Governor Kathy Hochul and Mayor Eric Adams unveiled a groundbreaking agreement on Tuesday to support funding a new Port Authority Bus Terminal in Midtown Manhattan.
The innovative finance plan allocates 40 years of property tax revenues from three future Midtown office developments toward the terminal’s construction.
The strategy, known as “payment in lieu of taxes” (PILOTs), is projected to generate approximately $2 billion, covering nearly 20% of the ambitious $10 billion project.
This financial contribution, however, falls short of the $2.5 billion initially sought by the Port Authority in February.
Governor Hochul said, “Anyone entering New York City should be greeted by a world-class travel hub, and now we are one step closer to a revitalized Port Authority Bus Terminal.”
The proposed terminal, designed by the renowned British architect Norman Foster, aims to replace the current 73-year-old facility, which has long been criticized for its cramped and outdated conditions.
The new terminal, boasting 2.1 million square feet of space, promises to enhance the travel experience for commuters and act as a world-class gateway to the region.
Two office buildings integral to the funding plan are set to rise directly above the new terminal at the corner of 8th Avenue and 42nd Street, with another to be developed on nearby Port Authority-owned land, contingent on market demand.
Kevin O’Toole, the chair of the Port Authority, expressed optimism about the project, stating, “Our agreement with the city to provide a portion of the financing toward a new Midtown Bus Terminal will allow the Port Authority to move forward with a project that will generate economic benefits for our entire region while improving the quality of life in the community where the terminal is located. We will replace this aging eyesore with a world-class gateway our region deserves.”
The plan also includes creating a new staging area and ramp on the west side, allowing buses to access the Lincoln Tunnel directly. This initiative is expected to alleviate the congestion plaguing Hell’s Kitchen’s streets by eliminating idling buses.
Mayor Eric Adams stated, “For decades, New Yorkers have watched the Port Authority Bus Terminal deteriorate from the world-class facility it was in the 1950s to the stain it is on Midtown today. The days of watching are over, and the days of acting are here. Our investment over the course of the coming years, and our partnership with the Port Authority will help develop a new crown jewel for Midtown.”
Despite the project’s potential to revolutionize bus transit in New York, it hinges on several uncertainties, including securing federal financing and the viability of the PILOTs, especially in a post-COVID world where remote work has become more common.
The challenge of funding such large-scale projects through PILOTs is underscored by the difficulties faced in redesigning Penn Station, another project initially intended to be funded similarly but has faced setbacks due to economic challenges.
The Port Authority is eager to commence construction, pending approval of plans and funding, and hopes to unveil the new terminal to New Yorkers by 2032. Yet, realizing this vision depends on overcoming significant financial and logistical hurdles.
