Plan to Build $3.9 Billion New Terminal 6 at JFK International Airport to Resume
Governor Andrew M. Cuomo today 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 John F. Kennedy 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.
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.
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.
