During my days as a beat reporter, I remember writing about a mixed-use, transit-village project that was being developed by two adjacent towns in central New Jersey. Both municipalities had their own developer, their own design concept and their own separate visions for the station. One town wanted some 500 units of workforce housing, office and retail, while the other pictured a significantly scaled-down version of that. Ultimately, the differences led to litigation and ultimately, no shovel in the ground.
I was reminded of that situation last month when Governor Andrew Cuomo delivered his “State of the State” address. Much attention was given (and rightfully so) to our governor’s bold proposal to overhaul the Javits Center and create a state-of-the-art facility and hotel in Southeast Queens. But at the same time, a crucial piece of legislation—one that slipped underneath everyone’s noses—was passed during the state legislature’s special session that will affect not only city construction projects, but New York State as a whole.
In a bipartisan effort, the legislature passed design-build legislation, a bill that helps streamline the approvals process and helps get projects done faster. It is a concept embraced by 46 other states—and now New York is finally on the bandwagon.
“It is one of the most unheralded but most significant developments of the special session,” Patrick Foye, the new executive director of the Port Authority of New York & New Jersey, told reporters on Monday afternoon at the New York Building Congress annual meeting. “It makes the state join the other 46 states that had design-build.”
According to the Design-Build Institute of America, an industry group that represents architects, engineers and commercial property owners, design-build is a method in which one entity works under a single contract with the project owner to provide design and construction services all under one roof from planning to completion. Through the DBIA’s model of “single-source responsibility,” commercial real estate projects are less susceptible to delays, red-tape and conflicts.
Under the new law, the state’s Department of Transportation, Thruway Authority, Office of Parks, Recreation and Historic Preservation, Department of Environmental Conservation, and the Bridge Authority will use design-build project delivery for the first time. That means one contract for big projects; no separate entities, no separate contractors, no separate work. It’s a one-stop shop.
One place the new legislation could make a difference in is the public-private partnership approach, or PPP. While PPPs don’t fit every project or every asset the same, but where it does, and agencies like the DOT can take of advantage of it when it comes to large-scale infrastructure projects in ways that weren’t possible before. It can also result in tremendous cost-savings for governing bodies that are strapped for cash and personnel in an era of scarce resources.
Take the example of the Goethals Bridge, which connects Elizabeth, NJ and Staten Island, NY. The Port Authority is obtaining proposals from three pre-qualified developers to design, build, finance and maintain the bridge under a PPP model. When the Goethals overhaul begins in 2013, about 2,500 construction jobs will be created.
To be clear, the port is not privatizing it. The agency will continue to operate and control the bridge, while a separate development team will design, build and maintain the bridge for 35 years in exchange for fixed payments from the Port. This approach will lower costs and transfer risk to the developer and speed delivery of the project. And it's exactly what we need to stay competitive on a global scale.
This all falls under Cuomo’s NY Works Initiative, a $700-million program that will access capital from the private sector, pension funds and state sources for infrastructure improvements for Port Authority and MTA capital projects. With this bill, I believe that getting projects done, creating jobs and accelerating economic development is something that both Democrats and Republicans can get behind.
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