Infrastructure Past, Present, and Future Casebook/JFK Terminal One
Introduction
[edit | edit source]This casebook is a case study on The New Terminal One at JFK International Airport developed by Matthew Bond, Aaron Taylor, and Honestie Kern as part of the Infrastructure Past, Present and Future: GOVT 490/CEIE 499 Fall 2024 course at George Mason University's Schar School of Policy and Government and the Volgenau School of Engineering, and Sid and Reva Dewberry Department of Civil, Environmental, and Infrastructure Engineering. Under the instruction of Professor Jonathan Gifford.
Summary
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John F. Kennedy International Airport's New Terminal One is part of a 19.5-billion-dollar redevelopment and renovation project of the JFK International Airport through a public-private partnership focused on revitalizing and enlarging JFK Airport's capacity to accommodate 21st-century aircraft and increased travel demand. John F Kennedy International Airport (JFK) is located in New York City, New York within the Queens borough (Lat/Long: N 40.6399281, W 73.7787922)[1]. The financers in partnership with the Port Authority of New York and New Jersey comprised of Ferrovial, JLC infrastructure, Ullico, and the Carlyle Group are overseeing the development of the complex which will consist of around 2.5 to 3 million square feet of space which will replace the existing terminals 1 and 2 as well as the previously demolished in 2013 terminal 3.[2] The New Terminal One will have 23 gates all of which will be international serving approximately 30 to 40 airline partners of the JFK airport.[3] The terminal will feature art from local New York City artists with an emphasis on integrating local culture into the feel of the airport.
Timeline
[edit | edit source]1948 - JFK International Airport opens as “New York International Airport”
1963 - JFK International Airport is given the official name “JFK International Airport”[4]
1998 - Terminal 1 opens serving 11 gates
October 2018- Former New York Governor Andrew Cuomo announces the plans improve passenger services at the JFK Airport.[5]
July 2019 - The port authority of New York and New Jersey formally approves the project plans for the new JFK Terminal One
September 8, 2022 - Construction begins on new JFK Terminal One.
September 8, 2022 - Dr. Gerrard Bushell assumes role of CEO over the New JFK Terminal One
April 1, 2024 - Jennifer Aument assumes the role of CEO of the New JFK Terminal One[6]
July 2024- 2.5 billion in green bonds were issued to the project
June 2026 - First 14 gates of the New Terminal One are set to open[7]
2030 - The New JFK Terminal One is set to be fully opened[7]
Actors
[edit | edit source]Gina Bigler, P.E. - Head of Construction for JFK Terminal One under the Port Authority
Jennifer Aument - As of April 1, 2024 CEO of New Terminal One[6]
The Carlyle Group - a global investment firm that is focused on a range of investments including infrastructure financially sponsoring the New JFK terminal one project
Ullico - an insurance company based in the United States focused on providing insurance to union families financially sponsoring the New JFK terminal one project
JLC Infrastructure - An asset management firm financially sponsoring the New JFK terminal one project
Port Authority of New York and New Jersey - A governmental body with the authority over the JFK airport and surrounding New York city transportation.[8]
AECOM Tishman - The Construction Manager (CM) that will be constructing New Terminal One
Gensler - The leading global design and architecture firm for JFK Terminal One
Funding and Financing
[edit | edit source]The construction of the New JFK International Airport is being done through a public-private partnership or P3 project with its private sponsors (Ferrovial, Ullico, JLC, and the Caryle Group) in conjunction with the Port Authority of New York and New Jersey. Ferrovial is a Spain-based company[9] focused on the investment and management for the new JFK terminal one project additionally according to the JFK terminal one CEO Jennifer Aument some of their investment will be going towards the pensions of the labor unions involved in the project[3]. JLC is an asset management firm and according to Jennifer Aument they are “Experts on deploying minority capital.[3]” Ullico is a insurance company based in the United States that focuses on providing insurance to union families. The Carlyle Group is a global investment firm that is focused on a range of investments including infrastructure.[2]
The Design build was originally financed through equity and debt of around 8.4 billion dollars. In July 2024 2.5 billion in green bonds were issued to the project which makes this project the recipient of the single largest bond issuance in the aviation industry[10]. These bonds were funded by the series 2024 bonds and the New York Transit Development cooperation acted as the conduit of these bonds.
Map of Location
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Institutional Arrangements
[edit | edit source]In 2019, JFK was the sixth busiest airport in the United States and the twentieth busiest in the world. JFK Terminal One is going to be operating one of four terminal complexes when it opens in 2026. In 2019, the existing Terminal One served 13% of the entire airport’s passenger traffic. [11]The prediction is to have an annual growth rate of 3.3% annually with tourism alone increasing the growth. In 2022, for the Regional Growth Rate, there were 60 million enplanements which is -8% as initial predictions prior to the COVID-19 pandemic. This figure has been increasingly recovering. The International Growth Rate had 17 million enplanements in 2022, at a rate of -23% attributed to the pandemic recovery. These figures are forecasted to only rise further and recover to a rate of 96% of the pre-pandemic rates by 2025. The future of Terminal One will increase capacity with 14 wide body gates and 5 live hardstands by 2028. The wide body gates are going to help with providing the airlines with peak-time flexibility. This is especially important for international flights. The live hardstands are going to assist with providing a space for the airplanes to park while in between flights. JFK Airport is expecting to service 100 million passengers by 2050. Terminal One will be installing biometric infrastructure to make boarding and deplaning a faster and smoother transition for passengers. A part of the $19 billion dollar investment will include 150% larger concessions that will provide duty free goods unlike any other United States International terminal. The New Terminal One will be a test case for privately operated terminals across the United States. As of recent years, there has been a large push overturning the control of airports over to Port Authorities. JFK is still operated by the Port Authority of New York and New Jersey.
Infrastructure Improvements
[edit | edit source]To handle the increased traffic of the New Terminal One, additional improvements are also being made to the existing infrastructure of JFK and its surrounding areas as part of the project. The JFK AirTrain, already accountable for 27,000 trips daily as of 2024[12], is expected to see an increase in capacity and frequency[13]. The elevated rail system connects the terminals of the airport and the airport to surrounding neighborhoods and the MTA system. Within the airport, the current tangled mess of roads and parking lots are expected to see a complete overhaul[13]. The roads will be reworked into a streamlined system of ring roads, with a north loop and a south loop. The parking lots, currently dotted around where space is available between the current roads, will be relocated to fit centrally within the rings. Outside of the airport, additional lanes in both directions are being added to the Van Wyck Expressway, connecting the airport to the neighborhoods to its north[13].
Narrative of the Case
[edit | edit source]A common theme found throughout the various press releases and media spots on the development of the new terminal is the perception that JFK is one of, if not the most crucial gateway into the United States. New York City is a city well known for its reputation as one of the first places visitors to the United States experience, with Ellis Island being one of the nation’s most prolific immigration stations. Even after the shuttering of the immigration station at Ellis Island, the city has remained one of the most common points of entry for immigrants arriving from overseas (excluding land crossings). JFK airport has effectively supplanted Ellis Island as the most popular point of entry for international travelers into the United States. In 2023, JFK was the busiest airport in the United States by international traffic, topping the Department of Transportation’s “Passenger Gateways to the World” list, with almost 10 million more international arrivals than LAX, the second airport on the list[14].
The perception of New York City, and by extension JFK, as a welcoming face representing New York City and the greater United States is evident in the words of governors, congresspeople, state legislators, and industry leaders. Both governors Cuomo and Hochul have referred to JFK as a “global gateway.”[15][16] This sentiment is further reinforced by the fact that the terminal will be dedicated entirely to international carriers, particularly Air France, Etihad, KLM, Korean Air, LOT Polish Airlines, EVA Airways, and Air Serbia.
Policy and Policy Issues
[edit | edit source]Public-Private Partnership
Central to the New Terminal One project (and the other improvement projects being made around JFK) is the public-private partnership arrangement between PANYNJ and the private contractors working on the project. Through the use of the public-private partnership arrangement, the upfront costs of the project are shouldered by the private sector, saving the Government of New York billions of dollars in taxpayer money. As the lessor of the new facilities, the PANYNJ will retain the rights to collecting rent and revenue sharing once the new facilities are operational. Once the first phase (the first 14 gates) come online, operational costs are expected to increase considerably. This is offset however by the rent the PANYNJ will be collecting from terminal tenants as well as revenue sharing from the ~400 million in revenues projected in 2026[17].
While the savings to the taxpayer are considerable, public-private partnerships can raise accountability and transparency questions, as the primary actors during the planning and construction phases are in the private sector.
Equity
The New Terminal one will be constructed through the use of union labor, with a commitment to local participation and workforce inclusion. The project aims to provide opportunities for local businesses, including minority- and women-owned business enterprises and service-disabled veteran-owned businesses according to the CEO Jennifer Aument.[3] Over 10,000 local jobs have been created through the construction of this project. The 2024 issuance bond to the project designated 40% of the issuance be allocated to minority and women owned business enterprises. By the Spring of 2024, according to Governor Hochul, that over 2.3 billion dollars had been invested in minority women-owned business enterprises over the course of the terminal project, a record setting amount[18].
Energy and Sustainability
Airports like JFK have faced challenges with energy demand, outages at terminals, and the consistency of power. JFK Terminal One partnered with AlphaStruxure to assist in development of a solar project that will include 13,000 solar panels making it the largest solar array in New York City.[19] This is a major policy development as it will be the largest in New York City and the largest at any airport terminal in the United States. This energy policy implementation will distribute energy from the solar panels, fuel cells, and a battery energy storage system to power the terminals everyday operations.[20] The terminal will have an integrated microgrid so that it will be operational in potential adverse circumstances all provided primarily through green forms of energy. The initiative is the airport's contribution towards the future and renewable energy.
Facilities Management
Janitorial, landscaping maintenance, pest control, and waste management services are currently being sought out to partner for facilities management. The Request for Proposal was announced in September 2024. There is a strong encouragement to partner with a firm that is diversified such as a minority or woman owned business. The RFP is due in late December 2024.[21]
Contracts
To date the airlines that are expecting to be operated out of the New Terminal One include: Air France, KLM, Etihad Airways, LOT Polish Airlines, Korean Air, EVA Airways, Air Serbia, SAS, and Air China. All of these have initiated contracts with expected usage to come in 2026. The New Terminal One is expecting to see additional airlines contract to be able to utilize the new terminal. The airlines are a single factor of the operators. There will be a vast majority of corporations that will engage in the 300,000 square feet for the dining, retail, lounges, and recreational areas. These corporations will be quick to be included in taking advantage of the newest and largest terminal to enhance their businesses as well.
Takeaways
[edit | edit source]The JFK New Terminal One will serve as a major international gateway to New York City and through its completion will have created over 10,000 jobs. Large efforts have been made towards sustainability with a large emphasis on green energy for its future functionality. With its bond issuance mandating at least 40% of contracts include minority and women-owned businesses this project was done with a strong attempt to distribute sub-contracts equitably.
Discussion Questions
[edit | edit source]How might the New JFK terminal one affect the traffic and accessibility of New York's transportation infrastructure?
What might be the implications for local neighborhoods and if it has a negative impact is that justified by the progress this project brings?
What are the benefits/downsides of Public-Private partnerships? Are they beneficial to the taxpayer and save money or are private industries getting involved where only the government should be or visa versa?
Are the 9.5 billion dollars spent on the JFK Terminal One going to pay off economically or is the cost too excessive for the benefit?
Considering the recent Covid-19 pandemic, is investing in airport infrastructure a safe bet for the future of travel?
Class readings for discussion Questions
[edit | edit source]Please read the following in Preparation for Class Discussion.
World Economic Forum - How is Covid 19 Changing airports?
State public-private partnership (P3) legislation and P3 project implementation
Impact of airport policies on regional development. Evidence from the Colombian case
Please read Chapter 2 and Chapter 9 of Private Financing of Public Transportation Infrastructure: Utilizing Public-Private Partnerships
Utilizing Public-Private partnerships
References
[edit | edit source]- ↑ "AirNav: KJFK - John F Kennedy International Airport". www.airnav.com. Retrieved 2024-10-20.
- ↑ a b "30". JFK International Airport Redevelopment. Retrieved 2024-10-20.
- ↑ a b c d "Proximocast: 20 minutes with Jenn Aument, The New Terminal One". Proximo. Retrieved 2024-10-20.
- ↑ "Exploring New York JFK Airport and History". flyive.com. 2024-02-16. Retrieved 2024-10-20.
- ↑ "Governor Cuomo Announces $13 Billion Plan to Transform JFK Into a World-Class 21st Century Airport". NYC DOT.
- ↑ a b "Jennifer Aument Appointed Chief Executive Officer of The New Terminal One at JFK International Airport". Yahoo Finance. 2024-02-26. Retrieved 2024-10-20.
- ↑ a b Golata, Justine (2024-03-19). "Here's What JFK's Largest Terminal To Date Will Look Like". Secret NYC. Retrieved 2024-10-20.
- ↑ "We Keep the Region Moving | Port Authority of New York and New Jersey". www.panynj.gov. Retrieved 2024-10-20.
- ↑ "About Ferrovial - The company's strategy and organizational structure". Ferrovial. Retrieved 2024-10-20.
- ↑ "The New Terminal One at JFK Announces $2.55 billion Green Bond Issuance". Yahoo Finance. 2024-06-27. Retrieved 2024-10-20.
- ↑ "Municipal Securities Rulemaking Board::EMMA". emma.msrb.org. Retrieved 2024-10-20.
- ↑ "Public Transportation Ridership Report, Second Quarter 2024" (PDF). American Public Transportation Association. September, 2024.
{{cite web}}: Check date values in:|date=(help) - ↑ a b c Warerkar, Tanay (2018-10-04). "New looks at JFK Airport's forthcoming $13B overhaul". Curbed NY. Retrieved 2024-10-21.
- ↑ U.S. Department of Transportation (May, 2024). "U.S. International Air Passenger and Freight Statistics" (PDF).
{{cite web}}: Check date values in:|date=(help) - ↑ "GOVERNOR HOCHUL CELEBRATES FINAL PHASE OF THE JFK TRANSFORMATION WITH GROUNDBREAKING FOR A NEW $4.2 BILLION TERMINAL 6". panynj.gov. Retrieved 2024-10-21.
- ↑ "GOVERNOR CUOMO ANNOUNCES PLAN TO BUILD $3.9 BILLION NEW TERMINAL 6 AT JFK INTERNATIONAL AIRPORT TO RESUME, MARKING MAJOR STEP FORWARD IN AIRPORT'S TRANSFORMATION". panynj.gov. Retrieved 2024-10-21.
- ↑ "New York Transportation Development Corporation Special Facilities Revenue Bonds, Series 2024 (John F. Kennedy International Airport New Terminal One Project)" (PDF). June, 2024.
{{cite web}}: Check date values in:|date=(help) - ↑ Lauria-Blum, Julia (2024-07-09). "Transforming a Global Gateway". Metropolitan Airport News. Retrieved 2024-10-21.
- ↑ "AlphaStruxure to Design, Construct, and Operate JFK's New Terminal One Microgrid, With Largest Rooftop Solar Array in NYC and Grid-Independent Operation". AlphaStruxure. Retrieved 2024-10-20.
- ↑ "PORT AUTHORITY AND THE NEW TERMINAL ONE CONSORTIUM KICK OFF CONSTRUCTION OF NEW YORK CITY'S LARGEST SOLAR ARRAY AT JOHN F. KENNEDY INTERNATIONAL AIRPORT". www.panynj.gov. Retrieved 2024-10-20.
- ↑ JFK, The New Terminal One at. "The New Terminal One at JFK Issues RFP for Professional Services Firm for Janitorial, Landscaping Maintenance, and Related Services". www.prnewswire.com. Retrieved 2024-10-20.