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on Fri Oct 2 10:10:12 2015
edf40wrjww2msgDetail:detailStr fiogf49gjkf0d Politico New York
Port commissioner pushes Amtrak fee to fund cross-Hudson tunnelBy Ryan Hutchins
6:14 p.m. | Sep. 30, 2015Amtrak should levy surcharges on passengers traveling the Northeast Corridor as a way to help pay for the cost of building a new rail tunnel under the Hudson River, a Port Authority commissioner said Wednesday at an infrastructure event hosted by Politico New York.
Commissioner Kenneth Lipper, a financier and New York City former deputy mayor, said such a surcharge could help pay down whatever long-term debt is needed to fund the massive project, known as Gateway. Most of the initial money to pay for the tunnel will have come from the federal government — through direct grant dollars and through low-interest loans to New York and New Jersey, he said.
“State agencies and the states themselves do not have sufficient funds to do this without the inexpensive, federally insured bonding capability,” Lipper said during the Building New York's Future event in Midtown. “In addition to that, you’re going to have to have a source of funding permanently. That would require a surcharge on every Amtrak ticket, very similar to what we do with flights that come into the Port Authority terminals. There’s a per passenger fee that goes to the crew maintenance and upkeep of the airports.”
The comments come two weeks after Gov. Chris Christie of New Jersey and Gov. Andrew Cuomo of New York said in a letter to President Barack Obama that they would cover 50 percent of the cost of a new tunnel if the federal government agreed to fund the remainder. They said the Port Authority of New York and New Jersey should be designated the lead agency in coordinating the effort.
During Wednesday's discussion, New York City Councilman Brad Lander wondered if Lipper was “essentially saying, ‘we’d like the federal government to pay for most of it, but we’d like to control all of it.’”
“No, it’s not that we’re seeking to control it,” Lipper replied. “I have no problem with anyone else controlling it.”
He said there was a need, though, to create a revenue stream to help everyone involved pay back the cost, estimated to be around $20 billion. The program, which also involves work beyond the tunnel, has no major source of funding — just the broad commitment from the two governors.
Jim Simpson, a former head of the Federal Transit Administration and now a board member at China Construction America, said he did not see any reason a ticket surcharge — even if it included NJ Transit trains, which account for most of the existing tunnel’s traffic — would generate enough revenue to put a significant dent in the cost. A $1 per ticket fee would generate roughly $52 million per year, he said, calling it hardly enough to cover the interest on the loans the states will need to take.
Instead, Simpson advocated a shotgun approach, suggesting the full project be put aside for now and that just one tube be built. The cost would be $5 billion to $10 billion, he said. Doing that would avert the looming disaster that has made this conversation so important: Amtrak says it will need to close at least one tube in the existing tunnel within two decades to make critical repairs.
“You can also get that project done on time and on budget,” said Simpson, the former New Jersey transportation commissioner. “You take this whole master plan project — the $20 billion. By the time you’re ready it will be $40 billion to $50 billion, we’ll be several generations down the road and nothing will get build. The most critical thing right now — and that’s why I’m here today — is to get the one tunnel under the Hudson River built so we don’t have any interruption of surface.”
The current, two-tube tunnel is a century old. It was reaching the end of its useful life on its own, but flooding caused by Hurricane Sandy as just worsened the problem. Amtrak says mineral residue left by the seawater continues to erode key components in the tunnel, and there’s only so much that can be done while both tubes are still in use. A full rebuild would take some two years, the railroad has said.
Wednesday's discussion also included a debate about whether the Port Authority would disinvest itself from major real estate and other holdings in order to focus more closely on that core transportation mission. Lipper’s primary goal since being appointed to the board by Cuomo in 2013 has been to push for that shift. He said the agency needs to sell the Red Hook container terminal in Brooklyn — prompting a fiery response from Lander — and that it should unload 1 World Trade Center.
The idea of selling the trade center any time soon did not strike Christopher Ward, a senior vice president and chief executive of Metro New York for AECOM, as a smart idea. He’s the former executive director of the Port Authority and helped get construction of the building back on track. He said, with time, it will offer the agency a key revenue source.
“Granted, a $3.2 billion, 2.2 million-square-foot [tower] was not the best building to build in terms of a real estate transactions,” Ward said. “In terms of cash flow to the Port Authority — for when that building starts to generate positive revenue within the period that the Port Authority is facing critical financial issues — is far more advantageous really to the Port Authority than a fire sale, selling off an asset today to pay for some short term investment.”
He cautioned the “trade center is very, very different than Red Hook.”
“There is no contemplation of a fire sale,” Lipper said, noting much of the board has vast real estate experience and would not make a rash decision. “I think we have ability to recognize value.
The cross-Hudson panel discussion also included Seth Pinsky, an executive vice president at RXR Realty and former Bloomberg administration official. A second panel discussion focused on funding the Metropolitan Transportation Authority’s capital plan. It included Nicole Gelinas, a senior fellow at the Manhattan Institute; Carol Kellerman, president of the Citizens Budget Commission; Stephen Smith, an analyst at Progress Real Estate Partners; and Tom Wright, the president of the Regional Plan Association.
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