Malliotakis Irate Over Port Authority’s Failure To Collect $2.7 Million From Neighborhood Group


Port Authority won’t accept repayment, tollpayers continue to suffer

Assemblywoman Nicole Malliotakis (R,C-Brooklyn/Staten Island), a member of the Assembly Committees on Transportation and Corporations, Authorities and Commissions, expressed her frustration with the Port Authority of New York & New Jersey after learning of its most recent transgression involving waste of toll revenue. In 2004, the Port Authority gave $2.7 million to the Greater Jamaica Development Corp., a non-profit neighborhood improvement group, to purchase and develop commercial property. An agreement was made that if the project failed to commence by 2008, the money would be returned to the Port Authority. Four years after that deadline, the only “development” has been the purchase of a dilapidated building that formerly housed a supermarket. Great Jamaica has offered to transfer this property to the Port Authority, as per their agreement, only to be refused. The neighborhood group currently uses the building as an occasional meeting place.

“It’s sad to say, but nothing surprises me from the Port Authority anymore. They hit us with an unreasonable toll increase, and then mislead the public on the reason for that increase. Next, we learn that they’ve lost millions of dollars on investment in non-essential real estate. And now they’re choosing not to collect millions of dollars to which they’re rightfully entitled,” fumed Malliotakis.

This is not the first time that Port Authority dollars directed toward a neighborhood development group have been mishandled. As part of the development of the AirTran rail system, the Port Authority has given at least $2.5 million to the Rockaway Boulevard Local Development Corp. to repair a section of Rockaway Boulevard. The group allegedly used a significant portion of that funding to purchase real estate and pay for street-sweeping. The Port Authority ceased funding the group only after the misallocations were highlighted by the media.

The aforementioned losses are but a paltry sum when compared with the hundreds of millions owed to the Port Authority by tenants at John F. Kennedy Airport. For years, airlines have been underpaying for electricity at the airport due to faulty electrical meters. The losses have been estimated at $16.9 million per year. An audit of the Port Authority’s energy consumption was never completed due to bankruptcy of the firm hired to perform the investigation.

“Who knows how much this could have cost them? If the electrical meters at LaGuardia Airport and the Port Authority Bus Terminal have similar problems, the amount in losses could double,” added Malliotakis. “It has become increasingly clear that the recent toll increases were completely unwarranted and are being used to cover the Port Authority’s own incompetence.”

In the interest of financial stability, Assemblywoman Malliotakis has called on the Port Authority to consider selling off costly real estate holdings. The Port Authority totaled over $77 million in operating expenditures during 2010, $5.2 million of which resulted from losses on real estate property. The agency lost $1.2 million on The Teleport, a sparsely-occupied office park, and $1.4 million on the Essex County Resource Recovery plant, a facility that converts waste into energy.

“It’s truly a shame that, as the Port Authority loses $5.2 million in real estate investment, residents in the surrounding communities must pay the balance through ridiculous toll increases,” said Malliotakis. “These real estate projects are hemorrhaging money and it is the tollpayers who are forced to subsidize them.”

In early October, Assemblywoman Malliotakis filed an amicus brief with Congressman Michael Grimm on behalf of AAA’s lawsuit against the Port Authority, arguing that the recent toll increases are unjust due to their intent to finance reconstruction of the World Trade Center and other non-essential activities.

Last month, Assemblywoman Malliotakis wrote to Assemblyman James Brennan (D-Brooklyn), Chairman of the Assembly Committee on Corporations, Authorities, and Commissions, urging him to conduct a public hearing to investigate how the Port Authority has spent the public’s money.


Sign in or become a Bklyner member to join the conversation.