Think Bridgegate Was Bad? The Port Authority Is a Daily Disaster
Bridgegate stinks like dead fish at the Jersey Shore. The four days of lane closings on a ramp to the George Washington Bridge in Fort Lee, N.J., in September 2013 delayed EMS crews, commuters, and children going to school. Investigators allege that New Jersey Governor Chris Christie’s deputy chief of staff ordered the bottleneck to punish the Democratic mayor of Fort Lee for not supporting the reelection of the Republican governor. "Is it wrong that I am smiling?" the aide, Bridget Anne Kelly, wrote in a text message. “No,” answered a Port Authority executive and Christie ally, David Wildstein.
Wildstein pleaded guilty May 1 to federal charges of conspiracy in the Fort Lee traffic jams. Kelly and Bill Baroni, a former Christie appointee at the Port Authority, were indicted in federal court over their alleged roles in the tie-up. Wildstein's lawyer, Alan Zegas, repeated his allegation that Christie knew of the lane closures while they were occurring, while Christie released a statement saying the charges "make clear" that wasn't the case.
What people outside New York don't understand is that Bridgegate is merely an extreme example of a chronic problem: the political infection of one of America's most important infrastructure agencies, the Port Authority of New York and New Jersey. Christie and New York Governor Andrew Cuomo have used the agency to dole out patronage jobs and to steer money and resources from the disfavored to the favored, as have their predecessors.
Consider this: If you're driving a big rig from Philadelphia to Boston and you pass through New York City on Interstate 95, your cash toll at the bridge is $114. Even ordinary cars pay $14 at the cash lanes. The annual toll revenue of $650 million is far more than the agency needs for the upkeep of the span, one of the nation's busiest.
You also overpay if you pass through John F. Kennedy International Airport, La Guardia Airport, or Newark Liberty International Airport. All three are being milked as cash cows even though they have major investment deficits. A 1982 federal law prohibits the use of airport revenue for non-airport uses, but the New York airports are grandfathered in along with a handful of others around the country, including those of Chicago, San Francisco, Denver, and Boston.
The winners are local projects favored by Christie, Cuomo, and their predecessors. For New York, the costliest pet project of the past decade has been the multibillion-dollar reconstruction of the World Trade Center, although those expenses are finally winding down. For New Jersey, it's the perennially money-losing Port Authority Trans-Hudson commuter rail line—PATH, for short. Most commuter rail lines are subsidized by state governments, but the PATH is completely paid for by the Port Authority, which is to say, by Parisians going through JFK and Pennsylvanians on the George Washington Bridge. New Jersey has one of the nation's highest tax burdens overall, but its gasoline tax, which funds transportation infrastructure, is the nation's second-lowest, after Alaska's.
The Port Authority's byzantine structure of cross-subsidies has left some of New York’s most critical facilities starved for investment. Last year TV host John Oliver called the Port Authority Bus Terminal "the worst place on planet Earth" and said even the cockroaches want to escape. When Vice President Joe Biden wanted to make a point about infrastructure last year, he said anyone brought to La Guardia Airport in blindfold would think, "I must be in some Third World country."
"The Port Authority was once the premier public organization in the country, if not the world, for regional development, for financing, and for professionalism. It did them independently of political pressures. But it was tarnished by abuses of power," says Mitchell Moss, director of the Rudin Center for Transportation at New York University's Wagner Graduate School of Public Service.
"Christie," says Moss, referring to Bridgegate, "brought it to a new form."
The Port District, roughly the area within 25 miles of the Statue of Liberty, has a population of 18 million and a gross domestic product of more than $1 trillion, which would make it 15th biggest in the world if it were a separate country. It’s a gateway between the U.S. and the rest of the world. When the Port Authority was created in 1921, it was an exemplar of Progressive Era efficiency and freedom from corruption. Woodrow Wilson, who was governor of New Jersey from 1911 until his inauguration as president in 1913, helped lay the groundwork for it. Within a period of just four years the agency built the George Washington Bridge, then the world's longest suspension bridge, and three other spans connecting New York and New Jersey. In 1937 it opened the first tube of the Lincoln Tunnel. The Port Authority was one of the few institutions capable of standing up to Robert Moses, the "Master Builder" who reigned over New York from the 1920s to the 1960s.
Gradually, things deteriorated. A turning point was the decision in the 1960s to build a "world trade center" in lower Manhattan. To many observers, that looked a lot more like economic development for New York City than a bi-state transportation or port project. New Jersey’s appointees on the Port Authority board didn’t want the agency to take on the project. To win their support, the New York-appointed commissioners agreed that the Port Authority would take over and operate a bankrupt commuter railroad whose tunnels ran under the Hudson River. It became the PATH.
In 1994, New Jersey Governor Christine Todd Whitman demanded the power to appoint a deputy executive director to offset a New York-appointed executive director she didn’t like. Since then the Port Authority has had two day-to-day bosses—one effectively reporting to Trenton and one to Albany. The divided leadership made politicization all the worse.
Then came the terror attacks of Sept. 11, 2001, which killed 84 employees of the Port Authority, including its executive director. The Port Authority had completed a long-term lease of the World Trade Center weeks earlier. The first years after the tragedy were chaotic. Eventually the Port Authority was pulled back in to build and operate key parts of the new center. Because of design decisions made before it got reinvolved, the 1,776-foot-tall 1 World Trade Center (aka "the Freedom Tower") is perhaps the world's most expensive office building at $3.2 billion. A new transit hub designed by the superstar Spanish architect Santiago Calatrava costs about $4 billion. It has vast expanses of white marble, and a spiky centerpiece, called the Oculus, looks like a cathedral from the inside and a mutant stegosaurus from the outside.
Building anew on a grand scale may send a message to terrorists that America is unbowed, but every dollar spent there is one not spent on critical infrastructure elsewhere. The worst case of neglect is the Port Authority Bus Terminal, the world's busiest. It's operating above capacity and aging and breaking down in a way that no facelift can repair. "The whole thing starts right there," Mark Schaff, the bus terminal's assistant general manager, said during a behind-the-scenes tour last year. He pointed to an area on the third floor of the north wing. Buses pull into diagonal loading spots and have to back up into traffic to exit. If buses arrive faster than others can depart, a bottleneck forms. Buses can’t get to empty loading spots. The congestion radiates outward. As passengers keep arriving, confusion reigns. In the Port Authority's new headquarters, which overlook the somber September 11 memorial, is a scale model of a replacement for the bus terminal that features a large office building over it. But selling air rights for an office building will cover only a fraction of the $8 billion to $11 billion that's needed. No one seems sure where the rest will come from.
As for the airports, La Guardia, Newark Liberty, and JFK ranked first, second, and fifth, respectively, in the U.S. last year on Bloomberg's Airport Frustration Index. Capital spending at JFK isn’t even high enough to keep up with depreciation, says Columbia University professor Rohit Aggarwala, who uses the airport as a case study in the School of International & Public Affairs. (Aggarwala worked for former Mayor Michael Bloomberg and is a principal at Bloomberg Associates.) The Central Terminal Building at La Guardia that Biden mocked is finally due for a reconstruction after repeated delays. Also this summer, JFK will rebuild one of its main runways—which is good but will inevitably add to delays.
Joe Sitt, a real estate investor, says it's a mistake for New York and New Jersey to regard investment in the airports as a regrettable necessity when it can be a source of competitive advantage. He's chairman and founder of the Global Gateway Alliance, a business group advocating for the airports. "Seven and a half years I'm working on this," Sitt said last year. "This is not a far-out concept. Doha, Dubai, Shanghai, Istanbul—they realize what a critical economic driver airports are."
New York is not the only U.S. metro that has trouble building and maintaining infrastructure. According to the Bureau of Economic Analysis, the average government-owned structure in the U.S. is older than it has been since at least 1925. The average structure's age was 26.4 years in 2013, twice as old as in the 1920s. Government investment in structures hit a new low of 1.7 percent of gross domestic product in 2013, the last year for which figures are available. Only half a percent of gross domestic product—a new low—went for new construction of structures by government in 2013. That's only a quarter of the share that went for that purpose half a century ago, when the U.S. was building out the Interstate Highway System.
When Americans do build these days, they often make a hash of it. The costly reconstruction of the World Trade Center is only one example. Budget overruns have been massive in such projects as Boston's Central Artery reconstruction, known as the Big Dig; the Denver International Airport; the eastern span of the San Francisco-Oakland Bay Bridge; and the Department of Homeland Security's attempt to convert a former mental institution into a headquarters in Washington. Construction on California's bullet train project has barely begun, but the projected cost has already swollen to $68 billion, twice the original projection.
Back to Christie. His name began to circulate as a potential president as soon as he was elected in 2009 as a pugnacious, entertaining Republican in a Democratic-leaning state. In 2010 he killed plans for adding a pair of rail tunnels under the Hudson River known as Access to the Region's Core. The ARC tunnels would have relieved pressure on the maxed-out North River Tunnels, which were built between 1904 and 1908. The federal government was going to pay for half of the $8.7 billion project, with the Port Authority and the New Jersey Turnpike Authority picking up the remainder. Christie argued that he was defending state taxpayers from probable cost overruns that would have fallen on their shoulders. His critics said he should have negotiated for more burden-sharing rather than killing the project.
For Christie, there was one big short-term upside from killing the Hudson tunnel project. By axing it he managed to gain control of $1.8 billion of the money that was earmarked for it and to direct those funds to fix the aging Pulaski Skyway and other New Jersey roads. That spared him from having to find state funds for the repair work, which might have forced the gas tax up and blemished his record with primary voters in Iowa and New Hampshire.
Justifying the diversion of funds was tricky, though. Port Authority lawyers privately told New Jersey that bondholder covenants prohibited the use of agency funds for the Pulaski Skyway because it wasn't a Port facility. When Christie bulldozed ahead and announced in 2011 that he was going to use the money to repair the elevated roadway, Port Authority lawyers scrambled to devise a legal justification. “We are now saying we have legislative authority,” a revised memo in late March said, according to the New York Times.
Days later the Port Authority approved a resolution calling the road projects “access infrastructure enhancement,” meaning that fixing the Pulaski Skyway would improve access to the Lincoln Tunnel. Except the Pulaski Skyway doesn’t lead to the Lincoln Tunnel. It leads to the Holland Tunnel, three miles south. The elastic concept of geography is being investigated by the Securities and Exchange Commission, the U.S. Attorney's Office, and Manhattan District Attorney Cyrus Vance Jr. Christie told reporters last year that he has nothing to apologize for: “Dozens and dozens of lawyers from both sides of the river reviewed that financing plan and approved it, as did the commissioners of the Port Authority.”
It's pretty clear to most concerned that the Port Authority needs to be depoliticized. The question is, how? Last year, lawmakers in New York and New Jersey voted for legislation that would have taken away some of the power of governors of the two states to meddle. In a rare moment of bipartisanship, the bills passed unanimously in the upper and lower houses of both states' legislatures. That's four bodies with zero votes against. But two days after Christmas, both Cuomo and Christie vetoed the measures, arguing that their own reform proposals were better.
Christie isn’t even sure there needs to be a Port Authority. “The best way to deal with this is to take the Hatfields and McCoys and move them to separate homes,” Christie said at a press conference in March 2014. That would be a mistake, says NYU's Moss. "It's an agency which has know-how, great talent, the ability to do things, to override local zoning, to mobilize money without taxing, and to draw upon a terrific professional staff. The ability to get something done is something we take for granted," Moss says. "We shouldn't. It's hard to create. It's very easy to diminish and destroy." "It could be simpler and cleaner if you separated the different parts of the Port into individual agencies," Stephen Berger, a former Port Authority executive director, told Crain’s New York Business last year. "It would also be insane."
The governors and legislatures are groping toward a reorg that would create a new position of chief executive, who would be appointed by the board of commissioners rather than by either state's governor, providing a measure of insulation from politics. Patrick Foye, the Cuomo-appointed executive director, is a natural candidate for the post, but he got on the wrong side of Christie over Bridgegate. If he puts his name up, Christie might manage to knock it down by pressuring his appointees on the board.
So it goes at the Port Authority. Earlier this year Foye talked with 20 or so young employees of the Port Authority who have been marked as up-and-comers. The meeting was in the boardroom of the agency's new headquarters, overlooking the somber September 11 memorial. "This has been the premier transportation agency in this country," Foye said. The talk turned to Bridgegate. "The events of the past 15 months have done incalculable damage to the brand equity of the Port Authority name and done incalculable damage to morale," he said. "Bizarre things happened here."
(Corrects to say that Port Authority completed a long-term lease of the World Trade Center in 2001, not a sale.)