A $4 billion redevelopment of New York City's LaGuardia Airport was cleared for takeoff Wednesday with financing lined up and a 34-year lease signed to support what is being touted as one of the largest public-private partnership transportation projects in U.S. history.
The Port Authority of New York and New Jersey and its developer, LaGuardia Gateway Partners, announced that financing has been achieved for the major overhaul with "substantial" completion" slated for 2022. Conduit issuer New York Transportation Development Corp. sold $2.4 billion in special facilities bonds on May 17 for the project, which includes plans for a new 35-gate Terminal B, central hall and a connecting concourse.
New York. Gov. Andrew Cuomo said the enthusiasm for the project was evidenced by the bonds being nearly 10 times oversubscribed on average. The bonds are backed by airline and concession revenues over the lease period.
"LaGuardia is an essential gateway to our state for millions of residents and visitors," said Cuomo in a statement. "By transforming it into a world-class airport, we are creating a stronger economy with 21st century infrastructure that represents the very best of New York."
Citi, Wells Fargo and Barclays were lead managers for the sale, which included $2.26 billion in tax-exempt bonds and $150 million in taxable securities. Ramirez & Co and Siebert Brandford Shank & Co. LLC worked as co-managers on the deal. The bond counsel firms were Squire Patton Boggs and D. Seaton & Associates.
Dentons US LLP and the Law Offices of Joseph C. Reid were co-disclosure counsel on the transaction. Bank of New York Mellon was the trustee and collateral agent.
Assured Guaranty Municipal wrapped $412 million of the bonds, or roughly 18% of the transaction, insuring the 2035-2037 and 2051 maturities.
The LaGuardia overhaul marks the second major P3 project entered into by the Port Authority in less than three years. The agency also entered into a P3 with NYNK Link in 2013 for a $1.5 billion replacement of the Goethals Bridge connecting Staten Island and New Jersey.
"Today's contractual closing of the public-private partnership and the imminent commencement of construction represent a huge step forward in Governor Cuomo and the Port Authority's vision to modernize LaGuardia Airport," said Port Authority Executive Director Pat Foye in a statement. "The new Terminal B will be a 21st Century facility offering a high level of customer service and amenities."
