Port Authority leased air rights for $500 million to fund major improvements. On November 30, 2007, the Port Authority announced an agreement to facilitate construction of a 40-story, 1.3 million-square-foot office tower above the north wing of the 42nd Street Bus Terminal. Under the agreement, the Port Authority would lease the air rights over the area to 20X Square Associates, a joint venture between Vornado Realty and Ruben Companies. The agency will also share in the net income from the development. The agreement is worth $500 million and has a term of 99 years.

The funds generated from the transaction will finance major improvements at the nearly 60-year-old bus terminal, including 60,000 sq.ft. of new retail, new escalators, and a new modern interior. In addition, the Port Authority plans to create 18 new bus gates and upgrade existing gates, enabling the terminal to accommodate an additional 70 buses and 3,000 passengers during peak hours, an increase of 18 percent. The agency also announced that it will build a new bus parking garage located close to the terminal to reduce traffic congestion and noise in the area. (more…)