On Monday, Gov. Kathy Hochul announced a new $9.8 billion international terminal at Kennedy Airport. Groundbreaking on Terminal 1 begins next year with a targeted opening in 2026. Credit: NY Governor's Office

The Port Authority of New York and New Jersey has reached an agreement with investors to build a $9.5 billion terminal that will anchor the south side of Kennedy Airport, Gov. Kathy Hochul announced Monday.

The 2.4 million-square-foot New Terminal One will be built in phases on the sites of the outdated Terminals 1 and 2, and the former Terminal 3, Hochul said. Terminal 3 was demolished in 2013.

"So, whether they arrived here in coach, when they arrive and open the doors and come into our terminal, it’ll be a first-class experience," Hochul said during a news conference at the airport.

New Terminal One — the fourth major terminal project as part of the state’s Kennedy Airport transformation effort — will have 23 gates, service 20 million travelers annually and create more than 10,000 jobs, including more than 6,000 union construction positions, the governor said.

The passenger facilities at New Terminal One will feature larger check-in, security and concessions areas, new dining and retail amenities, and art featuring New York landmarks and artists, state officials said.

A private consortium that includes Carlyle, JLC Infrastructure and Ullico will finance the project, officials said, with operating and technical services provided by a joint venture of Munich Airport International and CAG Holdings.

Port Authority’s Board of Commissioners is expected to vote on the revised proposed lease agreement at its Dec. 16 meeting.

"Today's announcement loudly proclaims the confidence the private sector has in the future of JFK Airport and of our region," said Port Authority Executive Director Rick Cotton in a statement.

As part of the project, Port Authority will fund improvements to local roads, parking and utilities, including a new electrical substation, officials said.

COVID-19's effect on air travel, Hochul said, necessitated changes to the original New Terminal agreement, which was reached in 2018. The restructured deal extends the lease agreement from 2050 to 2060 to provide additional time for financiers to recover their investment, officials said.

The project "will deliver a world-class terminal," and include participation of minority and women-owned business enterprises at "new heights and help spur regional economic growth," said Gerrard Bushell, executive chair of New Terminal One, in a statement.

Construction of the new terminal, initially scheduled to break ground in 2020 but delayed because of the pandemic, is now set to begin in mid-2022.

The first phase of the project, including the new arrivals and departures hall, and the first set of new gates, is expected to open in 2026, with the project’s full completion expected in 2030, officials said.

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