Latimer Administration, Legislators Reviewing Privatization Deals

John Jordan | March 2018

Westchester County Executive George Latimer

TARRYTOWN—While not saying that he intends to scrap any of the public-private partnerships between the county and vendors for the management of Rye Playland and Westchester County Airport, Westchester County Executive George Latimer told a business group gathering recently that both deals are being reviewed by his administration.

Latimer, in a speech before trades groups the Construction Industry Council of Westchester & Hudson Valley, Inc. and the Building Contractors Association of Westchester & Mid-Hudson, Inc. on March 26, said his administration is reviewing the existing contract with Standard Amusements to manage and operate Rye Playland amusement park. The Westchester County Board of Legislators approved the controversial P3 deal with Standard Amusements, which was negotiated by then Westchester County Executive Robert Astorino, in May 2016.

It is also reviewing a proposed contract with Macquarie Infrastructure Corporation to operate Westchester County Airport as part of a $1.1-billion public-private partnership. The deal was negotiated and approved by the former Astorino administration in November 2017. Macquarie was the unanimous choice of a bi-partisan task force made up of members of the Astorino administration and the Board of Legislators that evaluated three proposals received in April 2017 to manage, operate, maintain and improve the airport. However, the airport privatization deal was never ratified by the Westchester County Board of Legislators.

Latimer at the session at the Westchester Marriott said the deal with Standard Amusements at Rye Playland is being reviewed by his administration to determine “does the deal benefit the public side as well as the private side?” He said a deadline for recommendations from staff was set for April 13. Latimer added that the report will then be reviewed by the administration for about a week before it is released to the public.

“There will probably be a discussion in the Board of Legislators about it,” Latimer told the gathering. He noted that there is a signed contract in place. “Obviously that signed deal has to be honored by both sides and if anything comes out of that discussion we will share it with the public and the press and we will have a debate over it,” he noted.

Latimer, a resident of Rye, added, “The biggest reality of Playland is that we are dealing with a facility that has a great tradition, but it also has a great fiscal obligation for capital improvement over time.” Director of Operations Joan McDonald and County Attorney John Nonna are conducting the administration’s study of the Playland contract.

He said that Playland’s annual revenues are mixed and its profitability depends largely on weather conditions during its operation. Latimer promised that his administration “will take a neutral look” at the contract with Standard Amusements and release its report in the near future.

Earlier this month, County Legislator and Majority Leader Catherine Parker announced that the Board of Legislators is undertaking its own review of the Playland contract with Standard Amusements. The Board’s review of the contract will be undertaken by Budget and Appropriations; Law and Major Contracts; Parks, Planning and Economic Development; and Public Works committees.

“Given the stated county obligation of tens of millions of dollars for capital improvements in the contract, that we know is significantly higher, the mechanism to recoup those investments is not in the agreement,” said Parker, who has called for the termination of the contract with Standard Amusements. “The goal to unburden the public was negotiated away under the last administration, with substantive changes since the BOL vote in 2016. I look forward to hearing what the new administration has learned related to the management of Playland since taking office.”

In terms of the proposed Westchester County Airport, Latimer noted that the airport is currently operating under a public-private partnership with AVPORTS Management LLC. Latimer, who campaigned against the airport privatization deal, said the crux of the new deal is to allow the county to tap airport revenues that at present must be spent solely on airport operations and improvements.

He stressed that the airport is as an economic engine and must serve both commercial air travelers as well as provide general aviation services for corporations in the area.

“As we work through what the future governance of the airport is, the one thing we are going to ensure is that the services that are there will be done in an environment that will be maintained and upgraded so that we know that it will be the selling tool (for business) that it is,” Latimer said.

Unlike the Playland contract, the County Executive did not give a timeline on a decision on how and if a new privatization arrangement will be undertaken.

The County Executive also said there are discussions with Fareri Associates of Greenwich, CT on the 99-year lease of 60 vacant acres of county-owned land at the Grasslands campus in Valhalla on a proposed $1.2-billion Westchester Bioscience & Technology center project. The contract was approved by the Westchester County Board of Legislators in April 2017. The project is now in the approval process with the Town of Mount Pleasant.

He said the county has learned that Fareri is considering some changes to the plan that was approved by the county and that the county would hold talks with Fareri once those changes are finalized and shared with the county.

Latimer Tackles Long Island Sound Tunnel

Funding for a study on a possible Long Island Sound tunnel crossing was part Gov. Andrew Cuomo’s 2018 State of the State address in January. The New York State Department of Transportation released a Request for Expressions of Interest on Jan.25 with responses due no later than April 2.

County Executive Latimer said the tunnel concept is not a popular proposal in the Sound Shore communities of Westchester.

“I think the biggest question about the tunnel is not what I think or what anybody else thinks, it is the estimate of how much money it is going to cost,” he said. “If the new (Mario M. Cuomo) bridge is estimated to be about a $4-billion to $5-billion project, then the tunnel has been estimated as high as $30 billion.”

Latimer also questioned with that high cost, what the toll crossing would have to be to pay for the tunnel?

He also noted that at present while the new span replacing the Tappan Zee Bridge will basically use almost the same connections on either side of the Hudson River to I-87, the Long Island Sound tunnel crossing would not have existing connections to major roadways, thus requiring significant capital cost to create those necessary connections.

The RFEI release followed a NYSDOT commissioned Long Island Sound Feasibility Study authored by WSP Advisory Services that studied three possible crossings. The Western Alignment would have a crossing from Oyster Bay to the Rye/Port Chester area; the Central Alignment would involve a crossing from Kings Park to Bridgeport and Devon, CT and an Eastern Alignment would be a crossing from Wading River to New Haven and Branford, CT.

The study covered the feasibility, possible environmental impacts and costs involved with tunnel, bridge, and tunnel and bridge combination crossing for all three alignment options. The RFEI is seeking input from the private sector for a Western Alignment tunnel crossing only that would connect the Long Island Expressway with I-95 in Westchester.

The study calculated that a tunnel from Oyster Bay to Rye/Port Chester consisting of one tube with two lanes in each direction would cost $31.50 billion. That cost estimate includes $20.37 billion for construction costs, $3.86 billion in soft costs and $7.27 billion for contingency. If the tunnel would involve two tubes with three lanes in each direction, the project estimate balloons to $55.43 billion.

Latimer concluded his thoughts on the proposed Long Island Sound tunnel by saying, “At this stage of the game it is very hard to image how New York State is going to find a $30-billion price tag workable.”

 

 

 

 

John Jordan
Editor, Real Estate In-Depth