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COVID19: After record 2019, Port Authority of New York & New Jersey needs a loan

FILE PHOTO: CMA CGM Theodore Roosevelt passing under the newly raised Bayonne Bridge

PortandTerminal.com, May 28, 2020

The Port Authority is scrambling to plug a $3 billion revenue gap from the coronavirus outbreak. Looks to borrow from Federal Reserve program.

NEW YORK – The Port Authority of New York and New Jersey (PANYNJ) is looking to borrow money under a federal lending program as the COVID-19 pandemic wipes out a $3 billion chunk of its revenue.

On Thursday its board of commissioners authorized PANYNJ management to apply for support from the Municipal Liquidity Facility, a new program created under the CARES Act.

COVID19 crushes winning streak

Container Terminal. Ship. Container. City skyline
In 2019 PANYNJ surpassed the Port of Long Beach to become America’s second largest container port. PHOTO: MARK LENNIHAN / AP

Cargo shipments in and out of the agency’s seaports dropped 22 percent, Port Authority Executive Director Rick Cotton said, as the pandemic and ensuing recession indefinitely disrupt long-standing global trade routes. Cotton himself successfully battled the coronavirus after becoming infected with it in March.

These steep drops in cargo volume come after what was a record year for the port authority in 2019 and saw it surpass the Port of Long Beach to become the second-largest container port in America.

That’s all changed now.

Passenger and vehicular traffic declines in 2020 are even worse than the cargo declines.

Airport traffic dropped 97 percent, rail ridership at the PATH commuter line dropped 95 percent and tunnel traffic – including the Holland and Lincoln tunnels – fell 40 percent, PANYNJ said in its Thursday morning statement.

“During this period our operating volumes have plunged to levels we have not seen before,” Port Authority Executive Director Rick Cotton said at the agency’s live-stream meeting in April.

All this spells out a $3 billion hole in revenue over the next two years, out of the agency’s $8.3 billion budget.

Under the Federal Reserve lending program, the Port Authority would sell bonds to the U.S. central bank to shore up finances and provide the cash-strapped agency with immediate funding.

“In the face of an estimated $3 billion in revenue losses, the Port Authority is exploring every option,” Port Authority Board Chair Kevin O’Toole, said in a Thursday statement.

O’Toole said that a short-term loan from the Municipal Liquidity Facility would provide immediate liquidity relief. But direct funds through the next aid package are needed to help the agency – and region – recover from the effects of the coronavirus outbreak.

“Federal assistance is key to moving this region out of crisis and into recovery,” O’Toole said. “We look forward to doing our part to spur economic recovery and job growth while building the critical infrastructure New Jersey, New York and this nation deserve.”

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