Big Spender: Gov. Cuomo Pledges $100 Billion in New Construction

Big Spender: Gov. Cuomo Pledges $100 Billion In New Construction 

NY State of Mind: Cuomo laid out an ambitious agenda that reminded some of Robert Moses and Nelson Rockefeller.

by JOHN GREGERSON | Jan 21, 2016

First came the big news... 

Delivering his annual "State of the State" address on Jan. 13, New York State Gov. Andrew Cuomo boldly pledged to spend billions over the next decade to upgrade state roads, bridges, facilities, and sewer systems. The plan represents an ambitious undertaking of a magnitude that “would make Gov. Rockefeller blush," Cuomo told the assembled legislators, referencing the late Nelson Rockefeller's own multi-billion-dollar spending spree in the 1960s.

"I propose the New York: Built to Lead program, a $100-billion investment in transformative projects statewide," he announced, adding it would create 250,000 new construction jobs. "All experts are unanimous that investment today in the infrastructure of tomorrow creates jobs and builds economic strength. In Washington, both sides agree. However, like so many issues, Washington just can’t get it done. In New York, we can and we will."

Of course, one big question loomed large: How does the Governor propose to pay for the program?

Tunnel vision: The mega infrastructure plan includes $26 billion for NYC Transit; some $3 billion for Penn Station.   

Among other investments, the "Built to Lead" program calls for $26 billion for NYC transit, $22 billion for highways and bridges, and $20 billion for affordable housing. It also allocates $3 billion for renovations to mid-town Manhattan's Penn Station commuter rail hub and another $4 billion apiece for revamps to its LaGuardia and JFK international airports.

Funding will derive from a variety of sources, including state, federal and private, over a period of several years, according to Cuomo spokesman Rich Azzopardi. “There will always be cynics who say 'This can't be done' – in Albany that's a profession,” he told reporters, noting that the LaGuardia project, due to proceed this year, already proves otherwise.

Public-Private PartnershipS

To fund replacement of LaGuardia's Central Terminal Building with a 1.3-million-sq-ft, 35-gate structure, The Port Authority of New York & New Jersey has engaged in a public-private partnership (P3) with Gateway Partners, an entity charged with developing, operating and maintaining the new facility. As planned, Gateway, a consortium led by Vantage Airport Group and Meridiam Infrastructure, is investing $2.5 billion in the terminal, while Port Authority will fund $1.1 billion in related infrastructure improvements, including a parking structure. Gateway will recoup its investment from rent and other fees collected from airlines and retailers at the terminal. The project is the largest P3 ever undertaken in the NY-NJ region, notes Gateway, which includes construction managers and contractors Skanska and Walsh Construction, plus architect HOK, and transportation engineer Parsons Brinckerhoff.

Upgrades to JFK may follow a similar model, according to a state-issued capital investment document.

Aiming for 2021 takeoff: LaGuardia's P3 Gateway Partners include Skanska, Walsh, HOK, Parsons Brinckerhoff.

Other projects likely will receive more conventional funding, allocated over a period of five years in the case of road and bridge upgrades. The state already has committed $5 billion to the program in its current fiscal budget. If all goes as planned, meaning the state keeps it budget in check, lawmakers would commit additional funding in next year's budget, with remaining capital allocated in fiscal 2018, 2019 and 2020. Federal funding also would likely figure into the equation.

In fact, it had better. Cuomo's broader, grand plan anticipates nearly $25 billion in federal support, not surprising, given a sizable chunk of the state's budget relies on federal funding. Depending on the project, funding also may come from the city's Metropolitan Transportation Authority and the NY State Thruway Authority, among other sources.

Some critics maintain funding issues are too rife with “ifs” and too murky in detail. “I have no idea how it all adds up,” lamented NY State Senate Majority Leader John DeFrancisco, talking to reporters.

Of course, as ever, even in the Empire State, the devil will be in those details.