The Port Authority of New York and New Jersey’s new executive director said he’s been thinking about the “peace dividend” he expects once 1 World Trade Center is completed in 2013 – when the authority will be able to turn its energies toward completing “tens of billions” in overdue transportation infrastructure overhauls.
Pat Foye spoke in a keynote speech for a conference about globalization and the New York state economy at the SUNY Levin Institute, which is named after Neil Levin, the former Port Authority chief executive who died at the World Trade Center on September 11.
Foye agreed to sit down for a Q & A after speaking at the conference. Some of the answers in this interview have been condensed.
Could you elaborate on what you called the “World Trade Center peace dividend?”
1 World Trade Center is 50 percent leased, which is terrific. The building is on track to be finished at the end of 2013. It’ll be open to tenants in the first quarter of 2014. The Port Authority has commitments it made to the World Trade Center site and to Downtown Manhattan in general. Once those commitments have been met, the Port Authority will be able to take funds and increasingly focus them on airports and ports and the PATH train and bridges and tunnels—the George Washington Bridge, Lincoln Tunnel, the Staten Island bridges—all the incredibly important infrastructure that help drive the economy of the region.
We’ll be refocusing on the Port Authority’s core mission, which is critical transportation infrastructure that serves both states. That’s what the future looks like.
Your predecessor, Chris Ward, said the recent toll and fare hikes were not enough to do what the Port Authority needs to do while finishing the World Trade Center. Are you facing hard choices about delaying or canceling critical infrastructure projects?
Life’s about hard choices, whether you’re sitting at your kitchen table with your spouse or whether you’re in business or a big governmental entity like the MTA or the Port Authority.
I’m probably the wrong guy to ask because I’m an MTA board member and, a year ago, I voted against the MTA fare increase because I thought voting against it was the right thing to do.
But I think that the toll increase was the right thing to do for the Port Authority at the time. I personally would not be advocating—and I’m not advocating—for higher toll levels now. I think that given the economy, that would not be an appropriate thing to do. And I know it’s not something that either Governor Christie or Governor Cuomo would support. It’s something the Board of Commissioners would not support.
So I think the toll and fare increase, which was a painful decision made in August, was at the right level.
How would you streamline the environmental review process for large building projects? Would you have less reviews, tighter deadlines?
Look, everybody is committed to environmental protection. I’ve got three daughters. I care a lot about the water I drink, my wife drinks, my neighbors drink. I feel the same way about the air we breathe and chemicals in the soil. That’s a given.
The question is, with unmet transportation needs in the hundreds of billions and unemployment as high as it is, isn’t there a way to shorten the process without compromising the environment?
I believe there is. I think President Obama, a president with a terrific environmental record, led the way on the Tappan Zee Bridge when he gave Governor Cuomo a waiver of the NEPA process. It’s one of only 14 projects in the country to get that waiver.
[NOTE: The Tappan Zee Bridge connects New York’s Rockland and Westchester Counties, accommodates 135,000 vehicles each weekday and is in constant need of repairs. An expedited federal review is supposed to speed construction of a replacement bridge by coordinating the permitting process.]
How does the state’s new infrastructure bank work and how will it affect the Port Authority?
The state and region’s transportation infrastructure needs can be measured in hundreds of billions of dollars. State and government budgets everywhere are under pressure. Taxpayers have reached the limit of their ability to give more.
The infrastructure bank is designed to come up with menu of projects: the Tappan Zee Bridge, perhaps the Central Terminal Building at LaGuardia Airport, which is a Port Authority asset, perhaps the MTA’s East Side Access and Second Avenue Subway projects.
The bank would then combine the state and Port Authority together with sources of private capital: public unions, private pension plans, corporate pension plans, institutional investors. The state would not pay a fee but would co-invest, if you will.
Why is it needed?
We have an economic crisis. And I think people have generally have lost some confidence in the ability of Washington to address these concerns. We need to do something and we need to do it now.
The state has the projects and the expertise but doesn’t have the ability to borrow at those levels.
The governor has been very public about the importance of fixing the Tappan Zee Bridge, which is an incredibly important asset for the entire region. The state infrastructure fund will be looking at the Tappan Zee as among the first projects that it considers.
Is it like bonds in that investors can expect a set rate of return?
The infrastructure fund will afford investors the opportunity to invest in debt, perhaps subordinated debt, preferred equity, common equity or a common equity equivalent.
Every project is different. It’s got its own history, its own needs from a financing point of view. One of the advantages of the Tappan Zee Bridge, for instance, is it has a whole history of toll collection, and that can be plotted. That gives comfort and assurance to investors.
Projects with toll or fare revenue, that will help the financing get done.