Port Sets P3 Air Rights Deal

The Port Authority of New York and New Jersey will lease air rights over its bus terminal in Midtown Manhattan for 99 years to 20 X Square Associates LLC for $500 million, the agency announced last week. 20 X Square, a joint venture of Vornado Realty Trust and Lawrence Ruben Co., plans to build a 1.3-square-foot office tower over the bus terminal. In addition, the developer will build 18 new bus gates and upgrade existing gates to increase capacity by 18% and will create 60,000 square feet of retail space at the terminal. The terminal currently handles 7,000 buses and 200,000 commuters each day.The Port Authority plans to use part of the rental payments, which will be paid out over the term of the lease, to build a new $545 million bus garage nearby.“This is an example of the Port Authority leveraging its facilities to expand mass transit and satisfy the needs of its customers,” chairman Anthony R. Coscia said in a press release. “It is a creative public-private partnership that will benefit the entire region. Along with projects to build a new trans-Hudson passenger rail tunnel and a new New York Penn Station, an upgraded bus facility will give west-of-Hudson commuters an improved gateway to the region’s economic core.”