Rechler wonders: Maybe the dysfunctional Port Authority should be dismantled?

RXR CEO also questioned Trump’s infrastructure plan

TRD New York /
Feb.February 09, 2017 01:25 PM

Scott Rechler (Credit: STUDIO SCRIVO)

The idea of breaking up the Port Authority of New York and New Jersey is almost as old as the bi-state agency itself. On Thursday, the idea got a new boost from Scott Rechler, CEO of RXR Realty and until recently the Port Authority’s vice chair.

“Maybe in reality it’s impossible to keep it from being attacked by politics,” he said at the Anchin Construction & Development Forum, adding that it may be time to ask, “Should we break it up?”

Rechler didn’t exactly back a breakup, he just floated it as one possible solution to the agency’s travails, along with appointing an independent CEO and revamping its management structure.

According to Rechler, a key flaw of the agency’s structure is that each governor can blame its failures on someone else, making it easier to tolerate inefficiencies. Breaking it up would solve that incentive problem. “The advantage is that each governor in each state is accountable for the success of their assets,” he said.

Rechler has said in the past that a breakup “should be considered” but also cautioned against doing it too abruptly. A Cuomo appointee, he joined the Port Authority in 2011 and announced his departure in late April.

At a panel in September, Rechler joked with the crowd that when he was appointed in 2011, Gov. Andrew Cuomo “didn’t really explain to me the Port Authority was some sort of combination of Boardwalk Empire and Scandal in terms of what goes on there.”

The agency has long been plagued by infighting between appointees from New York and New Jersey, stalling important projects. Most recently, the two states quarreled over a new $10 Billion Bus Terminal On 42nd Street in Manhattan.

Rechler also questioned the Trump administration’s plan to spur infrastructure investment, suggesting that it should shift the focus of planned subsidies. Trump’s current plan calls for tax subsidies to companies that build tunnels or bridges in public-private partnerships. Rechler argued that up-front gifts to firms that offset much of their investment don’t create enough of an incentive to finish projects on time and on budget.

“You want (investors) to say ‘I’m going to lose money unless I’m’ successful,” Rechler said. “So you really want the tax credits focused on the debt market, like the Build America bonds.”


Related Articles

arrow_forward_ios
The Thurgood Marshall Courthouse in Lower Manhattan (Credit: iStock)

Housing court could get a lot more political under reform plan

WeWork employees speak up to management, NY condo buyers can stay anonymous after all

WeWork employees speak up to management, NY condo buyers can stay anonymous after all

Airbnb lost by a landslide in Jersey City. What went wrong?

Airbnb lost by a landslide in Jersey City. What went wrong?

Airbnb CEO Brian Chesky and Jersey City Mayor Steve Fulop (Credit: Twitter, iStock, Airbnb)

Stakes are high as Jersey City residents vote on Airbnb

620 Sixth Avenue and RXR Realty's Scott Rechler (Credit: Getty Images, RXR Realty)

RXR gets $400M+ from Goldman Sachs to refi Sixth Avenue building

Alexandria Ocasio-Cortez, Bernie Sanders and Elizabeth Warren

By the numbers: Breaking down national housing agendas from the far left

The architect claims the design, construction and marketing of the tower rips off the design of a tower he planned and modeled for his thesis

Lawsuit over WTC design is whittled down

Nuveen CEO Vijay Advani, Blackstone President & COO Jonathan Gray and one of the Texas properties

Blackstone just sold off a 29M sf national industrial portfolio

arrow_forward_ios