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Thread: City, PA Agree on Airport Leases

  1. #1

    Default City, PA Agree on Airport Leases

    City, PA Agree on Airport Leases

    By Dan Janison
    Staff Writer

    October 15, 2003, 9:29 AM EDT

    The city and the Port Authority have reached terms on lease payments for the Queens airports, Gov. George Pataki and Mayor Michael Bloomberg announced this morning at LaGuardia's Marine Air Terminal.

    The $700 million package includes a $500 million lump sum payment and a $90 million increase over the current annual payments of $3.5 million that the Port Authority pays to operate the facilities on city land.

    The lease payments had been disputed for a decade. Former Mayor Rudolph Giuliani had walked away from the negotiations and attempted to bring in another operator for the airports, but that effort failed.

    In prepared remarks, Bloomberg was expected to say that he "was fulfilling his pledge to establish a revitalized relationship with the Port Authority and settle the back lease claims."

    Authorities have also agreed on the establishment on an airport board to review standards, operations and performance at LaGuardia and JFK.

    It was also announced that the Port Authority will increase its future payments in lieu of taxes for the World Trade Center site, but those details were still vague.

    Officials are expecting a $55 million a year payment after the World Trade Center site is rebuilt.


    Copyright Newsday, Inc.


    Press Release

  2. #2

    Default

    October 16, 2003

    New York City to Extend Lease on Airports

    By MICHAEL COOPER

    Ending a feud that has lasted nearly a decade, Mayor Michael R. Bloomberg announced yesterday that New York City would extend its lease of La Guardia and Kennedy Airports to the Port Authority of New York and New Jersey until 2050 in exchange for a $700 million upfront payment and a steep increase in annual rents.

    The agreement formally ended talks of a so-called land swap in which the city was to have traded the land under the two airports, which it owns, to the Port Authority in exchange for the World Trade Center site, which the authority owns. The city had proposed the trade to win more control over the rebuilding of the site.

    The deal would erase what many fiscal monitors warned was a large risk to the city's financial health, by ensuring that the city would get the hundreds of millions of dollars in extra lease payments that it has been counting on to balance its budgets this year and next.

    Gov. George E. Pataki, who has been at odds with city officials over aid to the city, helped broker the deal, which is a way to get the city money without costing the state.

    For years, the city and the Port Authority have argued over how much the city should get in rent for the airports. Under the current agreement, which was set to expire in 2015, the city has received as little as $3.5 million a year.

    The new deal would raise the rent to $93.5 million a year, or 8 percent of gross revenues, whichever was greater, to ensure that the deal remained fair over the next half-century.

    In exchange, the Port Authority would get to extend its lease until 2050, allowing it to issue long-term debt for capital projects and to attract private investment to the airport, especially by airlines and companies seeking to build terminals.

    The deal is subject to approval by the Port Authority's board of commissioners, half of whom are appointed by Gov. James E. McGreevey of New Jersey. New Jersey officials said they would review the plan in coming weeks, and one official there expressed concerns about some aspects of the agreement.

    The deal also dictates the amount of money the city would get each year from the Port Authority for the World Trade Center site instead of property taxes. Because the site is owned by a public authority, the city cannot collect property taxes; instead, it negotiates annual payments in their place. Under the terms of the deal, those payments would begin at $14 million a year and grow to $55 million annually when the site is fully developed.

    That is more than the city used to get in 2001 the city collected about $30 million in such payments, officials said but less than the city would stand to collect if the site were privately held. City officials have estimated in the past that the site could generate as much as $100 million a year in property taxes if it were owned privately.

    The announcement which was made by Mayor Bloomberg, Governor Pataki and other city and Port Authority officials in the Art Deco-style Marine Air Terminal at La Guardia Airport appeared to end years of bitter debates, public wrangling and legal battles.

    The administration of former Mayor Rudolph W. Giuliani fought for years to renegotiate the lease, trying to take control of the airports from the Port Authority and complaining that the authority used revenues from the airports to subsidize projects in New Jersey. At one point, Mr. Giuliani called Kennedy and La Guardia "two of the worst airports in America."

    Mayor Bloomberg called yesterday's agreement a sign that the relationship between the city and the Port Authority was mending.

    "In the past, the relationships between the city and the Port Authority have been strained," he said. "But I think the tragedy of 9/11 really brought us together and provided the opportunity for a fresh start, good for all New Yorkers and the people from New Jersey as well."

    Deputy Mayor Daniel L. Doctoroff, who had been a proponent of the land swap idea, said yesterday that the city felt much more comfortable with its level of say in the redevelopment plans, and that it no longer felt the need to win control of the site. He said that discussions over the swap "to some extent led to this deal."

    Under the deal, the city would also get $50 million in Port Authority money for capital improvements in Queens, seats on a newly created Airport Board that will oversee the operations of the airport and the right to audit the airports.

    The Port Authority also agreed to spend $90 million to study the feasibility of rail links between Lower Manhattan and both Kennedy and Newark Liberty International Airports, and to commit up to $500 million for the construction of each project if they are deemed feasible.

    Michael R. DeCotiis, the chief counsel to Governor McGreevey, said that New Jersey officials would review the details of the plan for the next few weeks.

    One New Jersey official expressed "serious reservations" about the money that would be spent studying and then building the rail links, especially the link to Kennedy.

    The official questioned why New Jersey would want to subsidize a train link from Lower Manhattan to Queens. "We're not sure that's the wisest use of those funds," the official said, speaking on the condition of anonymity.

    Still, New York and Port Authority officials appeared confident that the deal would be approved.

    Governor Pataki offered in January to get the city $500 million in back rent for the airports, but city officials responded coolly to the proposal, saying that they believed the city was owed more money.

    After that, the governor proposed a state budget that would have hurt, not helped, the city, leading the city to broker a deal with the State Legislature, which passed an alternate budget over the governor's veto. The governor continues to object to part of the legislature's deal, which would save the city $500 million a year by having the state take over the city's remaining debt from the 1970's. He sued to block that deal.

    "There are going to be occasional differences, but it doesn't change the fact that the mayor and I are both committed to having as close a working relationship, where we work to solve mutually the problems of the city and the state every day," Mr. Pataki said.

    The airport deal was widely praised by city and state officials.

    State Comptroller Alan G. Hevesi, a Democrat, congratulated the governor and the mayor, both Republicans, for reaching a deal that he called "good for the city, good for the airports, and therefore good for the entire state."

    The Pataki administration said the deal would net the city "a minimum of $5 billion" through 2050. The city would collect the $700 million payment as soon as the deal is finalized.

    That $700 million would not do much to help the city close an expected $2 billion budget gap next year, but it would make sure that the gap did not widen.

    The budget the city passed in June counts on receiving $200 million in extra lease payments this year, and $583 million in such payments next year, for a total of $783 million by next year. The deal would provide a bit more than the city was counting on.

    For years, city administrations have been counting on extra money from the airport leases in their budgets, and not getting it.

    Budget monitors said that the deal would vastly improve the city's fiscal outlook, by removing what they saw as a risk.

    "This eliminates one of the big risks that we saw," the city comptroller, William C. Thompson Jr., said.


    Copyright 2003 The New York Times Company

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    New Jersey's part of the deal..


    P.A. deal tops $50M for Newark

    NYC extends its airport leases, and city's parity clause kicks in

    Thursday, October 16, 2003

    BY RON MARSICO AND JEFFERY C. MAYS
    Star-Ledger Staff

    The city of Newark will reap a windfall of more than $50 million on its Newark Liberty International Airport lease as a result of yesterday's tentative deal that extends the Port Authority's leases on New York's two major airports, officials said.

    After years of negotiations, the city of New York and the Port Authority of New York and New Jersey agreed to extend the leases on John F. Kennedy and LaGuardia airports until 2050, Mayor Michael Bloomberg and Gov. George Pataki announced. The deal gives the city $700 million up front and increases the annual lease payment for the airports from $3.5 million to $93.5 million.

    Newark last year renegotiated its own deal with the Port Authority, extending the lease on Newark Liberty through 2065 in return for a rent increase and an up-front payment of $265 million. A parity clause in that lease means it will be adjusted to keep pace with New York's deal.

    "This is going to require us to take a new look at certain aspects of the Newark lease to ensure there is complete parity between Newark and the New York airports," said Anthony Coscia, the Port Authority chairman.

    The New York deal still must be approved by the bistate agency's board, and it could take months to calculate the figure due to Newark, based on factors including the gross revenues of the three airports.

    Newark Mayor Sharpe James said yesterday he believes his city could receive an additional $50 million to $150 million in cash payments, along with an increase in the $65 million annual rent payments it receives for Newark Airport.

    "New York gets $700 million, we got $265 million," said James. "Somewhere, to make it equitable, Newark should receive another cash payment of $50 million to a high of $150 million. We believe they will have to increase our rental money."

    McGreevey administration officials said privately that Newark can expect a one-time payment exceeding $50 million, but most likely less than $100 million. It also can expect the $65 million per year it receives from the Port Authority for the airport lease to go up by $2 million to $3 million, the officials said.

    Earlier this year, then-Port Authority Chairman Jack Sinagra predicted Newark's windfall could exceed $200 million, but administration officials said that estimate was too high.

    Newark Business Administrator Richard Monteilh said that once the city's consultants examine New York's deal, he is confident that Newark will be fairly compensated. "We know it will result in a significant amount of money for Newark," Monteilh said.

    But Newark Councilwoman Gayle Chaneyfield Jenkins, who voted last year to approve the lease, said she was worried that Newark might not get its fair share.

    "They said we would receive parity, not a percentage," said Chaneyfield Jenkins. "If New York gets a dollar, we got a dollar. How come we don't get a better deal? ... This is a blatant disrespect of the citizens of Newark."

    During negotiations on the lease last year, consultants for both the mayor and city council called the parity clause "incomplete, confusing and ineffective."

    But Coscia insisted that Newark's interests will be protected.

    "I want to be crystal clear that Newark is treated fairly before I or other New Jersey commissioners agree to it," said Coscia.

    Of the original $265 million up-front money for Newark, $63 million went to close last year's budget gap, and $37 million was used this year for property tax relief. The remaining $165 million was supposed to help finance a new sports arena in downtown Newark, but that project now appears dead, and how those funds are eventually used is in limbo.

    James say the new windfall would go to property tax relief and neighborhood projects.

    Additionally, Newark still has an outstanding lawsuit pending against the Port Authority regarding past airport rent payments.

    The tentative agreement between the Port Authority and New York also officially shelves a land swap proposal that would have had the city give up its two airports in exchange for the former World Trade Center site, which the Port Authority owns.

    2005 The Star-Ledger. Used by NJ.com with permission.

  4. #4

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    September 14, 2006
    Queens: Airport Neighborhood Projects
    By SEWELL CHAN

    Mayor Michael R. Bloomberg joined Kenneth J. Ringler Jr., the executive director of the Port Authority of New York and New Jersey, and other city officials yesterday to announce an agreement on $39.5 million worth of projects to improve La Guardia and Kennedy Airports and help the neighborhoods around them. The money is part of $100 million that the Port Authority agreed to spend in 2004 when it renegotiated its lease of the two airports. It will pay for landscaping, street improvements, traffic studies and upgrades to the AirTrain at Kennedy.

    Copyright 2006 The New York Times Company

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