Owner of the Year

Like a Phoenix, PANYNJ Awakens into Major Builder

Port Authority of New York and New Jersey has emerged from a long slumber with a renewed commitment to being a building force in the region

by Jack Buehrer

Officials at the Port Authority of New York and New Jersey are calling it the agency’s “second act.”

Some construction industry experts say it’s a “resurgence.”

Others call it the right set of circumstances at the right time.

It’s hard to get a consensus on what to call the Port Authority’s largest roster of construction projects in a half-century, but few dispute the validity or the importance of the agency’s return to its roots as one of the region’s major builders.

With an aggressive 10-year, $26 billion capital program laid out on the table, the agency has its sights set on rebuilding or expanding many of the regions railways, tunnels and bridges, as well as increasing capacity at the three major airports. In addition, the agency is leading controversially at times the redevelopment of Lower Manhattan in New York City, particularly the World Trade Center.

“There are many dimensions to the Port Authority’s resurgence and commitment to the region’s infrastructure,” says Dick Anderson, president of the New York Building Congress, an influential construction industry association in New York City. “There is the capital program, there is strong leadership and, I think, they’ve become forthright in explaining and addressing the key transportation and infrastructure challenges in the region.

“It’s no coincidence that now things are starting to get done.”

A CHANGE IN LEADERSHIP

Created in 1921, the Port Authority enjoyed considerable success over its first two decades, which saw the construction of the George Washington, Bayonne and Goethals bridges; the Lincoln Tunnel; and the Port Authority Commerce Hall, which at that time was one of the three largest buildings in the world.

“I think about that [era] and I have to ask myself what we’ve built in the last 20 years,” Port Authority Executive Director Anthony E. Shorris said at a Building Congress event in June. “My answer tells me that we haven’t lived up to that part of our legacy.”

Agency officials declined to participate in this story.

advertisement

But starting in 2003, with the election of Anthony R. Coscia as its new chairman, the agency began making decided efforts to repair its image as a lumbering bureaucracy with little or no oversight and a reputation for poor leadership that often consisted of out-of-work politicians and sometimes their friends and relatives.

“It never really got to a crisis point over there, but it was slipping,” Anderson says of the Port Authority’s troubles. “But then they bring in Coscia and Shorris, they bring over [Deputy Executive Director and construction industry veteran] William Goldstein, and that tells you the story right there. They’re surrounding themselves with good people, and things are starting to move.”

But before bringing on Shorris, who served as the Port Authority’s first deputy director in the 1990s and came back to the agency after stints with the New York City Board of Education and the Policy Research Institute for the Region, the agency rolled out it’s 10-year capital program which featured an array of projects more ambitious than any it had taken on since its early days.

Included in the plan was $2 billion since increased to $3 billion in financing for the building of the first rail tunnel under the Hudson River in nearly a century (the $7.5 billion Access to the Region’s Core partnership with NJ Transit), as well as major improvements to the aging PATH System and Kennedy International Airport in Queens, a new Goethals Bridge and the rebuilding of the World Trade Center.

In addition, there are plans for a $75 million expansion of Stewart International Airport in New Windsor, N.Y., which the Port Authority recently purchased for $45 million, to alleviate congestion at the region’s other major airports.

And last summer the agency announced $2 billion in additional infrastructure improvements to accommodate increased cargo traffic at its seaports. Those plans include improvements to off-port roads and rail lines to improve the flow of cargo, which is expected to double in the next decade.

“There’s been a definite change in philosophy at the agency and it started with the change in leadership,” says Ron Berger, executive director of the Subcontractors Trade Association in New York City. “The present leaders there are the driving force behind restoring the Port Authority to what they were 30 years ago.”

WHY NOW?

For years, the Port Authority was seen by the construction industry as a place where good ideas went to die. Whether because of political gridlock between the authority and the administrations in Albany and Trenton which split responsibility for the agency or simply due to under-qualified political appointees holding leadership positions, the 1980s and 1990s were particularly lean years for the Port Authority in terms of its building agenda.

“The Port Authority for a long time was used as a dumping ground for political patronage,” says Lou Colletti, president of New York’s Building Trades Employers’ Association. “What we’re seeing now is the two current governors are allowing the Port Authority hire the right people and carry out the agenda. That didn’t used to happen.”

Things started to thaw a bit after the attacks of 9/11, then, a year later Michael Bloomberg was elected Mayor of New York City, replacing Rudy Giuliani, who was a vocal critic of the authority, even calling for its dissolution. Giuliani, along with former governors George Pataki of New York and Christine Todd Whitman of New Jersey overlooked and often undermined the Port Authority. By January 2007, Gov. Jon Corzine of New Jersey and Gov. Eliot Spitzer of New York were in office, which opened the often-locked door dividing the agency and the administrations that oversaw it.

“For a long time there never seemed to be the right two people with Pataki and Whitman and others,” says Anderson. “It really starts with the two governors who agreed on Shorris as executive director. It all went from there. And Bloomberg wants the Port Authority to be as effective as possible. In the past governors were installing their own appointees (in the agency). When you have an agency run that way, you’re going to start having problems.”

Others attribute the Port Authority’s recent momentum to a shift in thinking about how projects should get done.

“There’s a cyclical nature in terms of people thinking government is inefficient and can’t get big projects done,” says Chris Ward, managing director of the General Contractors Association of New York, and chief of strategic planning and external affairs for the Port Authority from 1997-2002. “But after 9/11, people began to realize that this agency can be a large construction solver. [The Port Authority’s] ability to run large projects has risen immeasurably since then.”

MONITORING PUBLIC PERCEPTION

Despite all the enthusiasm for the re-emergence of the Port Authority among many in the construction industry, the agency has been forced to play damage control during the early part of this year as it has been unable to sidestep the controversy that often comes with a heightened public profile.

Without the power to tax, the agency funds much of its capital projects through tolls and fares, as well as ballot issue and leases. At the end of 2007, the Port Authority announced plans to hike its bridge and tunnel tolls by as much as one-third in the next year a plan that drew criticism early on. But thanks to support from Gov. Corzine in New Jersey, and a strong effort to explain the plan to the public, the program has slowly gained support.

“I think the Port Authority is setting a clear agenda to the public,” Ward says. “They did a good job of managing their toll and fare increase by convincing the public that it is critical to improving infrastructure. I don’t think that that’s something they would have been able to do ten or 15 years ago. They’ve righted the ship for large scale projects.”

By far the largest project on the Port Authority’s plate, the rebuilding of the World Trade Center has also drawn more criticism than any project the agency has taken on during the last few years.

At press time, the agency was still paying as much as $300,000 per day to developer Silverstein Properties, for failing to excavate the site by its self-imposed deadline which expired early this year. Officials conceded there were several significant problems on the site, including the surprising discovery of nearly twice the amount of bedrock in the site’s foundations.

“I think too many people underestimate the complexity of that challenge down there,” Colletti says. “First of all, before shovels are in the ground, and before logistics, just developing a plan for that site took an enormous amount of time up front.”

Pat Di Filippo, executive vice president for Turner Construction, which is currently working on two Port Authority projects including helming construction at the new Jet Blue terminal at JFK says the World Trade Center is too unique a project to use as a barometer for an owner’s success.

“That’s an unfair project to be judged for,” he says. “They get unfairly pegged with criticism for their work on a site that literally is a one-of-a-kind instance in the history of the world. Who else would you want running that job?”

DEFINING ITS LEGACY

With so many major projects in the ground or in the pipeline, the next 20 years is being looked at by many as not only critical for the agency, but for the entire region.

“The stakes are so high right now,” says Anderson. “This area is at the top of its game economically, demographically, socially … What the Port Authority is responsible for right now are key things that are going to allow the area to keep thriving. They’re more important now than they’ve ever been.”