Port Authority Bus Terminal

The vice chairman of the Port Authority of New York and New Jersey wants the agency to investigate whether building a new Port Authority Bus Terminal in New Jersey could save money by taking advantage of lower building costs and a proposed trans-Hudson commuter rail tunnel. (Robert Sciarrino | NJ Advance Media)

(Robert Sciarrino | NJ Advance Media)

NEW YORK -- At up to $10.5 billion, the projected cost of replacing the Port Authority Bus Terminal in midtown Manhattan was a jolt even to the agency's own board members.

"I think we were all shocked by the number," Port Authority Chairman John Degnan told reporters last Thursday, after agency staffers presented five alternatives for a new terminal complex, ranging from $7.5 billion to $10.5 billion, all of them at or near the current location just outside the Lincoln Tunnel.

But what if the agency could shave billions of dollars off that cost - and generate additional revenues on top of that -- by building the new bus terminal in New Jersey?

Board members disappointed by last week's projections said they wanted staff and hired experts to think "outside the box," and for Vice Chairman Scott Rechler, that means outside Manhattan.

Next week, Rechler, Degnan and Port Authority Executive Director Patrick Foye will meet to talk about developing other bus terminal alternatives, including one that would situate the terminal west of the Hudson.

Rechler wants to investigate whether a bus terminal in New Jersey could be linked to a trans-Hudson rail line that would then carry commuters into Manhattan. One such line could involve the proposed Gateway commuter rail tunnel proposed by Amtrak, which in some sense may end up competing with the bus terminal for Port Authority and federal mass transit funding.

"There's been all this talk from elected officials about making a choice between the trans-Hudson Gateway project and the bus terminal," said Rechler, referring to the rail tunnel proposal, which is being led by Amtrak, and projected to cost $16-20 billion. "That's $25 billion (for the tunnel and terminal combined), and we should look at it holistically, and we shouldn't ignore the fact that we've got two problems to solve and we shouldn't ignore a solution that solves both."

Officials say the 65-year-old terminal is deteriorating and functionally obsolete. Its 230,000 average daily commuters is already well beyond capacity, with demand projected to grow to 330,000 by 2040.

Rechler said building a bus terminal in New Jersey would be cheaper and less disruptive than at or near the existing facility in Manhattan, where space is tight and ramps linking the new terminal to the Lincoln Tunnel would have to be built around the existing ramp network, all while current bus service remains in effect.

Relocating the terminal to New Jersey would also free up the three and half blocks along Eighth Avenue between 40th and 42nd Streets now occupied by the old terminal, said Rechler, a real estate investor who is president and CEO of Manhattan-based RXR Realty. He said the site is an extremely valuable piece of real estate that the agency could sell or lease for more money than it would make through the sale of air rights if it were to build a new bus terminal built on the old site.

The Gateway plan is still in its early stages, with funding yet to be determined, and Rechler acknowledged that the project can hardly be counted on at this point as a necessary companion to a New Jersey bus terminal.

Another potential rail link Rechler cited was a proposal to extend the 7th Avenue Subway from Manhattan to Secaucus, which some experts said would make a more suitable partner to a New Jersey bus terminal. But that proposal, raised in 2011 by former New York City Mayor Michael Bloomberg, has failed to gain traction and appears even more distant than the Gateway project.

Even so, with the potential cost difference between a New Jersey and New York terminal in the billions of dollars, Rechler said the agency had "a responsibility as one of the stakeholders" in both the bus terminal and the rail link to investigate whether the two could benefit from one another.

Degnan said he was open to the idea of New Jersey bus terminal, though he said he wants to retain an independent planning and design firm to come up with a fresh set of alternatives for a new depot, which he believes can be built for less money in less time.

Wherever the new bus terminal ends up, Degnan said he was determined not to let its progress be slowed by any connection to a still-tenuous rail link with New York City.

"The reality is, when you defer an urgently needed facility so it can be folded into a $15 billion rail project, it can lead to a delay," he said.

Steve Strunsky may be reached at sstrunsky@njadvancemedia.com. Follow hin on Twitter @SteveStrunsky. Find NJ.com on Facebook.