An overhaul of LaGuardia Airport moved closer to taking flight after the Port Authority of New York and New Jersey Board of Commissioners voted to approve a public-private partnership for the $4 billion project. The deal cleared the way for a private consortium to design, build, finance, operate, and maintain a replacement for the airport's aging Central Terminal B, one of the most closely watched infrastructure finance arrangements in the country.
What the deal covered
The redevelopment was carried out by LaGuardia Gateway Partners, a consortium of Skanska, Vantage Airport Group, and Meridiam. The group reached financial close in 2016 and took over operations of the old terminal while building a new 35-gate terminal, a connecting Central Hall, a 3,100-space parking garage, eight miles of roadway, and 21 new bridges, substantially completed in 2022.
The agreement ran through a lease extending to 2050. The consortium took on responsibility for financing, operating, and maintaining the facility for decades, collecting revenue from sources like retail concessions and airline lease payments.
How a P3 differs from traditional bond financing
In a conventional municipal financing, a public agency issues bonds backed by its own credit, hires contractors to build the project, and retains ownership and operating responsibility. A public-private partnership shifts much of that risk to a private consortium, which typically raises its own capital through project bonds, bank debt, and equity, repaid over the life of a long-term contract.
Roughly $2.5 billion of the LaGuardia project's capital came from project bonds, another $1.5 billion from the Port Authority itself, and about $200 million in equity split among the consortium's partners.
Why the deal mattered nationally
At $4 billion, the Terminal B partnership was described at the time as one of the largest public-private partnerships in U.S. history and the largest ever undertaken at a U.S. airport. It became a reference point for governments and infrastructure investors evaluating whether P3 structures could work for large domestic transportation projects, an approach long more common in Europe, Canada, and Australia.