November 16, 2017
Albany, NY

Governor Cuomo Announces First Phase of Modernization of Air Cargo Operations at JFK

TOP Governor Cuomo Announces First Phase of...

Port Authority Board of Commissioners Approves Lease Deal with Aero JFK II LLC for New, State-of-the-Art 346,000 Square-Foot Cargo Facility

$132 Million Investment Represents Key First Step of Comprehensive Vision Plan for JFK - Follows Airport Advisory Panel Recommendation to Enhance JFK's Position in International Air Cargo Market

JFK Cargo Industry Supports 50,000 Total Jobs, $8.6 Billion in Sales, and Almost $3 Billion in Wages

Project Includes $70 Million Investment in New Cargo Facility plus $62.2 Million Upgrade to Two Taxiways to Allow Larger Cargo Planes to Access North Side Warehouses

Projects Support Goal of 30 Percent MWBE Participation

WYSIWYG

Governor Andrew M. Cuomo today announced a long-term lease between the Port Authority of New York and New Jersey and Aero JFK II, LLC for a 21st century, state-of-the-art 346,000 square-foot cargo handling facility at John F. Kennedy International Airport. The $132 million combined investment in the facility and taxiway upgrades represent the first phase of the modernization of air cargo operations at JFK, fulfilling a major recommendation of the Governor's Aviation Advisory Panel to enhance the airport's position in the international air cargo market, and is a key first step in the ambitious plan to transform and modernize JFK into a world-class airport. The JFK cargo industry currently supports 50,000 jobs, $8.6 billion in sales and almost $3 billion in wages, and these investments will help grow the industry and create additional jobs. Agreements associated with this project will include the goal of reaching a combined participation rate of 30 percent Minority- and Women-Owned Business Enterprises or MWBE.

"We are transforming JFK into a world-class, state-of-the art airport and -- with this new cargo facility -- a major economic engine," Governor Cuomo said. "With this much-needed modernization of JFK's cargo operations, we will help create jobs and support economic growth across the entire New York metropolitan area for years to come."

In addition to approving the $70 million investment for the new cargo warehouse, the Port Authority Board also approved a $62.2 million project to rehabilitate and enhance Taxiways CA and CB, which were last rehabilitated in the 1980s and designed for fleets of aircraft that predate today's modern and larger cargo planes. The runway rehabilitation of Taxiways CA and CB includes the realignment of portions of both taxiways to allow the industry's largest cargo planes to access the airport's north cargo area, along with electrical and drainage improvements and upgrades of crossing taxiway areas.

The Vision Plan recommendations for enhancing cargo operations call for consolidation, upgrading and expansion of cargo facilities onto the airport's north side, reducing transfer times, positioning cargo operations where there is convenient, efficient road access to off-airport cargo operations, and phasing out existing obsolete and underused warehouses. More than half of JFK's cargo buildings are more than 40 years old, and do not meet current industry standards, including the two that will be demolished on the site of the proposed new facility.

Port Authority Executive Director Rick Cotton said, "John F. Kennedy International Airport long has been one of the nation's most important destinations, not only for passengers, but also for the movement of air cargo and we are taking concrete action to ensure that remains the case throughout the 21st century. The Governor's Vision Plan for JFK recognizes that cargo commerce at our airports is vital to the region's needs for goods and services, as well as a critical component in creating jobs and boosting the economy. Today's authorization is an important first step to transforming JFK's cargo facilities into a best-in-class 21st Century operation as well as our broader ambitions to transform JFK."

Erin Gruver, Aeroterm's Chief Development Officer, said, "This project serves as a critical first step in revitalizing JFK's air cargo sector. We are privileged to be entrusted by the Governor and the Port Authority to fund and develop such an essential piece of JFK's future. We look forward to delivering this state-of-the-art and high profile project to Worldwide Flight Services who, along with their airline partners will occupy and operate long term in the facility. Adding this new project to our existing facilities at JFK brings our total investment in the airport to more than $200 million highlighting the value we place on JFK and New York."

The Port Authority board approved a new lease agreement with Aero JFK II for the development of the new state-of-the-art cargo handling facility at the site of Buildings 260/261, a parcel exceeding 26 acres. The existing buildings are more than 40 years old and are vacant given their inability to handle today's modern cargo shipments.

Terms of the 33-year-lease, which has a 15-year renewal option, call for $117 million in rental fees to the Port Authority from Aero JFK II, with the company committing to make an investment of at least $70 million for design and construction costs of the new facility. Additionally, the company will be responsible for demolition of the existing buildings and removal of the debris, with the Port Authority reimbursing up to $24 million of those costs.

JFK handled roughly 1.3 million tons of cargo last year, putting the airport in the top seven airports nationwide. The cargo industry at JFK directly employs over 15,000 people and supports 50,000 total jobs, $8.6 billion in sales, and almost $3 billion in wages. In the area of Queens directly adjacent to JFK, transportation and warehousing jobs account for over one in every ten jobs, four times higher than the citywide average. 

Despite the poor current state of JFK's air cargo infrastructure, the airport remains a leading international air cargo center, with the backdrop of a strong and growing air cargo industry.  Air cargo numbers at Kennedy are up 6.7 percent in the first half of 2017 compared to the first six months of 2016.  JFK's international air cargo - which represents more than three-quarters of the airport's total - jumped 8 percent in the year's first six months, compared with the same period a year earlier, while domestic freight increased about 1 percent.

Aeroterm, the manager of Aero JFK II, LLC, specializes in the development and management of airport-related cargo and real estate facilities, with the largest portfolio of on-airport properties in North America. 

The new state-of-the-art facility will be home at JFK to Worldwide Flight Services- a major third party ground handler that operates around the world. The facility will have the flexibility to handle three of the largest air cargo freighters ('Group VI") at one time, and feature elevated traversing vehicles designed for maximum efficiency in the handling and storage of cargo, plus a dedicated, temperature-controlled pharmaceutical handling area.

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