Governor Cuomo wants you to believe that his mission at LaGuardia Airport is to “literally tear it down and rebuild it.” But like anything else in this filthy town, renovating New York City’s “third world” airport is actually a piecemeal project subject to the whims of politics. Overhauling LGA was supposed to cost $4 billion—it’s current projected cost is $5.3 billion.
The Wall Street Journal reports that Port Authority Chairman John Degnan, a Chris Christie appointee, “has become increasingly irritated with the project’s changing scope and rising costs.”
“As the project has expanded and as the numbers have been worked out, there have been other developments. We don’t live in a static environment,” Degnan told the paper, in essence saying that the Port Authority has bigger fish to fry—specifically a new bus terminal and the tunnels under the Hudson River that the man who appointed him refused to build.
But would you believe that the agency that conducts traffic studies based on revenge is riddled with political infighting?
Other Port Authority officials said New Jersey officials at the agency appeared to be trying to inflate the price of La Guardia’s overhaul as a political tactic ahead of negotiations over other big projects, including the Manhattan bus terminal.
That bus terminal is supposed to cost $10 billion, or whatever amount of money the Port Authority tells us it’s going to cost in 11 years, when it's projected to be finished. Right now, no one knows whether it’s going to be in Manhattan or New Jersey.
The LaGuardia renovations are supposed to be completed by 2021, with some new sections accessible by 2019, when we’ll still be talking about Governor Cuomo’s idea to build another AirTrain.
[UPDATE // 1:46 PM] A spokesperson from the Port Authority sent us a letter to the Wall Street Journal's editors from the Port Authority's executive director, Pat Foye (a Cuomo appointee) disputing the paper's $5.3 billion figure, which was cited in the original story next to commentary from Port Authority chairman John Degnan (a Christie appointee).
Here is the letter in full:
Letter from Pat Foye to WSJ editor:
Today’s article “LaGuardia’s Revamp Hits $5.3 Billion” is misleading and irresponsible.
The article implies that the cost of the project has increased by $1 billion to $5.3 billion since February. That is dead wrong.
Last year, the public was presented with a $4 billion design and construction plan to redevelop LaGuardia into a 21st Century airport. On Thursday, the Board will be voting on a $4.015 billion design and construction plan that will deliver a state-of-the-art airport in an expedited time-frame, two-thirds of the cost of which will be financed by the private sector and existing passenger user fees, and will transfer any potential construction overruns to the private sector.
The Port Authority's own direct contribution to construction of the new terminal and supporting infrastructure remains the same with no increase at all. In fact, the new Central Hall will now be delivered for $90 million less than the $400 million that the Board established last May.
To reach $5.3B, today's article lumps in over $600 million of money spent as far back as 2004 for planning and prior projects, most of which are long completed. These are sunk costs related to the prior piecemeal approach to development at the airport and they are not remotely part of Gov. Cuomo’s vision for a new airport.
The article completes its irresponsible and inaccurate claim of a “construction cost increase” by suggesting that normal and expected accounting allocations for overhead and accounting reserves are associated with the design and construction cost of the project. Those are standard allocations associated with every Port Authority capital project and cannot conceivably be categorized as an increase the estimated design and construction costs.
Lumping together spending on prior projects more than a decade old and allocations related to Port Authority overhead is a blatant attempt to artificially inflate the cost and mislead the public about the modernization of LaGuardia.