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Federal actions boost multi-billion-dollar New York TOD

Two recent decisions by the federal government may advance the Midway Crossing project, a 173-acre, USD 2.7bn New York transit-oriented-development (TOD) centered on an airport, a Long Island Railroad station and a life sciences campus.

One key approval for the proposed project recently came from the Federal Aviation Administration (FAA).

“The Town of Islip is pleased that the FAA has approved our request to allow development to move forward on the area of Long Island MacArthur Airport nearest to the Ronkonkoma Railroad station,” said Islip Town Supervisor Angie Carpenter, in an email to Infralogic. “This would allow the proposed County convention center and hotel, and the Midway Crossing life sciences project, to take the next steps in the approval process. We are grateful for the FAA’s thoughtful consideration and approval of our application.”

The Midway Crossing project is anticipated to include a new, eight-gate North Terminal at Long Island MacArthur Airport; a walkway to connect the airport to the Ronkonkoma Long Island Railroad Station, to enable a a “train-to-plane” connection; over two million gross-square-feet of new office space, to include laboratory and product development space; a new convention center; and a 300-room hotel.

Another piece of positive news for the project came from Amtrak, which announced earlier this month that it was using a USD 500,000 grant from the Federal Railroad Administration to study extending the journey of three daily additional roundtrips on the Northeast Corridor that currently run from Washington to New York’s Moynihan Station to reach Ronkonkoma. The routes would also include stops at Philadelphia and Baltimore.

“Midway Crossing will change the trajectory of Long Island’s future,” said Derek Trulson, vice chairman at Jones Lang Lasalle (JLL), which is assisting with the project structuring. The Town of Islip and Suffolk County designated JLL as the project’s master developer in 2022. “It will bring thousands of new jobs, multi-faceted investment, valuable amenities and, most importantly, it will position Long Island to be competitive in a future that embraces talent, technology and infrastructure.”

The project has the potential to help alleviate traffic congestion, a major problem on Long Island, according to Michael Shenot, managing director at Jones Lang LaSalle Brokerage.

Midway Crossing’s proximity to the Ronkonkoma station “is going to help alleviate some of that roadway traffic,” Shenot said in an interview with Infralogic. “The office building doors are literally 40 feet from the train station. So, we think just like you see in many cities, when it comes to deciding on mass transportation versus getting in your car and driving, you’ll utilize those transportation assets.”

While possible increased Amtrak service from Washington, DC would be a boost to Midway Crossing, Shenot notes other LIRR investments that also strengthen the project. The LIRR’s USD 387m Double Track project added a new second track between the Long Island community of Farmingdale and Ronkonkoma. Another completed project, the USD 2.6bn Main Line Third Track, was built to reduce train congestion, and enable bi-directional service during peak travel periods.

The most well-known project, the USD 11bn Grand Central Madison, which opened in February 2023, connects LIRR service to Grand Central Terminal, and saves Long Island to Manhattan commuters 20 minutes each way.

Midway Crossing will offer a situation that does not exist for travelers to JFK or LaGuardia airports: a one-seat train ride from Penn Station or LaGuardia to the Ronkonkoma LIRR station, a source familiar with the project said.

New York City airports are confronting major capacity issues, and the cost of operations at those airports has priced out low-cost carriers, the same source said. But Long Island MacArthur has room to grow, and does host low-cost carriers, he said.

Southwest Airlines, Frontier Airlines and Breeze Airways currently utilize the airport, according to the airport’s website.

The project is likely to entice developers, who will be able to develop new buildings “at a fraction of the cost of developing the same building in New York City,” the same source said.

Infrastructure investor Ullico was mentioned in a May 2023 presentation on the project as being in conversations “about possible infrastructure and overall construction financing.”

An email to Ullico seeking comment was not returned.

Health care firms and research institutions are major employment hubs on Long Island, Shenot said, naming Northwell Health, Stony Brook University, Cold Spring Harbor Laboratory and Brookhaven National Laboratory as the leading examples.

“This development will really support the attraction of knowledge base workers and employers to Eastern Long Island,” Shenot said. “We will be able to provide them with the assets to compete in life sciences technology and early-stage commercialization and knowledge monetization.”

With the FAA approval, “it’s now time to begin moving forward on the next stage funding efforts to move the terminal,” Shenot said.

Calls to the Town of Islip seeking comment on possible procurement options the airport may be considering for the new terminal were not returned.