New York already has some limited but important and relevant experience with PPPs. Three projects are among the largest in the United States. The largest New York PPP is the $1.8 billion contract to build the Airtrain from John F. Kennedy International Airport (JFK) to the Jamaica Station of the Long Island Railroad. This project was funded by revenues accumulated from a $3 passenger facility fee on outbound tickets and tax-exempt debt of the Port-Authority of New York and New Jersey. The agreement was for five years with two optional five-year extensions, one of which has already been authorized.
Another large project is JFK Terminal Four (T4). In 1997, the Port Authority of New York and New Jersey entered into a 20-year partnership with a consortium to rebuild and operate T4, the old international arrivals building. The total cost of rebuilding T4 was $1.4 billion, and it was financed mostly by tax-exempt revenue bonds issued by the Port Authority and backed by the revenue to be generated by the terminal's operations.
Another large PPP of note is New York City's 20-year partnership with Cemusa, Inc. for the design, construction and maintenance of street furniture. Specifically, the agreement called for Cemusa to replace all of New York's City's 3,200 bus shelters and 300 newsstands, to add 300 new bus shelters and an unlimited number of newsstands, and to install 37 bike parking structures and 20 new public toilets. Cemusa was granted the right to sell advertising space on these street fixtures; in return, it will provide New York City with $999 million - to be paid yearly for the life of the agreement - for those rights, as well as $399 million of in-kind services, mostly advertising space promoting New York City as a tourist destination on Cemusa facilities located around the world.
There are also a range of experiences with smaller PPPs throughout New York State. These are mostly contracts to design, build, finance and operate waste-to-energy, materials recovery and composting plants in different counties throughout the State. Many of these projects are under $100 million, but the larger ones include 20-year, $900 million partnerships for waste-to-energy plants in Babylon and Hempstead.
These projects demonstrate that there is precedent for PPPs for a variety of assets across New York State. Interestingly, these partnerships have not been pioneered by State government, but by the Port Authority and local governments; however, Governor David Paterson has formed a commission to study PPPs and examine where they may benefit New York. Looking ahead, the State should evaluate the variety of local experiences in developing a statewide framework for pursuing or encouraging PPPs.
It should be noted that the PPP experience in New York has evolved despite many statutory limitations. State and local procurement is restricted by the "Wicks Law," which requires multiple subcontractors for most construction projects, and other provisions that prohibit design-build and PPP arrangements for a wide range of projects. The solid waste facilities were developed under a specific law allowing localities to contract for these facilities and/or services with PPP-like terms. Expansion of PPPs would require significant changes in State law relating to public procurement procedures.