Sky's the limit for Newark Airport

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With a $2.4 billion modernization of Newark Liberty International Airport already taking flight, an urban planning group wants the airport to spread its wings further with a large-scale infrastructure project.

The Regional Plan Association last month called for an estimated $27 billion reconfiguration of Newark Liberty that would move the main terminal closer to the airport’s train station and eventually add a third main runway.

The group’s fourth regional plan for the New York City metropolitan area, a 379-page report released on Nov. 30, called for a range of initiatives over the next 40 years. The reshaping of airport, located 15 miles outside of Manhattan, would link terminals directly to rail stations serviced by Amtrak, New Jersey Transit and PATH and free up space for the new runway.

“It would make Newark Airport one of the most modern and most connected airports in the country,” said Richard Barone, the RPA’s vice president for transportation. “It would be a radically different airport.”

The RPA’s vision for Newark Liberty comes after the Port Authority of New York and New Jersey started an airport redevelopment that will feature a new one million-square-foot terminal building that replaces the one that opened in 1973. The new facility, which the Port Authority is funding through its $32 billion 10-year capital plan, will include 33 domestic aircraft gates that can accommodate up to 13.6 million passengers yearly with flexibility to expand in the future. The terminal, which is slated to become fully operational in 2022, will be supported by a 3,000-car parking garage complex that connects to a pedestrian bridge and hub connection linking passengers to the Air Train.

An expansion of Newark Liberty after the latest upgrade would involve substantial investment from the Port Authority and is likely to require the buyout of a few dozen residential and industrial properties just south of the airport. The RPA said the ambitious infrastructure project could be paid for by Port Authority revenues derived primarily from airline fees and passenger facility charges. Barone said this type of undertaking would only be possible if the Port Authority phases out airport subsidies to other agency operations and explores public-private partnerships.

“There are going to have to be a lot of other revenue sources to pay for something like this,” said Barone. “There is a lot opportunity for different development around the airport.”

The Port Authority, which adopted a $3.4 billion capital plan for 2018 on Dec. 7, released a report in January showing that 2016 marked a record year for Newark Liberty with 40 million total passengers, That underscored the need to replace its 44-year old main terminal, which has a design capacity of nine million. The bi-state agency’s board of commissioners approved allocating $496 million for early construction work of the new main terminal phase work along with an additional $258 million toward future improving parking and AirTrain alignment improvements.

Port Authority officials estimate that Newark Airport’s Terminal A modernization will generate 9,000 jobs, $600 million in wages and $3.3 billion in economic activity over the life of the project. The agency’s capital plan also dedicates $1.7 billion to build a new connection linking PATH trains from Lower Manhattan directly to Newark Liberty’s rail station, which is now serviced by New Jersey Transit.

Newark Mayor Ras Baraka said connecting PATH trains to the airport will create more transit access fueling economic development in New Jersey’s largest city, which is rated just above junk level.

Baraka released a report during a Nov. 30 RPA event at the New School in Manhattan that showed PATH extension would create a new PATH station in the South Ward section of Newark leading to building opportunities in a largely underdeveloped area of the city. He emphasized the city’s plans to develop warehousing around the airport’s seaport with the possibility of a free trade zone as a further benefit of the project.

“Over 50% of the residents in the city take public transportation and those folks that live five minutes from the airport it takes them two hours to get there now by public transportation, which I think is ridiculous," Baraka said. “We need significant investment in the kind of transportation infrastructure that would allow our residents to get back and forth to the jobs that are created not just in the airport but around the airport.”

The Port Authority, which had around $21.2 billion of consolidated bonds outstanding at the end of 2016 based on its latest financial statement, has credit ratings of Aa3 by Moody's Investors Service and AA-minus by S&P Global Ratings and Fitch Ratings. The Tri-State Transportation Campaign has argued that the agency should focus on projects other than transit access to Newark Airport, such as funding a new or upgraded Manhattan bus terminal and the Gateway program’s long-stalled dual-track rail tunnel under the Hudson River.

“Lower priority needs, such as the PATH extension, should be addressed in more cost-effective ways like bus service,” said Vincent Pellecchia, associate director at Tri-State. “Considering the extension’s ridership projections of about 7,000 riders per day, a robust bus service with priority treatments could obviate the need for the PATH extension.”

The Port Authority is tackling the Newark airport development with a design-build model similar to other major infrastructure projects it has undertaken, including a new $4 billion terminal at LaGuardia Airport and a $1.5 billion Goethals Bridge replacement. Catherine Cronin, the Port Authority’s Newark Liberty redevelopment program director, said at the Design-Build Institute of America conference in Philadelphia that an aggressive timeline necessitated this delivery method. Twenty one of the terminal’s 33 gates need to be opened by 2021 prior to a full completion in 2022.

“You can’t build half a terminal so in reality a whole terminal has to be done in slightly over three years,” Cronin said. “To get that kind of a construction schedule, we had to go with a design-build.”

Barone said a design-build strategy will be an integral part of any longer view execution for a bigger Newark Airport that can capture more passengers with increased public transportation linkage. A grand project of this scope also could include a design-build-operate-maintain-finance method featuring private concessions maintaining airport operations along with raising private capital for reconstruction costs, he said.

“There will be a whole different menu of options to pay for this,” said Barone. “Newark has real prime infrastructure right next to it.”

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