MANILA: The port authority should unload and sell two cash-losing Brooklyn marine terminals to ceil deficits to $107 million in 2029.
Selling the Red Hook Container Terminal and the Brooklyn-Port Authority Marine Terminal to a housing developer in the gentrifying borough would generate cash to help stem the losses, according to a report released today by the Citizens Budget Commission. The Port Authority should also support efforts by shippers to negotiate cuts to the number of longshoremen who load and unload ships and royalties they pay to their union, according to the business-backed watchdog group.
“The Port Authority’s maritime facilities have a long history of running deficits and no prospect of making money in the near future,” Carol Kellerman, president of the CBC, said in a statement. “Greater efficiencies must, therefore, be explored.”
The operations of the 94-year-old Port Authority of New York & New Jersey have come under increasing scrutiny since allies of New Jersey Governor Chris Christie, a Republican, closed lanes at the George Washington Bridge in 2013, causing four days of gridlock in a town whose Democratic mayor hadn’t endorsed the governor for re-election.
Last month, Christie and New York Governor Andrew Cuomo vetoed legislation passed unanimously in both their legislatures that would have brought greater public accountability and transparency to an agency marked by patronage and secrecy, according to lawmakers.
Instead Christie and Cuomo, a New York Democrat, accepted management changes recommended by a special panel they created to reorganize the agency. The panel also reviewed the ports and some of the agency’s other major assets.
The Port Authority’s bridges, tunnels and airports, which generated more than $1 billion in operating income, subsidize money-losing operations like commuter rail, which lost almost $320 million last year, and a bus terminal in Manhattan. The special panel’s report also suggested redeveloping or selling underperforming assets such as Red Hook.
While known mostly for its airports and Times Square bus terminal, the Port Authority runs the busiest port on the East Coast. More than 3 million containers are unloaded at its six terminals each year, serving 23 million consumers.
The Port Authority has spent more than $2.7 billion over the past 11 years to deepen channels, build intermodal rail facilities and widen roads around the terminals.
It’s investing another $1.3 billion to raise the Bayonne Bridge Bridge 60 feet (18.3 meters) so that bigger ships coming through the a widened Panama Canal can pass under the span, which connects the New Jersey city to New York’s Staten Island.
New York’s ports face stiff competition from facilities in Savannah, Georgia and Charleston, South Carolina. In 2013, the New York ports lost about $80 million from operations, interest and other expenses, less than 2 percent of the agency’s total revenue.
Building housing at the ports in Brooklyn, where the median sale price of condominiums, co-ops and single-family homes climbed to a record of almost $590,000 last year, may be a better use for the Brooklyn-Port Authority Marine Terminal in Cobble Hill and the Red Hook Container Terminal, the CBC said.
The Brooklyn facilities lost $205,718 and $184,788 per acre, respectively, and closing them would yield $29 million in annual savings by 2029, according to the CBC report. They account for less than 9 percent of the Port Authority’s cargo volume, the agency’s financial statements show.
