The Port Authority of New York and New Jersey and the Metropolitan Transportation Authority, in the midst of a battle to reverse the deterioration in the region's subways, airports, and transportation infrastructure, both shook up their leadership this week.
The Port Authority’s board, during a special meeting Thursday at 4 World Trade Center in lower Manhattan, confirmed Kevin O’Toole as board chairman and Rick Cotton as executive director.
O’Toole, a former state senator from New Jersey, will succeed the retiring John Degnan while Cotton, former New York State special counsel, will replace Patrick Foye. The respective governors of the bi-state agency, New Jersey’s Chris Christie and New York’s Andrew Cuomo, appointed the pair.
Also on Thursday, the MTA confirmed the appointment of Foye as president. He will work with chairman Joseph Lhota and managing director Veronique “Ronnie” Hakim.
Foye and Hakim will manage the agency on a day-to-day basis and serve in a nascent Office of the Chairman, which will also include chief development officer Janno Lieber. Foye will lead key innovation and modernization initiatives, according to an MTA statement, while Hakim, the former interim executive director, will be responsible for authority operations.
They will coordinate a plan Lhota announced July 25 to stabilize and modernize the aging subway system. Cuomo a month earlier declared a state of emergency at the MTA amid a rash of breakdowns, derailments and track fires.
The MTA, with roughly $38 billion in debt, operates New York City’s subway and bus systems, two commuter railroads and several bridges and tunnels.
Port Authority, which operates the region’s airports along with bridges and tunnels, shipping ports, the World Trade Center site and a bus terminal, has several major projects on its plate as it recovers from the so-called Bridgegate scandal, in which two former Christie aides received prison time for a political plot to create traffic jams in Fort Lee, near the George Washington Bridge.
Both agencies are juggling finances while awaiting a federal infrastructure program that probably won't materialize this year.
"States and regional transportation agencies must still tackle long lists of projects," S&P Global Ratings said Thursday. "But while demand for roadway and transit improvements increases, funding for capital and operating budgets hasn't necessarily kept pace."
Neither Port Authority nor MTA are merely reshuffling deck chairs, according to Anthony Figliola, vice president at Empire Government Strategies in Uniondale, N.Y.
“The MTA has many critical issues that must be solved,” he said. “Both Lhota and Foye are skilled operators who have a no-nonsense, roll-up-your-sleeves mentality. I am confident that Lhota, who is doing this work gratis, can solve these issues.
“The Port Authority is making needed changes as they move major infrastructure projects down the field, including the Gateway tunnel, [John F. Kennedy] airport and LaGuardia airport,” he said.
O’Toole promised to hit the ground running.
“The next 30 days we'll get to roll up our sleeves, get to know the people and move forward,” O'Toole said after the board unanimously approved his appointment.
O'Toole joined the board in July. “Thirty-one days here at the Port and things have changed dramatically,” he said.
Cotton has worked for Cuomo as special counsel for interagency initiatives, overseeing many of the governor’s infrastructure projects, including the new Tappan Zee Bridge.
The new leaders must lead a search for a chief executive acceptable to both governors.
Cuomo’s recent appointment of Jeff Lynford as Port Authority vice chairman impressed Figliola.
“He is a well-respected Manhattan businessman with a solid finance background and will continue to be a crucial asset to the board,” he said.
Port Authority has about $20 billion in outstanding debt.
Its adopted 2017-2026 capital program of $32.2 billion is up $4.6 billion, or 17%, from its $27.6 billion plan for 2014-2023. The plan reflects commitments related to a replacement bus terminal in Manhattan, airport terminal redevelopment facilities, and the Gateway tunnel project.
“[The authority's] diverse and high-profile asset base is a significant strength,” said Fitch Ratings. “However, its significantly more involved capital plan coupled with a highly politicized operating environment place its ratings one notch below senior lien ratings for both peers.”
Fitch and S&P Global Ratings rate the Port Authority AA-minus, while Moody's Investors Service rates it Aa3.
Foye, who served on the MTA board from 2010 to 2012, cited “an urgent effort to fix multiple challenges there.”
MTA is working with a five-year, $32 billion capital program. Cuomo in late June committed an additional $1 billion without specifying where it would come from.
Foye, who ordered the Fort Lee traffic lanes reopened amid Bridgegate, credited outgoing chairman Degnan and former vice chairman Scott Rechler for helping stabilize the Port Authority after the scandal, and helping boost transparency and public trust.
According to Foye, the strong performance of the Port Authority Trans-Hudson, or PATH commuter rail lines during the so-called summer of hell reflects the “culture and work ethic” of the authority.
He said PATH, whose projected 80 million customers for 2017 would represents a 10% year-over-year increase, has an on-time performance of greater than 98% and could be one of the first railroads to meet a federally mandated deadline for positive train control, a remote-control system designed to minimize accident risk.