds to leverage an additional $12 billion in private investment. The ongoing project to build a new LaGuardia Airport also leverages two-thirds of the $8 billion cost from private investment.
The Port Authority has proven itself before. After the September 11 terror attacks, the federal government delivered critical funding to rebuild Lower Manhattan. The Port Authority was a lead partner in that effort, harnessing private and public sector resources to rebuild the World Trade Center, restore PATH commuter train service and create a new train hall. Lower Manhattan was rebuilt better than before with new office towers, housing, retail and parks.
When you combine both public and private investment, the Port Authority capital plan would drive $20 billion of capital spending in the next five years. That spending will provide much needed stimulus to our economy. It will put men and women back to work, allow those workers to invest in their families and to buy homes, and will leave behind a legacy of infrastructure that will foster growth. We cannot afford to walk away from this opportunity at this critical juncture.
If Congress wants to rebuild our economy, create jobs and lay the foundation for economic growth, it should include a specific allocation for the Port Authority equal to its revenue loss. An investment in the Port Authority is an investment in more than just our region – it’s an investment in our national economy.
James Whelan is President of the Real Estate Board of New York.