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MEMORANDUM 

Law Department 

PR/VILEDGED AND CONFIDENTIAL 

To: 

From: 

Data: 

Subject: 

Copy To: 

Christopher Hartwyk 

Carlene Mcintyre 

March 28, 20·11 

NJDOT Projects 

J. Introduction 

New Jersey Departrrierit of Transportation ("NJDOT") l1as requested the Port 

Authority's help in funding transportation projects that NJDOT must perj'orm In the 

State of New Jersey. The Port Authority has reviewed three specific projects, namely 

tile Pulaski Skyway, Wittpenn Bridge and New Road (collectively, the "Projects"), 

which the Port Authority believes it can undertake as a Port Authority facility project. 

As we have previously advised, in order to receive Port Authority funding, 

projects are required to fall within the scope of the Port Authority's statutory authority 

and comply with the contractual requirements· under which the Port Authority 

operates. As a matter of certainty, projects that fall outside· the scope of the Port 

Authority's mandat<;l would be ultra vires, and c'annot, therefore, be undertaken. by the 

. _Port_ ,1\Utllo~ity ('lS ajJ_ort A1Jjhori!}'_fJ.rojec_t_()r fl]ll_decj_})y .t.h~. Pg_rt. A_uthor~y, __ i!l. 

partnership with another governmental agency, even if to do so would support, in a 

general sense, the goals underlying the Port ALithority's creation. 

II. Auti:Jority to Undertake the Projects Identified by NJDOT 

A. Holland Tunnel and Marine Terminals 

The Port Authority recognizes that it is in the best interest of the Port District to .. 

alleviate the New Jersey infrastructure issues within the Port District and it is desirous 

of aiding in that effort. In this regard, the Port Authority has reviewed its bi-state 

legislation to determine whether any legislative authority exists that would allow it to 

undertake the Projects. The Projects serve as a lcey component in the NJDOT 

"Partway Corridor," allowing traffic to gain access to the Holland Tunnel. In 1931, the 

"control, operation, tolls and other revenues of the ... the Holland tunnel" was vested 

in the Port Authority under bi-state bridge and tunnel legislation unifying the 

operations of trans-Hudson vehicular crossings in the agency. N.J.S.A. 32:1-119; 

N.Y. Unconsol. Laws 6502. However, although the Projects are being designed, in 
part, to improve access to the Holland Tunnel, the Port Authority has no authority in 

such unification statutes to construct, own, maintain or operate any of the 

approaches to the Holland Tunnel. In stark contrast are other provisions of the bistate statutes that give the Port Authority express rights to construct approaches with 

respect to the Midtown Hudson Tunnel (Lincoln Tunnel) and the George Washington 

Bridge (GWB). 

The GWB legislation after setting forth the parameters of the approaches to 

the GVVB on the New York side, states: 

"Except as so limited, the Port Authority may effectuate such 

approaches, connections, highway extensions or highway 

improvements as it shall deem necessary or desirable in relation to the 

George Washington Bridge, located in or extending across the counties 

in which such bridge is located, and in its discretion, may do so by 

agreement with any other public agency; such agreement may provide 

for the .construction, .ownership, maintenance. or. operation ·Of .such 

approaches, connections or highway extensions · or highway 

improvements by such other public agency. " 

N.J.S.A..32:1-119; N.Y. Unconsol. Laws 6502. 

Leaving aside, for now, whether the Projects could be appropriately 

categorized as an approach, connection or highway extension or improvement to the 

Holland Tunnel, as stated above, there Is no similar authorization with respect to the 

Holland Tunnel as was set forth for the GWB. Of particular note is the fact that the 

GWB provision cited above, expressly provides that such approaches may be 

undertaken by agreement with other public agencies that may also construct, own, 

.... maintain such approaches .... Also of. note is the language in the same paragraph 

granting authority to operate the Holland Tunnel that gives the Port Authority the 

authority to construct and operate the Lincoln Tunnel. Similar to the GWB legislation, 

the Lincoln Tunnel statutory language provides that "the Port Authority is hereby 

authorized and empowered to construct, own, maintain and operate the [Lincoln 

Tunnel] together with such approaches thereto and connections with highways as the 

Port Authority may deem necessary or desirable." N.J.SA 32-1-119; N.Y. Unconsol. 

Laws 6502. Therefore, there is no clear statuiory authority under the Holland Tunnel 

legislation to perform the Projects as approaches to the Holland Tunnel. 

Moreover, although the Projects will clearly have a positive impact on ingress 

and egress to Port Newark and Port Elizabeth, the airport and marine terminal 

legislation expressly prohibits the construction of highways by the Port Authority 

without legislative approval. Specifically, N.J.SA 32-35.30 provides that "[m]arine 

terminals shall mean .... highway projects in the vicinity of a marine terminal 

providing improved access to such marine terminal as shall be designated in 

legislation adopted by the two states." This statute was the result of a "friendly" suit. 

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brought by the New Jersey Department of Transportation and the New Jersey 

Turnpike Authority against the Port Authority seeking a declaratory judgment as to 

whether the Port Authority had the authority to commit funds to the Route 81 project 

for construction of the Turnpike Interchange 13A and a new highway connection with 

North Avenue and Routes 1 and 9 in Elizabeth, New Jersey. The Court found that 

the Port Authority did not have the authority under the bi-state legislation to commit 

funds to the Route 81 project, although this project would serve as a southern access 

to Newark Liberty International Airport. State of New Jersey v. Port Authority, 151 

N.J. Super. 127 (1977), aff'd, 159 N.J. Super. 102 (A.D. 1978). In addition, the Court, 

interpreting the Compact provisions authorizing the Port Authority to participate in 

"transportation" or "terminal" facility projects and the transportation goals set forth in 

those provisions, determined that the words could not be expanded to include a 

highway project: 

There is, however, no authority under this principle [avoidance 

o'f congestion, conflicting currents and long truck hauls] for the 

. Port Authority to engage in the actual construction of highways. " · 

State of New Jersey v. Port Authority, 151 N.J. Super. 127 

(1977), aff'd, 159 N.J. Super. 102 (A.D. 1978). [The court 

continued:] [t]o grant the relief which plaintiffs seek would be, in 

effect, to sanction the Port Authority building, without bi-state 

approval, not merely the Route 81 project·. but as many 

highways as it deems beneficial to the public and in accord with 

the comprehensive plan. Certainly, this is not the plain intent of 

the legislatures, especially where, as here, .they have remained 

silent. Not even an inference of the delegation of power to the 

Port Authority to construct Route 81 is permissible under the 

existing legislation. 151 N.J. Super. at138. 

As a result of the lawsuit, the legislatures of both states enacted expli9it 

legislative authority for the Port Authority to enter into agreements with New Jersey 

state agencies to fund such projects. In 1977 and 1978, legislation authorized the 

Port Authority to undertake two projects for improved access to the air and marine 

terminals. Those projects were: 1) "Highway access improvement project relating to 

Newaik International Airport and the Elizabeth-Port Authority Marine Terminal" and 2) 

"Construction of that p01tion of New Jersey Route 81 in. the city of Elizabeth ... 

extending generally north westward from and including a new inter change with the 

New Jersey turnpike across and connecting with North Avenue, to and including a 

new Interchange with U.S. Route 1." N.J.S.A. 32:1 .. 35.26; N.Y. Unconsol. Laws 

6631, note. The legislation also specified that the Port Authority could enter into 

agreements relating to such access · projects providing for the construction, 

ownership, maintenance of such projects by the State of New Jersey or a state 

agency (commission etc.) thereof. N.J.S.A. 32:1-35.27; N.Y. Unconsol. Laws 6631, 

note. 

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In a similar fashion, other legislation makes clear that the Newark bay-Hudson 

County extension was a "turnpike project of the New Jersey Turnpike Authority." The 

legislation provides: 

The Pott Authority is hereby authorized and empowered, in its 

discretion, to enter into an agreement or agreements upon such terms 

and conditions as it rnay deern in the public interest, with the New 

Jersey Turnpike Authority, or the New Jersey state highway 

department, or both, whereby the port authority may undertake to pay 

to such other party or parties to such agreement or agreements such 

portion or portions of the costs of construction either or both of said 

Newark bay-Hudson county extension terminal connections as the port 

authority shall determine to be proportionate to the benefit to facilities 

owned or operated by the port authority from such connections, 

whether or not such connections shall constitute approaches or 

connections to such port aUtl]ority facilities. 

N,J.S.A. 32:2-35; N.Y. Unconsol. Laws 6752 

The latter enactments would not have been necessary should the existing 

legislation, giving the Port Authority the authority to operate the Holland "funnel, the 

marine terminals and the airports been sufficient to allow the Port Authority to fund 

the New Jersey state projects. These enactments thus bolster the conclusion that 

there is insufficient existing authority for the Port Authority to undertake the Projects 

pursuant to the Holland Tunnel legislation and the marine and airport legislation, 

despite the benefits of the Projects to s.uch facilities. 

B. Lincoln Tunnel 

As previously noted, while the Port Authority has broad authority to engage in 

certain projects related to transportation and commerce in the region, Its authority to 

do so is tied directly to the bi-State legislation that gave the P<>rt Authority those 

powers. The Port Authority's participation in certain projects, and thus the 

expenditure of Port Authority funds, must find an anchor in such powers, and absent 

such anchor, the exercise of authority would be deemed to be ultra vires. We have 

therefore taken a further look to see what facility, if any, we can tie the Projects to, 

other than those most closely related which do not give the necessary authority. We 

have determined that we can link the Projects to the existing authority under the 

Lincoln Tunnel legislation. As stated earlier, the bi-state legislation authorizing the 

Lincoln Tunnel provides that "the Port Authority is hereby authorized and empowered 

to construct, own, maintain and operate the [Lincoln Tunnel] together with such 

approaches thereto and connections with highways as the Port Authority may deem 

necessary or desirable." N.J.SA. 32-1-119; N.Y. Unconsol. Laws 6502. In other 

words, the bi-state legislation expressly authorizes the Port Authority to undertake the 

design, planning and construction of projects that concern the roadways that 

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approach the Lincoln Tunnel. It can be argued that the Wittpenn Bridge, New Road 

and Pulaski Skyway are all roadways which approach and feed into the Lincoln 

Tunnel. 

Moreover, in court decisions upholding the Port Authority's 1987 toll increase, 

it was found that the "Port Authority's bridges, tunnels, bus terminal, PATH, .and bus 

programs form a integrated interdependent transportation system." Automobile Club 

v. The Port Authotily of New York and New Jersey, 706 F. Supp. 264, 280 (S.D.N.Y. 

1989), affd 887 F.2d 417 (1989). Studies introduced in the litigation cited specifically 

to the relationship between the Holland Tunnel and the Lincoln Tunnel and 

demonstrated that increased traffic at the Holland Tunnel results. in traffic diversion to 

the Lincoln Tunnel. lei. ("[t]he Lincoln Tunnel provides an alternative for the users of 

the Holland Tunnel"). The Port Authority engineering department will perform a traffic 

study to update and augment this analyses. 

However, it is important to note, that this statutory construction is not without 

doubt-and may·raise ·questions ·in the minds of some. The analysis veers 'away from 

the traditional model used by the Port Authority in determining whether it can 

undertake a project pursuantto existing Port Authority bi-state legislation. The looser 

the statutory construction means the greater the risk of a successful challenge by the 

bondholders and investors. 

Ill. Access to the Region's Cor.e and the Meadowlands Passenger Rail 

Facility 

NJDOT inquired whether The Port Authority of New York and New Jersey (the 

"Port Authority") is able to form a partnership with NJDOT for the undertaking of the 

Projects similar to the partnership formed between the .Port Authority and New Jersey 

· ·Transit ("NJT") in ·connection-witl>.tl'i'i'n;ccess-toth7fRegioJ1's·core··("ARC'T .. The ·· 

scope of ARC was significantly different then the scope of the Projects. ARC 

involved the construction of a commuter express tunnel connecting the States of New 

Jersey and New York. The Port Authority and NJT created a partnership to 

undeJtake the construction and development of ARC. NJT served as the lead 

agency and federal sponsor for ARC. Both the Port Authority and NJT committed 

significant resources to ARC, inclLtdlng both staff and funds required to complete the 

project. The parties formed a Project Management Committee to oversee the project 

that consisted of members from each partner. NJT was in charge of procuring and 

maintaining the design and construction management contracts and the Project 

Team, also consisting of members from each entity, was in charge of managing the 

contracts. NJT was responsible for handling all of the necessary property 

acquisitions in New Jersey and the Port Authority was responsible for handling all the 

necessary property acquisitions in New York. Each party would retain title to the 

respective property it acquired. 

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l.n contrast, with respect to the Projects, the Port Authority would not own any 

of the assets comprising the Projects. Upon completion of the Projects, NJDOT 

would continue to own and operate the assets. In addition, the Port Authority would 

be the only party funding the Projects. Therefore, conversely to ARC, here, the Port 

Authority would be the sole party funding the Projects notwtthstanding the fact that 

NJDOT would retain title to all of the assets. 

But to the legal point, the ARC project was grounded in bi-state legislation 

which gave the Port Authority the requisite authority to effectuate the project and 

acquire the property needed - namely the Port Development Acts, as amended. 

Under those Acts, the Port Authority is empowered to effectuate a Port Development 

project, consisting of the World Trade Center and "railroad facilities", referred to as 

the "Hudson tubes", and the "Hudson tubes extensions". The latter were defined as 

certain "improvements to passenger railroad lines connection with the Hudson tubes" 

including-

.... (v) improvements 'tci PeilfisYivahia slaticiri'int!le' city o( .. 

New Yorl<, state of New York, and to its railroad approaches 

From the state of New Jersey, as necessary or desirable to 

improve operations and to increase train and passenger handling 

capacity. . . · 

N.J.S.A. 32:1-35.51: N.Y. Unconsol. Laws 6602 

Falling within this definition, the ARC project proposed to increase transHudson commuter rail capacity from Secaucus Junction station to two tunnels under 

the Palisades and the Hudson River connecting to a new station directly .aqjac<>nt 

and connected to Pennsylvania station. The environmental st,tp_pgrtfoLthe proJ<>VL~ 

indicatedihanhewewstation would relieve severeiy''overcrowded and inadequate 

conditions at Pennsylyania Station in New York. 

Moreover, support for the Port Authority's participation in ARC was bolstered 

by legislative history ofthe Port Development Acts. That history made clear that the 

Port Development Acts were meant to facilitate, in part, a bi-state plan whose aim 

was to consider trans-Hudson transportation options to meet the growth ·and 

development anticipated for the region, including a rail tunnel into mid-town 

Manhattan. 

Similar to ARC, the Meadowlands Passenger Rail Facility ('Rail Link") was 

grounded in bi-state legislation as it was directly related to the Port Development Act. 

The Rail Link project extended the Pascack Valley Rail Line in East Rutherford, New 

Jersey to a new station for the Meadowlands Sports Complex and the Xanadu 

Redevelopment Project. This passenger rail connection encourages greater usage of 

PATH .because NJ Transit runs a shuttle service at peale times from Hoboken, New 

Jersey to the rail link. In addition, providing enhanced mass transit access to the 

page 6. 
Meadowlands Sports Complex site via PATH and other rail lines relieves traffic 

congestion on the Po1t Authority Hudson River crossings. 

IV. How the Port Authority Can Participate in the Projects 

As stated above, the Port Authority determined that it would undertake 

the Projects pursuant to the Lincoln Tunnel legislative authority. It is long standing 

policy that the Port Authority must control Port Authority projects connected to a Port 

Authority facility. The Port Authority cannot simply write a check to the 

Transportation Trust Fund. Further, allowing NJDOT to construct the Projects on 

behalf of the Port Authority would be just another way to fund the Transportation 

Trust Fund. The undertaking of these Projects is of a unique nature and outside the 

realm of the typical Port Authority undertaking. The Port Authority does not generally 

participate in large-scale projects that do not involve an existing Port Authority asset, 

or the acquisition of a Port Authority asset. Therefore, to take these Projects and 

handle them in a way contrary to the Port Authority norm wollld make an already 

questionable project in the eyes of some (i.e.; bondholders) even more questionable. · 

However, the Port Authority understands that NJDOT has already performed a 

great amount of work on each of the Projects, and most certainly, with respect to 

Wtttpenn Bridge, which is in the design phase of the Project and the initial contract is 

ready to be awarded. Recognizing the immediate need for these Projects, the Port 

Authority does not want to cause delay or slow down the processes already in place. 

In reviewing the ARC project. as requested, the Port Autl1ority could, with .certain 

modifications, utilize certain aspects of the ARC partnership model between the Port 

Authority and NJT. 

The Port Authority is amenable to entering into mobility and project 

management a[1reeme11t (the ,;PMA") .. with··NJDOT:-The·PMAwoUid provide for the·-·-

creation of a project team consisting of Port Allthority employees .and NJDOT 

employees. The NJDOT employees would serve as Port Authority employees and 

report to work at a centrally located Port Authority facility for the duration of the 

Projects. The Port Authority would reimburse NJDOT the staff costs and expenses 

associated with the employees' work on the Projects.. The PMA would further provide 

that the Port Authority and NJDOT would proceed with the Projects based on the 

existing plans and specifications, as well as the existing planning, design and 

engineering contracts. Finally, under the PMA, NJDOT would indemnify the Port 

Authority for all losses, damages, and third party lawsuits arising out of the plans, 

specification and contracts utilized for the Projects. · 

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