OP-ED: Brother, can you spare $10 billion for a new NYC 42nd Street bus terminal?

Finding the funding to pay for the proposed $10 billion Port Authority of New York and New Jersey (Port Authority) Midtown Manhattan Bus Terminal is easier said than done. Port Authority officials last week refused to confirm the price tag which has grown from $7 billion to $10 billion over recent years.  

The approved Port Authority 2017- 2026, 10-year $32 billion Capital Plan provided only $3.5 billion toward construction of the new $10 billion 42nd Street PA Bus Terminal. The $70 million planning study started in 2019 was just the first down payment. It has assisted in laying the ground work for compliance with the federal NEPA environmental review process. The Port Authority must now seek and be granted admission by the Federal Transit Administration (FTA) to enter the New Starts or Core Capacity programs. After being admitted into the program, there are many other transit agencies around the nation who are also seeking FTA funding under these programs. No one can predict the final cost and completion date for the new bus terminal.

The FTA would make a determination as to how detailed the document would be. It would probably be a full blown Environmental Impact Statement. The NEPA process could easily take one to two years before FTA issues an environmental finding. The next step would be to advance final design and engineering beyond 30 percent. It may require several more years to complete final design and engineering. Is there still the need for any private property easement rights? There is also the need to complete New York City Urban Land Use Review Process, which takes many months.  

The Port Authority is counting on the sale of air rights as a source for several billion dollars to help defray construction costs. There is a glut of surplus office space in Hudson Yards and other Manhattan commercial districts. New York Gov. Andrew Cuomo is counting on the same private sector investments to help raise billions to offset costs of his $16 billion Penn Station South project. This competing project on the Manhattan west side is only 10 blocks south.

In the COVID-19 world, the Port Authority will have to reevaluate anticipated future ridership growth projections. Post COVID-19, many former commuters will continue working from home. It will be many years before ridership comes close to pre-COVID-19 numbers. The Port Authority anticipated significant ridership growth for utilization of the new facility may be overly optimistic.

If the air rights sale generates less than anticipated revenue, the shortfall will have to be made up by the Port Authority via taxpayers and riders. Will this add to the Port Authority's long-term deficit and ongoing financial crises? There is also the need for agreements with NYC and various owners of underground utilities including water, sewer, gas, electric, steam and cable before being ready to commence construction. Successful completion of these agreements can take several years. Who will pay for additional critical NYC municipal services such as fire, police and sanitation? NYC faces its own financial crises and growing long-term debt. Why would City Hall honor a request from the Port Authority to exempt developers from municipal taxes by issuing Payments In Liu Of Taxes (PILOTS) that would defray these costs?

Glowing promises of electric buses using the new facility left out some critical information. The estimated cost of an electric bus can range from $1 to $1.4 million per vehicle or $200,000 or more above the price of a standard clean diesel bus. The price depends on if it is a standard 40 foot, articulated or over the road coach model. The Port Authority doesn't acknowledge these costs in the overall project budget. Each operator would also have to modify their own respective bus garages to install plug in electric and other features to accommodate electric buses. This could cost millions for each garage. None of these costs were included in the most recent $10 billion overall project cost estimate. Who is going to come up with $1 to $2 billion more for these two additional tasks? How much will the Port Authority contribute to New Jersey Transit and various private bus operators to pay for electric buses and facility conversions? Buses have a useful life of between 12 and 15 years. It would take all bus operators 15 to 20 years before they could convert 100 percent of their fleets assigned to Port Authority Bus Terminal routes to be all electric.

It is wishful thinking that the Port Authority can count on $6.5 billion in future federal funding to make up the difference. Don't be surprised to wait until the next Port Authority's 10-year Capital Plan before a complete $10 billion or more funding package is in place. This is necessary to support awarding construction contracts.

The Port Authority, NJ Transit, NY Metropolitan Transportation Authority, NYC Department of Transportation and other Metro NY area transportation agencies are counting on the U.S. Department of Transportation Federal Transit Administration to help provide billions toward the $29 billion Hudson River Gateway Tunnel to New York Penn Station, $16 billion Penn Station South, $10 billion NJ to NY Cross Harbor Freight Tunnel (in this case, the Federal Highway Administration), $6.9 billion Phase Two Manhattan Second Avenue Subway, $2.7 billion Brooklyn Queens Street Car Connector, $1.4 billion West Shore and $600 million North Shore Bus Staten Island Rapid Transit projects. There is not enough space here to list all the others.

When it comes to paying for all his transportation promises, Port Authority Chairman Rick Cotton reminds me of J. Wellington Wimpy who famously said “I’ll gladly pay you Tuesday for a hamburger today.” Tuesday may never come for taxpayers and commuters who continue to deal with higher fares, tolls, taxes, more debt and borrowing in coming years to cover the costs for all of his transportation improvements. 

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Larry Penner is a transportation advocate, historian and writer who previously worked for the Federal Transit Administration Region 2 New York Office. This included the development, review, approval and oversight for billions in capital projects and programs for the MTA, NYC Transit, Long Island Rail Road, Metro-North Railroad, MTA Bus, NYC DOT, NJ Transit, along with 30 other transit agencies in New York and New Jersey.