$3.9 Billion New Terminal 6 at JFK Airport
The planned construction of a new terminal at John F. Kennedy International Airport is set to move forward.
Gov. Andrew Cuomo announced that the Port Authority of New York and New Jersey has reached a revised agreement on key terms with JFK Millennium Partners – including JetBlue Airways, the operator of JFK International Airport’s Terminal 5 – to build a state-of-the-art new international Terminal 6 that will anchor the north side of the airport. The project was initially supposed to break ground in 2020. The extraordinary level of private investment had been threatened by the impact of the COVID-19 on air travel and future projections for the industry. The restructured deal marks a major step forward in the ambitious plan to transform JFK into a unified 21st-century global gateway and is a testament to the partners’ commitment to the future of the airport and New York.
Subject to Board approval this week, the Port Authority will finalize and enter into a lease agreement with JMP for the construction of the $3.9 billion, 1.2 million square foot new terminal. The full $3.9 billion expense of building the terminal will be privately financed by the JFK Millennium Partners consortium. It will be built on the sites of the former Terminal 6, which was demolished in 2011, and the aging Terminal 7, which will be torn down after British Airways relocates to Terminal 8.
“The transformation of JFK Airport into a world-class gateway is another distinct testament to New York’s comeback and to our determination to build back better,” Governor Cuomo said. “This historic private investment will not only fortify New York’s reputation as our nation’s front door to the world, but also sets an example for how this country can tackle bold infrastructure projects that will jumpstart our economy with thousands of good-paying jobs even amid profound challenges like the pandemic.”
The new terminal will connect to Terminal 5 and be equipped with capacity for ten new gates, as well as bright and airy check-in halls and arrival spaces designed to enhance the customer experience. Customers will enjoy more than 100,000 square feet of commercial dining and retail amenities, lounges, and recreational spaces. The new terminal will also incorporate the latest advances in both sustainability and security, infused with the partners’ renowned customer experience, operational excellence, and a uniquely New York sense of place. Construction of the new terminal is scheduled to begin in mid-2022 and the first new gates are scheduled to open in 2025.
Today’s announcement follows the Governor’s announcement in October 2018 of the Port Authority entering into exclusive negotiations for the development of two major new international terminals, one each on the airport’s north and south sides, that would lead the transformation of JFK and increase the airport’s capacity by at least 15 million passengers a year annually to accommodate projected growth in the decades ahead. The start of these public-private partnerships were delayed and threatened by the COVID-19 pandemic’s severe impact on air travel. Passenger volumes at JFK declined by as high as 98 percent during the height of the pandemic in 2020 and have only recently increased to levels that still remain 25-30 percent down from pre-pandemic figures. The uncertain timing of air travel’s recovery impacts the ability of private investment to cost-effectively finance the project. Today’s announcement reflects a significant vote of confidence by the private sector in the future of JFK Airport and its importance to both New York and the global travel industry. The City of New York’s ten-year emergency extension of the master lease for JFK Airport, which had been set to expire in 2050, was critical to the restructuring of the deal with JMP. That extension provided the flexibility necessary to maintain the significant level of private investment by providing the investors with sufficient time after the new terminal opens to recover their multi-billion-dollar investments.
The financial impact of the COVID-19 is projected to result in a $3 billion revenue loss for the Port Authority over the course of 24 months from March 2020 to March 2022, significantly impacting its ability to proceed with its historic $37 billion capital plan to rebuild, revitalize and maintain critical infrastructure assets across the region in the time originally planned.
This week, the Port Authority Board will be asked to authorize $130 million to build enabling infrastructure for the project, including airside improvements, and utility enhancements such as electrical support for the project, part of the agency’s previously allocated capital to the redevelopment of JFK. Despite the steep financial consequences of the pandemic, the Port Authority’s $130 million contribution to the Terminal 6 project will go forward, pending board approval, given the leverage of nearly $4 billion in private financing to construct the new terminal. The agency’s project-by-project review of its capital plan continues.
The development of Terminal 6 is expected to result in over 4,000 direct jobs and direct payroll wages of $1.9 billion.The total economic activity impact from the project, including indirect effects such as the local market participation of employees of suppliers, amounts to nearly $2.8 billion in total wages and $6.3 billion in total economic activity.
JMP is a private consortium comprised of JetBlue Airways, New York’s Hometown Airline® and the largest carrier operating at JFK; Vantage Airport Group, an industry leading investor, developer and manager of award-winning global airport projects, including as a member of the consortium that built LaGuardia Airport’s new Terminal B; American Triple I (ATI), a 100 percent minority- and woman-owned investor, owner, developer, and manager of infrastructure assets and infrastructure focused companies that seek to spur economic growth and development in markets across the U.S.; and RXR Realty, a leading New York-based real estate operating and development company. ATI’s investment is notable not only in that continues the state’s trend of MWBE firms creating wealth by investing in such a major public-private partnership (beyond the provision of goods and services), but doing so at the 30 percent level, which is both historic and nation-leading.
The passenger facilities at the new Terminal 6 will feature significantly larger waiting areas with high ceilings, natural light and modern architecture coupled with interior green space, exhibits and art featuring iconic New York landmarks and local artists. World-class retail, restaurants and bars will include locally-based restaurateurs, craft beverage options and Taste NY stores. Free, high-speed Wi-Fi and an abundance of charging stations throughout the terminals will enable passengers to stay connected at each step of their journey.
Additional state-of-the-art technology will further improve the customer experience and security in the new terminal and will include elements such as touchless passenger journey, digital passenger flow and queue management, automated TSA security lanes, advanced video search analytics, biometric-based access control systems and a flexible design to accommodate future technology and/or regulatory changes.
Sustainability enhancements will include various carbon emissions reductions through the use of renewable energy technologies such as a solar hot water system, aircraft de-icing and fluid recovery, and electric ground service equipment supporting the transition of its ground service fleet – such as baggage tractors and belt loaders – to electric powered.
The new Terminal 6 will connect to and be seamlessly integrated with the existing T5, including the eventual consolidation of international arrivals facilities, and by consolidating a distinct taxi plaza as well as designate for-hire vehicle pick-up areas with T5. These changes will not only create a world-class experience for the new Terminal 6 passengers but will also substantially reduce traffic congestion on the T5 road frontage.
The Governor’s JFK Vision Plan, initially unveiled in January 2017 and based on the recommendations from the Governor’s Airport Advisory Panel, calls for an overhaul of the airport’s hodgepodge of eight disparate terminal sites into one unified JFK Airport by demolishing old terminals, utilizing vacant space, and modernizing on-airport infrastructure, while incorporating the latest in passenger amenities and technological innovations. The Vision Plan also calls for increasing the number and size of gates, improving parking availability, an array of airside taxiway improvements to allow for more efficient planes and reduced gate congestion, upgrading the AirTrain JFK system to handle increased passenger capacity, and enhanced roadways on and off the airport. This includes better access to JFK from regional roadways, particularly the Van Wyck Expressway and the Grand Central Parkway, including the Kew Gardens Interchange.
Plans for the new Terminal 6 build on the momentum of major components of the airport’s transformation, including the $1.5 billion expansion of Terminal 4, led by Delta and JFK International Air Terminal, which was approved by the Port Authority’s Board in April. Additionally, work began in December 2019 on the $344 million expansion of JFK’s Terminal 8, led by American Airlines, which operates the terminal, and British Airways, which will be relocating to Terminal 8 from Terminal 7, set to be demolished to make way for the new Terminal 6.
Port Authority Executive Director Rick Cotton said, “At the height of the pandemic, when JFK Airport was seeing an unthinkable two percent of its pre-Covid record-breaking passenger volumes, we never lost sight of finding a path forward for this world-class terminal under Gov. Cuomo’s leadership. We thank our dedicated team, our partners, and the City of New York for the extraordinary effort to revive this deal and turn JFK Airport into the modern global gateway that New Yorkers deserve.”
Port Authority Chairman Kevin O’Toole said, “This agreement to build a new Terminal 6 at John F. Kennedy International Airport demonstrates the commitment of the Port Authority of New York & New Jersey and our private partners to deliver for our region through some of the most difficult times in our agency’s 100-year history. Moving forward with a new Terminal 6 will create thousands of good-paying construction jobs critical to our recovery from the pandemic, while building the foundation of economic growth for decades to come.”
JFK Airport is one of the region’s most powerful economic engines, supporting roughly 300,000 jobs that pay $16.2 billion in wages annually while generating $45.7 billion in yearly sales. Prior to the onset of the pandemic, the airport set a record with 62.6 million passengers in 2019.
Redeveloping JFK Airport in Lockstep with the Local Community
In 2018, Governor Cuomo announced the JFK Redevelopment Community Advisory Council. It is co-chaired by U.S. Representative Gregory Meeks and Queens Borough President Donovan Richards and composed of elected officials, community boards, business and nonprofit organizations, civic organizations, and clergy leaders from the targeted local communities of Southeast Queens, Southwest Queens, the Rockaways, and western portions of Nassau County. Since its inception, the Council has been working with the Port Authority to expand community outreach efforts and develop community-focused programs, ensuring that this ambitious project solicits ongoing feedback from local stakeholders and provides meaningful opportunities for local businesses, MWBEs, students, and jobseekers.
This includes programming to advance the Governor’s nation-leading commitment to a 30 percent Minority and Women Owned Business Enterprises (MWBE) contracting goal in all categories of work, and a special focus on opportunities for local businesses across all aspects of the JFK Redevelopment program, including this terminal project, which will be built by union labor under a full project-labor agreement. Other community development initiatives prioritized by the Council focus on job opportunities and workforce development programs for local residents, small business outreach and development, and educational programming for local students.
The JFK Redevelopment Community Information Center opened in Jamaica, Queens in early 2019, providing easier access for firms looking for business opportunities, local residents in search of jobs, or neighbors seeking more information about the project.
Vantage Airport Group Chair & CEO George Casey said, “As lead member of JFK Millennium Partners, Vantage Airport Group is honored to partner with the Port Authority, JetBlue, and all of our JMP partners, to bring another world-class airport terminal to life in the New York metro area for the benefit of travelers and the local community. New York is such a proud and vibrant city, and we look forward to bringing that energy to this international terminal redevelopment project, through intuitive terminal design, best-in-class operations, and exceptional passenger amenities.”
American Triple I CEO & CIO David Cibrian said, “The redevelopment of JFK comes at a critical time as we work to achieve economic recovery from the recent crisis. As a minority owned business, ATI understands the importance of this project to the local and diverse community. Governor Cuomo’s and the Port Authority’s requirement of 30% MWBE participation in all aspects of the project helped make it possible for ATI to be in this partnership. Requiring participation that is reflective of the community it serves has made New York the nation’s gold standard for MWBE utilization, and other states have taken note.”
RXR Realty CEO & Chair Scott Rechler said, “As the greatest city in the world and the world’s capital for attracting talent, New York deserves an international airport befitting of its status. Governor Cuomo set the vision, and with this Board action, the Port Authority will take a major a step forward in turning this vision into reality.”
Robin Hayes, JetBlue Chief Executive Officer said, “Some people call New York the Big Apple. Others call it the center of the universe. At JetBlue, we call it home. Our unique brand and culture have been embraced by millions of New Yorkers for more than two decades, and we remain committed to helping bring this iconic city back from one of the greatest crises it has ever faced. We set out to support the Governor’s vision to modernize JFK into a world-class airport. Terminal 5 has been a huge success, and we are so pleased to have an opportunity to expand our presence with new gates in a new terminal. The team putting this project together is setting out to develop a terminal that New Yorkers can be proud of.”
Queens Borough President Donovan Richards Jr. said, “The reconstruction of our borough’s two airports represent the greatest economic development opportunity in recent Queens history, both in terms of modernizing our aging infrastructure and in terms of creating thousands of good-paying jobs and fruitful contracting opportunities for borough residents and companies. I am thrilled to work with the Port Authority and all our partners on this historic Terminal 6 project to hire as many local residents as possible, activate our extensive Queens network of MWBEs and ensure there is no more community-friendly infrastructure project in the nation than this one. Our borough deserves nothing less.”
NYCEDC President and CEO Rachel Loeb said, “This investment in the future of NYC has been long in the making with the groundwork laid by the JFK lease extensions we completed earlier this year. At a time when the airline industry is coming back from the setbacks of the pandemic, we could not be more thrilled with the commitment to build a new terminal at JFK and secure this important investment in more than just money. It’s a commitment to jobs of the future, a commitment not just by New York City and the State but the private sector as well, clearly illustrating that NYC is open for business.”
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