Industry Briefing

Air Cargo Facilities Development and Operations at John F. Kennedy International Airport

October 15, 2020

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JFK International AirportToday’s Presenters

S u s a n Wa r n e r D o o l e y : Av i a t i o n C h i e f C o m m e r c i a l O f f i c e r

M i c h a e l B e d n a r z : M a n a g e r C a r g o D e v e l o p m e n t ( Av i a t i o n )

L a u r a G a r l a n d : J F K M a n a g e r P r o p e r t i e s & C o m m e r c i a l

D e v e l o p m e n t ( Av i a t i o n )

R a q u e l P i n t o : S t r a t e g i c P r o c u r e m e n t Ad v i s o r ( P r o c u r e m e n t )

Today’s Agenda

➢ In tegr i ty Br ie f

➢ Overv iew of John F. Kennedy Internat ional Ai rpor t

➢ JFK Ai r Cargo

➢ Framework for Future Oppor tuni t ies

➢ The Procurement Process

➢ Next Steps

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Integrity Brief

Integrity Brief

• This Industry Briefing is being conducted for the purpose of providing background information only.

• During this Industry Briefing and during the question and answer opportunities, direct your question to the Strategic Procurement Advisor presenter only.

• Please note this Industry Briefing is being recorded and will be made available to others upon request and on the Port Authority’s website for on-demand viewing.

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Overview of John F. Kennedy

International Airport

John F. Kennedy International Airport Aerial View

• Busiest airport in the NYC Metropolitan

Area

• Located on Jamaica Bay in Queens, New

York

• Comprised of 5,000 acres of land,

including 880 acres in the Central Terminal

Area

• Maintains two pairs of parallel runways

with total runway length over nine miles

• Can accommodate Aircraft Design Group

VI aircraft

John F. Kennedy

International Airport

Today

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• Six (6) operating airline terminals, with131

aircraft gates

• In 2019, JFK served over 60 million passengers

and nearly 1.4 million tons of cargo

• Supports 300,000 jobs in the region and 40,000

jobs at the airport

• Generates over $45 billion in economic activity

• add text

John F. Kennedy International Airport - The Vision

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• World-Class Facilities befitting New York State

• Accommodate long term passenger growth

• World-class customer service• Reconfigured terminals and

roadways• Revitalized, more efficient cargo

operation

JFKAir Cargo

Air Cargo has an essential contribution to ...

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1. Global Trade 2. Passenger Airlines 3. Employment

Although air cargo is only responsible for less than 1% of the transported volume,

this represents 35% of the value(Source: IATA)

Air cargo significantly contributes to profitable passenger airline services

through revenue generated via the belly hold

Air cargo accelerates economic activity. Growth of air cargo generates

additional jobs at JFK(Source: JFK Air Cargo Strategy 2017)

JFK Air Cargo Traffic Trends

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JFK Air Cargo Historical Volumes (Short Tons)

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

International Cargo

Domestic Cargo

Top 15 cargo carriers serving JFK (2019)

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JFK is a critical link to global trade systems

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Share of total Imports and Exports by continent

45%

46%

46%

5%

3%

2%

2%

2%

1%

Imports: <1%

Imports: <1%

Imports: <1%

Exports: <1%

Total 2019 Imports: 657,862 STTotal 2019 Exports: 415,289 ST

45%

NEPA Approved for Development

Current JFKCargo Facilities …

Existing Cargo Buildings

Cargo Vision for JFK

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▪ “JFK air cargo operation is critically important to the region’s economy (…)”

▪ “Consistent with previous studies the panel recommends:

• increased access to updated, affordable, and right-sized cargo and industrial spaces at JFK

• a major consolidation of these facilities in a planned, efficient configuration far different from today’s layout

• to provide these cargo facilities in the north area of the Airport where there is convenient road access to off-airport cargo operations.

• at an appropriate location, to minimize the footprint of supporting infrastructure while maintaining a superior level of service.”

▪ “With any new cargo facilities, the Port Authority should comprehensively review on-airport cargo leasing and business practices to ensure the cargo operations continue to offer the essential global connections for the State of New York and the region“

3rd party handlers

Airlines (combination, all cargo) incl.Integrators

Air Cargo is a versatile, changing industry

✓ The traditional business models of the air cargo industry cargo are in transition

✓ The booming business of e-commerce and the increased use of 3rd party handling will result in a changing landscape of

(type of) operators and the business dynamics

✓ The cargo masterplan is adaptable to these changes

Many operators with varying operational and business models

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E-commerce entrants air cargo

Postal services

… and a shift towards a consolidated cargo handling practice

Facilities represent up to 30% of the cost structure of handling: Moving to more efficient operating model is imperative to meet air cargo industry performance targets and JFK land use efficiency

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Historical Multi-Tenant1 3rd Party Operator2

• Single Airline/User• Time of day peaks• Underutilized• Not flexible• Re-use challenges

• Multiple Airlines / Alliances• Better use of manpower and space• Flexibility increase• Re-programming possible• Accommodates Industry Consolidation

Airline Group Co-location

• Multiple Airlines / Multiple Alliances• Most efficient use of space and

manpower• Highest utilization• Flexibility increase• Re-programming possible• Good governance

3rd Party Handling

Cargo Area will be gradually redeveloped

Phasing scenarios accommodate all operations and growth

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Core Components

✓ Class A Cargo Terminals

✓ Common Use Aircraft Parking

✓ Truck Staging Areas

Free up space

Develop

Relocate operators

NCA

Conceptual evolution

Time Frame for DevelopmentsPlots and projects will be developed progressively

Identify Interested

users/tenants operators

Prequalify developers

Engage developers

Issue RFPs and LOs to prequalified

firms

Demolish and develop

buildings and infrastructure

Construct New Facilities

Operations

Development of each facility as part of a long-term development program

Development of each facility as part of

a long-term development program

2020 203X

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Migration requires care to accommodate ongoing operations, demolition, and the construction process.

Individual Sites

Framework for Future Opportunities

Developer Responsibilities

➢ Design and development

(incl. demolition, site preparation, utilities, construction fit-out, and programming /

management / operation) of the applicable facilities

➢ Financing

Secure all equity and debt financing necessary for the project

➢ Timelines: Move quickly

Readiness to complete design and construction stage once any necessary

environmental processes have been completed according to specified and agreed

timelines

➢ Leasing

Marketing and securing tenants: design concept, economics and commercial

vision to promote growth at JFK

➢ Ground lease / development arrangement

Long-term agreement with the Port Authority. The term and conditions will

depend on the magnitude of investment

Follows global industry practices for third party investment and development on airport land

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Commercial Framework

Land ownership

➢ The Port Authority maintains long term control of the land

Development opportunities

➢ Selected project developers and PANYNJ will complete long-term agreements for development and land use

Infrastructure

➢ Developers will develop required infrastructure and access to public utilities

Conditions

➢ The agreement will specify land use, building operations objectives and constraints

➢ Developers and/or operators will responsible for the maintenance of the facility, long-term fixtures, furniture, equipment

Commercialization / Leasing

➢ Developers will be responsible for the commercial letting of the real estate subject to PANYNJ consent

Consistent with overall airport-wide commercial planning

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Best Practices in Air Cargo Development• Technology and modern cargo warehouse configurations

• Environmental and security compliance with local, State and Federal regulatory

requirements

• Compliance with FAA NEPA Process

• Sustainable design (i.e. LEED silver certifiable) of facilities and associated

infrastructure

• Renewable energy/energy efficient installations

• Electric vehicle charging equipment (airside and landside)

• Performance measurement & monitoring

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Participation Goals

• Making good faith efforts to provide for meaningful participation by MBEs, WBEs, SDVOBs, and

LBEs in all purchasing and subcontracting opportunities, including purchase of equipment,

supplies and labor services

• MBE: Minority Business Enterprises

• WBE: Women Business Enterprises

• SDVOB: Service-Disabled Veteran-Owned Small Businesses

• LBE: Local Business Enterprise

• Responsible and fully committed to engaging local business enterprises during the opportunity

• Submitting a statement that the Respondent has reviewed and understands the Port Authority’s

MWBE/SDVOB policy and will in good faith seek to create opportunities and encourage LBEs

and MWBE/SDVOB participation in all aspects of the development and operations.

Lessee or Operator Responsibilities

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ProcurementProcess

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RFQ ObjectivesPhase 1 -- Qualifications

• Pre-qualify interested firms that have experience developing air cargo projects in order to expediate future RFP and/or LO processes

• Create opportunities that encourage local business enterprise, MWBE, SDVOB participation in all aspects of the development and operations of facilities

Phase 2 – Collaborative Dialogue Meetings

• Communicate to the development community foundational information regarding land and facilities at JFK that portray a range of options for cargo facility development at JFK

• Obtain private sector analysis of existing aviation sites and potential projects that could be developed

• Enable firms to evaluate capital investment opportunities at the Airport

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Request for Qualifications

A. Company Profile

B. Agreement on Terms of Discussion

C. Certification of No Investigation and Performance on Prior Contracts

D. Development and Operations of Air Cargo Facility Qualifications and Experience

E. Key Personnel

F. Financial Status

G. Bank Credit Reference

Requested Materials

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JFK Air Cargo Facilities Development

Pass/Fa i l

➢ Respons iveness to RFQ

➢ Respondent Exper ience

➢ Financ ia l Capac i t y

Request for Qualification Evaluation Criteria

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Request for Qualifications

• Five years of experience in air cargo facility development of at least two developments with a

minimum 100,000 square feet

• Qualifications and resumes for Key Personnel that will have key responsibilities with the

delivery of the air cargo facilities

• Demonstrate evidence of revenues of at least one million dollars a year for the last five fiscal or

calendar years

• Ability to comply with FAA Part 139 and all applicable environmental responsibilities

• An affirmation to create opportunities that encourage local business enterprises and MWBE and

SDVOB participation

Minimum Requirements

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JFK Air Cargo Facilities Development

Respondent’s Team Management and Organizational Structure

➢ Narrative description of Respondent’s management or governance structure including

allocation of roles and responsibilities

➢ Organizational chart that shows proposed structure

Experience and Qualifications of Respondent's Team

➢ Performance history and experience of the Respondent's Team delivering development and,

operations and maintenance of air cargo facilities at airports with similar size and functionality

to the Airport

➢Prior project details including construction value, financing framework, commercial

framework, and references

Submittal Requirements

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JFK Air Cargo Facilities Development

Key Personnel Experience and Qualifications

➢ Provide qualifications and resumes of Key Personnel, including key

leadership and management staff.

Financial

➢ Financial statements for Respondent and each member of team

demonstrating sufficient financial resources and capacity to perform future

development opportunities

➢Evidence of minimum required gross revenues

➢Bank references

Submission Requirements (cont.)

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Next Steps

JFK Air Cargo Facilities Development

Timeline

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CDMMeetings:

Q1 2021

Selection of Prequalified

Respondents: Q1 2021

SOQ Submissions

Due November 17, 2020

RFQ Questions

Due: October 30,

2020

Issue RFQ: October 15,

2020

CDM = Collaborative

Dialogue Meetings

Questions?

Submitting Questions

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• To submit a question, use the Chat function in WebEx

• Select the chat icon at the bottom of your screen:

• Open the chat and submit your question to “everyone” to send it through publicly or select “Raquel Pinto (Host)” to submit your question privately

• All questions will be read aloud and answered by the Port Authority team

Thank You!