To the editor:
Stephen Eide’s article [“Let’s Break Up the Port Authority,” Summer 2016] neglects to mention some key facts on what the agency has accomplished over the last five years. The Port Authority currently has two major replacement bridge projects under way: the innovative Bayonne Bridge Raise the Roadway project; and the Goethals Bridge replacement that is being done through the first surface-transportation public-private partnership (PPP) in the Northeast. Together with a major restoration project under way at the George Washington Bridge, this is a cycle of bridge construction unprecedented since these trans-Hudson crossings were originally built in the 1920s and 1930s.
In addition to these major bridge projects, the Port Authority is commencing on a cycle of much needed investment in the region’s airports, starting with Terminal B at LaGuardia, also being done as a PPP, and Terminal A at Newark Airport. In total, billions of dollars are being invested in our region’s airports to make them world-class gateways, as part of our long-term capital plan that is putting billions of dollars into improving our overall regional transportation network. Through the Goethals and LaGuardia projects, the Port Authority has established a national leadership position in PPPs over the last three years.
Over the last five years, the agency has refocused its resources on transportation infrastructure while winding down work on the World Trade Center. We have divested noncore assets, including the World Trade Center retail project, which we sold to Westfield for $1.4 billion. We have divested many of the “economic-development” projects cited in the article, including our economic interests in the Essex County Resource Recovery facility, the Newark Legal Center, and parts of the Teleport complex; and we are in the process of divesting our interest in the Bathgate Industrial Park in the Bronx. We will continue to look at options to dispose of our remaining noncore real-estate assets, including our ownership stake at One World Trade Center.
Eide mentions only in passing the serious commitment to reform by the Board of Commissioners. The December 2014 “Report of the Special Panel on the Future of the Port Authority,” which was endorsed by both governors, laid out in a serious way a number of recommendations for reforming the governance and mission of the organization. The report emphasized focusing the agency’s resources on its core transportation needs and recommended divesting the agency’s noncore real-estate holdings, which we have been doing. It also called for reviewing the Port Authority’s bond resolution and debt structure. Eide’s idea of defeasing the Port Authority’s existing debt is not a new one. The billions of dollars in defeasance premium, especially in this time of very low interest rates, that would need to be paid to existing bondholders is a serious burden that would ultimately add to the cost of the region’s infrastructure.
While we recognize that there remains much room for improvement, the Port Authority of today continues to focus on its transportation mission and its highest-priority needs in a disciplined way. From a financing standpoint, we are exploring innovative approaches where it makes sense. We continue to manage our operating costs to keep them in line with the rate of inflation, including progress in controlling and reducing overtime—with more work to do. We welcome creative ideas for driving further efficiency. We owe it to the region and the traveling public.
Port Authority of New York & New Jersey
Stephen Eide responds:
I appreciate Pat Foye’s response to my article. Appointing Foye, an official of integrity and competence, as executive director is one of the few bright spots in the Port Authority’s recent history. By the same token, the board’s decision not to hire Foye as CEO is more evidence that the Port Authority has lost its way.
I’m encouraged to hear that the Port Authority is committed to divesting its noncore assets and refocusing on transportation. But with due respect, we have been hearing claims about “getting back to basics” for many years. The Port Authority remains involved in the Atlantic City International Airport—which is more about trying to revive that local economy than strengthen New York City–area infrastructure—and a recent Crain’s article reported on institutional ambivalence about selling One World Trade Center. It is still not safe to assume that the Port Authority board and staff have no interest in anything other than infrastructure.
The Port Authority takes great pride in its long legacy of engineering prowess, from building the George Washington Bridge to raising the Bayonne, but continually professes to be overwhelmed by the complexities of an administrative restructuring. In my article, I acknowledge that the plausibility of refunding some of the debt, which is requisite for any major breakup plan, hinges on a range of factors, including interest rates. But what I envision is not some blank-slate scenario in which all $20-plus billion of the agency’s bonds are refunded, but only so much as is necessary to redistribute the debt burden equitably and sustainably among its component units.
Breaking up the Port Authority is a sensible idea for two reasons. First, were we to redesign New York’s transportation system from scratch, no one would propose combining bus terminals, airports, transit, port commerce, bridges, and tunnels under the same management structure. Second, were the Port Authority serious about its intent to manage public functions in a businesslike manner, it would cease to embrace the notion of a conglomerate. While fashionable in the 1970s, conglomerates—where one CEO and board direct a portfolio of unrelated business entities—have been almost totally discredited in corporate America. Just as businesses do better when they focus on their core competencies, so should our transportation agencies. This is impossible for the Port Authority to do in its current makeup.
Victor Davis Hanson left out the most important source for understanding the civilizing role of international borders/boundaries: The Bible [“Imagine There’s No Border,” Summer 2016]. The idea that an artificial boundary should separate two jurisdictions with legitimate authority on their respective sides of the boundary line is laid out in the story of Abraham, who is promised a country within specific, limited boundaries. This biblical worldview, so prevalent in seventeenth-century writing and philosophy, was instrumental in creating the mind-set of the Protestant and Catholic ministers at Westphalia in 1648, when the modern world was born. It’s important to include this because, as the article implies, there is, within the oligarchic class, a conviction that progress demands going beyond the world of nation-states to a universal political entity, regardless of the fact that the nation-state system is the political dimension of modern, rational civilization. When the origins of the nation-state structure are seen in their proper light, it’s clear that the progressive movement has found the next new form for legitimating the age-old role of anti-Semitism: the hubris of universality, the new Babel.
New York, NY