PWF Blog

PWF Blog (11/5/14)

Cuomo and LaGuardia’s Central Terminal P3:
The Risk of Politics

His sights set on the 2016 presidential race, New York Gov. Andrew Cuomo announced at a press conference on Oct. 21 that the Port Authority would hold a 60-day design competition by year end and pay the winners $500,000 to redesign New York City’s entire airport system.

Cuomo’s grand vision for New York’s infrastructure won him accolades from Vice President Joe Biden, who shared the podium. But the Governor’s surprise announcement at a press conference sent shivers through the international P3 industry.

To secure his full authorship of the airport plan, sources say Cuomo had decided to cancel the Port Authority’s fully ripened procurement to replace the Central Terminal Building at LaGuardia airport. The Port Authority was scheduled to announce its preferred bidder for the $3.6-billion project at its Board meeting, also on Oct. 21.

At great cost, three international teams have spent almost three years preparing their bids for the highly complex job of replacing the Central Terminal. The Port Authority has painstakingly crafted a contract and negotiated a framework agreement with the airlines to carefully define their role in financing the project. All of that looked like it could crash.

Biden, who had not been told of Cuomo’s intentions before the press conference, noted in his speech the similarity between Cuomo and Abraham Lincoln, who spawned a burst of investment in the Midwest by privatizing the railroads. Later however, in private, the Vice President convinced Cuomo not to cancel the Port Authority’s LaGuardia procurement.

“What’s going on with Cuomo is the big question now,” says a banker involved in financing the project.

Cuomo apparently wants a national stage, says one of the bidders, and his signature infrastructure project, the Tappan Zee Bridge replacement, isn’t the only big bridge under construction in the U.S. Should Cuomo still go ahead and cancel the LaGuardia terminal and pursue a grander plan, however, it would be years before any significant project could break ground. And that presumes Cuomo could get White House help in funding it.

Letting the Port Authority complete its procurement and hire a private development team to replace the 50-year-old central terminal at LaGuardia would be a nationally significant event. Hopefully, that’s a big enough stage for Cuomo.

by William G. Reinhardt, editor

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