EN TERRIFIC REASONS WHY MASSPORT SHOULD HAVE HAD A MISERABLE YEAR IN FISCAL 1981:
THE AIRLINE INDUSTRY WAS OFE \r>sr Yw
Ö Z f S»" 1/1 Qt SOARING FUEL COSTS. O g o O Vl OUR AIR CARGO FACILITIES 0) o U\ WERE STRETCHED TO D ir- THE LIMIT a } O Q ■ c . (/■> BOND RATINGS FELL ACROSS (ft THE STATE AND NATION. INTEREST RATES REACHED NEW HIGHS. THE BOSTON FISHING INDUSTRY IS STRUGGLING TO REGAIN ITS STRENGTH. THE PORT OF BOSTON IS SADDLED WITH PROBLEMS. WE OWN HUNDREDS OF ACRES OF OBSOLETE 4R WATERFRONT PIERS. 387.3M3 Ml*l83r 1981 WE RUN A MAJOR U.S. AIRPORT THAT SITS IN PEOPLE’S BACKYARDS. TEN REASONS WHY WE DIDN’T: 1. DAVID R BERNSTEIN ADMINISTRATION HR AND FINANCE DIRECTOR 387, 3 h 3 MMI 2. WILLIAM C. COLEMAN AVIATION DIRECTOR I n \ 3. ELIZABETH L TAYLOR & BUDGET DIRECTOR 4. MARTIN C. PILSCH. JR. PORT DIRECTOR 5. DAVID R WEINER ENGINEERING DIRECTOR 6. ELLIOT K. FRIEDMAN DEVELOPMENT DIRECTOR a 7. KENNETH C. PEARSON BRIDGE DIRECTOR 8. ROSLYN M. WATSON COMMONWEALTH PIER PROJECT MANAGER 9. NORMAN J. FARAMELLI PLANNING DIRECTOR 10. CLAIRE R. BARRETT MANAGER. NOISE ABATEMENT OFFICE 1 » 2 “ WITHOUT STRONG MANAGERS, MASSPORT WOULD HAVE HAD A WEAK y e a r :1 The value of strong, capable managers was never more apparent at Massportthan during fiscal 1981. Financially, Massport enjoyed its best year ever, despite a host of eco nomic. legal, and environmental problems. The airline industry, our largest source of revenue, underwent serious retrenchment and losses, fueled by rising energy costs, lower seat demand, and a post deregulation realignment. Investors, to whom we turn to finance many of our activities, were influenced by Proposition 2}k, as it created large question marks for the public sector in Massachusetts. In the face of a growing urgency for new air cargo facilities, a major airport development project met with environmental problems. Interest rates climbed to new highs as we sought private capital to redevelop our obsolete waterfront properties. Amid strong external and internal pressures on the Port of Boston, we kept expanding our seaport container capacity. As Logan airport continued to gain air service, we insisted on a noise abatement program that was second to none. And, while many other organizations shrank from such responsibilities, Massport expanded its commitment to equal opportunity. Taken together, these factors could have been suitable apologies for Massport's having a weak year. Yet, in fiscal 1981, Massport grew stronger and better, accomplishing virtually all of its major goals. The reason Is Inescapable: Massport is blessed with managers of exceptional skill, judgment, and dedication. The 700-some people who work for the Authority made fiscal 1981 a success. Therefore, it is with pride that I dedicate this report to them. Massport, The Massachusetts Port Authority A GUIDE TO THE ACCOMPLISHMENTS OF MASSPORT MANAGERS IN FISCAL 1981. PAGE 10. BIRD ISLAND FLATS HITS PAYDIRT. After two years of planning and review, Logan's badly-needed PAGE 6. air cargo/commercial LOGAN SOARS complex goes into UNDER the ground. DEREGULATION. The airline indus N. try staggers, other airports didn't cope, yet Logan International outperforms its East Coast rivals. PAGE 12. TURNAROUND AT THE PORT. Overshadowed by Logan, saddled with a chronic lack of space, the working port of Boston under goes a major buildup. PAGE 16. COMMONWEALTH PIER LURES NATIONAL DEVELOPERS. Five nationally-known development firms vie for the right to recycle the huge pier. PAGE 18. RENAISSANCE AT THE FISH PIER. Rescued from demc T lition, the Fish Pier enters the fine F it r r r ! ? stages of modernization, reviv m t t a 11 III 11 ing the industry and the area. ■i...... * . •■"'iiiiii,, “ WITHOUT STRONG MANAGERS, MASSPORT WOULD HAVE HAD A WEAK PAGE 20. I MASSPORT GAINS HIGHEST FINANCIAL RATINGS. Moody’s and Standard & Poor’s give Massport a fiscal P 1 checkup and pronounce it In fine form. \>r r - \ Y y DEVELOPMENT BEYOND 2 1/2. Enjoying exceptional financial strength, Massport launches a building boom for the 1980s. PAGE 22. MORE PEACE AND LESS NOISE. The nation’s 10th busiest airport remains the nation’s most successful on noise abatement bringing relief to some PAGE 24. REAFFIRMING A COMMIT MENT TO PROGRESS. With innovative programs for women, minorities, smalfbusi- ness, and the community, Massport remains resolute on equal opportunity. 5 “ At other airports, deregulation caused chaos and frustration. At Logan, we adapted smoothly because we're not locked into long-term leases that make changes in the airline industry difficult to accommodate. And our marketing program allowed us to grow intelligently and quickly.’ W illiam C. Coleman Aviation Director William C. Coleman Thomas J. Kinton Joseph EXreene Aviation Director Building Maintenance Manager Ground Transportation Manager ogan International soars European traffic at Logan is to Denver and points beyond in June, under deregulation. As the expected to accelerate with the advent 1981. Earlier, New York Air launched a L ™ J dust settled from deregulation of Northwest Orient’s London service, spirited campaign to of the airline Industry, Logan Interna which began in May, 1981. Massport unseat 20-year incum tional emerged as the dominant growth was especially gratified by this route bent Eastern Airlines, airport In the Northeast corridor. award since it capped a four-year cam whose shuttle has long In the two years paign by the Authority to restore dominated the highly since deregulation, Boston/London service lost under a desirable (3rd busiest 1978-80, Boston led U.S.-Brltish aviation agreement signed in the U.S.) Boston/New York run. all other East Coast in 1977. The competition was soon joined by airport cities in domes Strong marketing also brought the newly-formed People Express and by tic passenger growth nation’s 9th leading airline to Boston, World Airways, both of whom offered rate and outdistanced the other East Continental, which inaugurated service discount fares between Boston and Coast gateways with a 29 percent Newark airport, which serves the New surge in trans-Atlantic travelers. York area. In addition, four new com- , muter airlines opened regional service during FY81. 6 Richard J. Dalton Bernard t.u eary wmiam u. jerrrey jo a n n. mitcnen Field Maintenance Manager Parking Garage Manager Assistant Fire Chief Public Information Manager New international carriers brought To ease congestion for Logan trav major U.S. airlines plunged to $356 to Boston included El-AI, with weekly, elers on the ground, Massport took a million in CY80, Logan maintained its non-stop charters to Tel Aviv, and Capi number of steps to improve its already price competitiveness with other air tol, offering new seats to Brussels and well-developed ground transportation ports, showing net operating revenues other European cities. system. The terminal-to-subway of $38 million for the same period. Increased activity at the world’s 13th Shuttle Bus service was streamlined, Moreover, Massport took steps in busiest airport prompted Massport to while the price was held at 250 a ride; financial management that made adopt a peak pricing concept for small new bus and limousine service was Logan Airport virtually “inflation-proof, aircraft using Logan to minimize future brought to the airport; insuring that the airport will remain a airport congestion and strengthen and the Share-A-Cab stable source of funds to underwrite safety and efficiency. program was refined. Massport's objectives for many years. Financially Logan —which accounts for 70 cents of every dol lar in Massport revenue—remained strong: Revenues grew to $72 million in FY81. While operating losses for 7 “ At other airports, deregulation caused chaos and frustration. At Logan, we adapted smoothly because we're not locked into long-term leases that make changes in the airline industry difficult to accommodate. And our marketing program allowed us to grow intelligently and quickly." W illiam C. Coleman Aviation Director William C. Coleman Thomas J. Kinton Joseph E. Greene Aviation Director Building Maintenance Manager Ground Transportation Manager 8 Richard J. Dalton Bernard E. Cleary William D. Jeffrey Joan E. Mitchell Field Maintenance Manager Parking Garage Manager Assistant Fire Chief Public Information Manager "Bird Island Flats is finally going forward because we managed to resolve the complex and sensitive issues that had stalled this project in the past. Under the mixed-use concept we re committed to, everyone benefits-the airfreight industry, business, labor, the community.and Massport.” Norman J.Faramelli Planning Director Norman J. Faramelli Christian W. Dame Planning Director Bird Island Flats Project Manager1 n ird Island Flats hits paydirt. K Between 1964 and 1973, J ninety acres of Boston Harbor ^ were filled to create an area of Logan airport known as “ Bird Island Flats." For the next seven years, the prime par-, cel lay virtually vacant, a victim of, among other things, its proximity to residential neighborhoods. Finally in 1979, under Executive Director Davis, Massport introduced a unique proposal for the site: Develop it . 10 - 1 ^ 1 » V MS CL M L ' \ I 1 ili ' - ' M Richard R Marchi Albert V. Bratt Edward M. Baldwin Assistant to the Aviation Director Assistant Director of Aviation, Planning Aviation Planner ■ as a combination air cargo and com- the way was finally smoothed for eventually create over 2,000 perma ■ mercial center. This mixed-use plan met development of the new air freight nent new jobs, and generate substantial the growing need for expanded air- complex. tax revenue for the City of Boston. ■ freight facilities at Logan while offering Over the next two years, Massport The new cargo facilities will assure substantial noise relief to residents and private developers will invest an businesses that depend on time- shielded by the new commercial estimated $134 million to create an air- sensitive deliveries, such as the region’s structures. frelght/commercial complex at Logan high technology industry, of the highest The plan won all relevant federal International. The project will require quality airfreight service. Equally approvals and enjoyed support from 1,500 construction workers, important, the new commercial struc the airline industry, organized labor, the tures will shield nearby residents from business community, the Boston news nearly one-half of Logan’s ground ' media. Even community activists, who noise, while providing revenue to allow - had in the past opposed Logan expan Massport to price its new airfreight sion, agreed to the plan. facilities attractively enough to insure In early 1981, the project met with quality tenants. One such tenant, North II a series of environmental problems. west Orient, has already decided to I After months of negotiations, however, invest $3 million at the site. “The new facility at Conley Terminal is the first major seaport development in Boston in nearly a decade. With further expansion and capable management, there’s no reason why Boston cannot regain its rightful standing among the world’s great ports.” Martin C.Pilsch, Jr. Port Director Martin C. Pilsch.Jr. John P. Driscoll Dennis W. Kay ' Port Director Conley Terminal Manager Moran Terminal ManaglJ urnaround at the Port of major drawback to progress at the Port ator, the new berth will boost container Boston. Massport has of Boston has been the chronic lack of handling capacity in the Port by T embarked upon a bold devel container facilities. Thus, after an 50 percent and relieve congestion opment course for the Port of Boston, exhaustive marketing study, Massport at Massport’s Moran aimed at re-establishing what was once has begun a major buildup of its Terminal. the busiest seaport in marine cargo capacity to create a sea The second stage in the United States. port for the 1980s and beyond. the Port’s revival is While numerous Exhibit Number One in the expan now under construc factors have driven sion will open in the fall of 1981: tion in South Boston: trade to other North An $18 million, two-crane, 10-acre con Massport Marine Term Atlantic ports, the tainer facility built at Massport's Paul lion complex large enough to accom- W. Conley Marine Terminal (formerly Castle Island). Leased to a private oper 12 RinoMoriconi Anne D. Aylward Francis J. Sheehan William L. Dickerson Assistant Port Director, Traffic Assistant Port Director, Planning Assistant Port Director, Sales Assistant Port Director. Administration modate up to four berths and five $10 million in new equipment and cap ping. While overall container volume cranes. The 47-acre site will soon be ital improvements. The Authority is also was down in Boston and other East used to hold automobiles, lumber, and taking steps to realign its current oper Coast ports in FY81, container traffic at other commodities, followed by con ating responsibility at Moran. the Conley Terminal jumped 68 tainer development in the 1990s when The Port’s bottom-line performance percent and automobile imports grew the terminal will be able to work remained on a turnaround course, as 39 percent. 80,000 containers annually. Massport reduced the Port deficit for A major reason for high shipper Meanwhile, Massport continued to the third consecutive year. Despite its interest in the Port of Boston is improve efficiency at Moran Container problems, the fifth busiest port in the the unusually high Terminal In Charlestown, now operat North Atlantic continued to attract ship value of its cargo- ing beyond its original capacity. In the three times the last five years, Massport has invested national average and 20 percent higher than New York’s. “ The new facility at Conley Terminal is the first major seaport development in Boston in nearly a decade. With further expansion and capable management, there’s no reason why Boston cannot regain its rightful standing among the world’s great ports.” Martin C.Pilsch, Jr. Port Director Martin C.Pilsch, Jr. John P. Driscoll Dennis W. Kay 1 ] Port Director Conley Terminal Manager Moran Terminal Managaj 14 RinoMoriconi Anne D.Aylward Francis J. Sheehan William L. Dickerson Assistant Port Director, Traffic Assistant Port Director, Planning Assistant Port Director, Sales Assistant Port Director. Administration “ During a period of extraordinarily high interest rates. Massport generated $150 million of investor interest in its obsolete pier properties. Commonwealth, Hoosac, and East Boston piers, which have been seriously underutilized for decades, will soon generate substantial revenues and benefits.” Elliot K. Friedman Development Director Elliot K. Friedman Roslyn M. Watson Richard J. Lettieri Development Director Commonwealth Pier Project Manager General Counsel ommonwealth Pier lures Real Estate: Rose Associates: and option: A mixed-use plan combining a I national developers. Com Olympia & York/Chase Enterprises/ high technology marketing and exhibi- ' C monwealth Pier, the large but McCourt Company. tion center with prime office space, and mostly unused terminal resting on All five firms have extensive experi several waterside restaurants and retail prime waterfront property, is about to ence in large-scale redevelopment outlets. undergo major redevelopment that projects in Boston, New York, and Passenger ship operations will ; : promises to make it a landmark com elsewhere. Massport anticipates the remain at the pier to accommodate the | mercial center within four years. project will require $100-5125 million growing demand for cruise ship travel ; In response to a prospectus issued in private, non-Authority capital. at New England's only passenger ship 1 by Massport, an enviable field of devel While suggesting many reuse terminal. opment firms with national stature possibilities, the Massport prospectus Prior to redevelopment, Massport Is ‘ competed for the right to recycle the focused on one particularly attractive making effective use of 40,000 square 800,000-square-foot pier. The field feet of the pier for a Foreign Trade included: The Beacon Companies: Zone-an area offering unique benefits ■ Cabot, Cabot & Forbes: Fidelity 16 Carolyn S Yee Anne R. Meyers Alice V. Boelter Foreign Trade Zone Analyst Hoosac Pier Project Manager East Boston Piers Project Manager to businesses subject to U.S. Customs oosac Pier: Development ast Boston Piers: Redevelop regulations. While such zones normally just around the corner. ment for the good of the E community. In the fall of 1981, need 3-5 years to establish themselves, H In line with the redevelopment the Massport Zone, in less than one Massport signed an agreement with of Commonwealth Pier, Massport has the Boston Redevelopment Authority year of operation, has handled $1.3 begun serious negotiations with a million in merchandise. giving the City the power to plan rede prime tenant to redevelop a major por velopment of 56 acres of obsolete and Following receipt of the develop tion of Hoosac Pier, a 204,000-square- ment proposals in the fall of 1981, surplus Massport pier property on the foot structure on Boston’s inner harbor. East Boston waterfront. Committed to Massport expects to name a developer Having completed thorough site and by the year's end. Assuming an working closely with the East Boston feasibility studies, and after addressing community, the BRA will oversee con expeditious lease-signing process, the the concerns of Hoosac’s Charlestown "new” Commonwealth Pier could be version of the site into an estimated neighbors, Massport is aggressively $150 million in commercial, light opened as early as 1985 occupying seeking to make full and appropriate center stage in an area described by industrial, residential, and recreational use of a terminal that has been virtually facilities. The agreement gives local res The Boston Globe as "the next section vacant since the late 1950s. of the city ripe for explosive building idents long-awaited access to the waterfront as well as new job opportu growth.” nities in the area. “ When you see what the Fish Pier modernization has meant to the Boston fishing industry, it's hard to imagine the pier was almost lost. After decades of stifling foreign competition and domestic indifference, Boston’s i fishermen are getting a second chance.The road back won’t be short or easy, but with help from Massport and Washington, they’re going to make it.” Kathryn E. West Fish Pier Project Manager Kathryn E.West Fish Pier Project Manager enaissance at the Fish Pier. scheduled for comple ing of new office space. Once the proud home of one of tion in 1983. Prior to Since the renovation began in 1979, R the world's great fishing fleets, the administration of in the wake of the 200-mile fishing- the Boston Fish Pier is now the site of Massport Executive limit law, the pier has sparked a revival one of the nation's most unique rede Director David W. in the Boston fishing industry. The velopment projects. Davis, the future of revival has been marked by a three- c Massport. which the pier was uncertain. The present year increase in fish landings, new acquired the 65-year- program, largely financed with federal employment in the trade, new boats at l old pier in 1972, is * V grants, is aimed at reviving the local the pier, and $12 million in private directing a $16 million fishing industry through modernized rehabilitation program processing facilities and by generating supportive revenue through the leas 18 Robert S. Parks Joseph W. Reale Property Manager, Development Properties Fish Pier Superintendent investment near the site. In the last The redevelopment of a multi-purpose fiscal year, $31 million in fish were Boston Fish Pier, combined with the processed at the pier. anticipated private But fishing is only part of the story. development nearby, Taking advantage of the shortage gives Massport a lead of quality downtown office space. ing role in the revival Massport is converting an area not of a long-neglected usable for fish processing - the top floor commercial area. of two pier buildings-into 80,000 square feet of commercial office space, to be leased to provide additional reve nue for the pier. 19 “ Massport is particularly proud of its superior financial performance in the face of a generally negative climate for other borrowers. As we approach the volatile capital markets to finance a major development program, Massport's financial strength and flexibility are at an all-time high.” David P. Bernstein Administration and Finance Director David R Bernstein Elizabeth L. Taylor Robert M. Dursin Francis L. Penders Administration and Finance Director Budget Director Chief Operating Budget Analyst Capital Budget Planner assport gains highest finan spectively. The top ratings reaffirmed the market. Demand for the Issue was cial ratings. In strong testimony Authority’s financial strength and sta swift and brisk from both bank trust to the fiscal health of Massport, bility at a time when the tax limitation departments and tax-exempt funds. the nation's leading municipal investor measure known as Proposition ZVz As Massport carries out a major services recently gave their highest pos was creating large obstacles for other development agenda for the 1980s, sible ratings to the Authority's short borrowers. requiring $90 million in outside capital ; term commercial paper offering. Furthermore, interest rates reached through FY85, its superior standing Moody’s Investor Service and astronomical new highs making bor with the financial community assures Standard and Poor’s Corporation rowing difficult, if not impossible, that Massport will be able to pursue its gave a $23 million, tax-exempt issue throughout the nation. development program aggressively and by Massport a P-1 and A-1 rating re The offering made Massport the first lower the cost of construction. agency in the state and the first port authority in the nation to enter the inno vative short-term commercial paper 20 "Massport has always created economic benefits for the state.Ourfinancial independence allows us to move ahead with major development projects- all without a dime in State or local taxes.” David B. Weiner Engineering Director John R. Davis Anthony C. Cecere Alexander Surko Chief Airport Engineer Assistant Engineering Director, Contracts Port Engineer evelopment beyond 21/2. $12.2 million; $4.4 million was paid in FY81.The program provides badly- Paul W. Conley Operating by law without State Terminal expansion 1 8 m illio n D tax revenue or pledges of State needed property tax relief and adds to credit, Massport is essentially removed the resources of local municipalities. Boston Fish Pier mod from the restrictions imposed by state Enjoying exceptional financial ernization, 1979-83 16 million** (or local) tax limitation initiatives, such strength, Massport has embarked as Proposition 2Vz. upon a half-billion dollar development Commonwealth Pier Massport is financed almost entirely program with powerful and timely ben redevelopment 100 million*** by private sources: through charges efits to Massachusetts and the region. paid by users and tenants of its proper Massport Development Agenda East Boston Piers rede ve lo p m e n t 150 million*** ties, through privately-held revenue for the 1980s. bonds, and through returns on its A summary of major capital con Total jobs created struction projects under way or investments. by th e above 13,300 At the same time, Massport anticipated. All costs are estimates. 4,100 remained the only authority in the state Construction New, permanent 9,200 to make in-lieu-of-tax payments to Air cargo/ local governments. Since 1979, the co m m e rcia l complex at Logan *$100 million in private funds; balance provided by cities of Boston and Chelsea and, most $134 million* Massport a irp o rt **$8.5 million in federal funds recently, the Town of Winthrop have “ •Majority of funds from private sources received Massport payments totalling Logan terminal improvements, 1982-5 2 8 m illio n Massport Marine Termi nal construction to 1991 8 0 m illio n R0C0NEC0 21 "Attempting to reduce noise and friction at a major airport as close to people's homes as Logan is requires cooperation. By working with the airlines, the community, and the FA A, we cut noise for 65,000 people-an d we did it while Logan made strong air service and revenue gains.” Claire R. Barrett Manager, Noise Abatement Office Larry E. Coleman Noise Abatement Supervisor V ore peace and less noise. dards (FAR, Part 36), a record well of 11 p.m. and 7 a.m. - has been cut Logan International Airport, as above the 49 percent national average. in half, reflecting Logan's nighttime it enjoyed continued prosperity The Massport Noise Abatement restriction and the carriers’ exceptional •: in air service, remained the nation's Office, comparing computer-generated record of compliance, 86 percent, in leading airport in noise abatement in noise “ maps" from 1976 with those use of quieter aircraft permitted to fly L FY81. Two out of every three operations for 1980, found that its efforts had at night. ja at Logan were conducted on aircraft produced noticeable relief to 65,000 Logan's superior noise compliance i that met or exceeded federal noise stan people living near Logan. is due in large part to cooperation o Even more dramatic, the number of between Massport and the airlines, people experiencing loud airport noise at n ig h t- between the sleeping hours I Diane J Modica Carolyn S. Walden Charles C. Snyder. Jr. Government Affairs Coordinator Public Affairs Specialist Assistant Manager. Noise Abatement Office especially those that have entered the Logan, when the FAA authorized an occasionally heated, that dialog has Boston market since 1979. In virtually "over-the-water” takeoff route for air reduced both tension and noise, allow every case, the new carriers have craft previously flying over homes, ing Massport to resolve competing agreed to retrofit, re-engine, or replace schools, and businesses. interests peacefully as it maintains the their Boston aircraft In less time than Historically, airports and neighbor highest quality of air service for the required by federal noise laws. ing communities have been frequently people of New England. Cooperation among Massport, the locked in disputes that impeded aviation community, and the Federal Aviation objectives. With the advent of an active Administration (FAA) also led to major noise abatement program and strength noise reduction for residents south of ened community relations established by Massport Director Davis, a positive dialog at Logan was begun. While “ w hile Massport is largely a private enterprise, we take our public responsibilities seriously. We are more than sympathetic to the problems of women, minorities, the community, and small business. We actively involve them in our woik, giving them an equal opportunity to benefit from Massport’s financial strength. Patrick B.Moscaritolo Governmental and Public Affairs Director Patrick B. Moscaritolo Jane R. Deutsch Governmental and Public Affairs Director Personnel Director eaffirming a commitment Massport worked with Eastern Air The Authority to progress. Unlike other lines to bring tw o new minority-owned worked closely with R organizations, public and pri airport shops to Logan’s Southwest community leaders to vate. Massport maintained and Terminal, published the area's first resolve a wide range expanded its commitment to equal "Women’s Business Directory” to of issues peacefully, opportunity. Over the past two years, aid the Authority and others in including: rerouting the Authority, through special pro locating over of truck traffic in South Boston, guide- Y grams, purchased $5.3 million in 300 firms owned lines for reuse of Hoosac Pier in goods and services from businesses by women, and hired Charlestown, continuation of the owned by women and minorities. the first female ship removal of lead paint from Tobin Memo superintendent in the rial Bridge, and conservation of wet- Port of Boston. Richard R Meyer Marcella A. Lancome Kathleen F Hagan Labor Relations Director Compliance Director Small Business Export Program Manager ands and farmland at Hanscom Field. (Since the last fiscal year, Massport’s dozen firms chosen for the SBEP over Massport also continued to lend total personnel inched up only eight seas trading missions have tallied over ¡support to numerous nonprofit organ positions - less than one percent.) $5 million in foreign sales. The pro izations and activities in noise-affected Finally, the innovative Small Business gram's success made it a model for a Communities and maintained its prac Export Program, SBER initiated by nationwide effort launched by the fed tice of hiring residents of those Massport and the eral government. sommunities - they now constitute Smaller Business ane-fourth of the Authority's work force. Association of New England in 1977, remained successful. In all, the nearly four MASSPORT BOARD MEMBERS Robert M. Weinberg, Ann M. Hershfang, out Denis A. Blackett, Vice- Dr. Arthur Gelb is president |: Chairman of the Board, going* Vice-Chairwoman Chairman of the Board, is and technical director of The ' directs the Public Manage of the Board, is a member of president and founder of Analytic Sciences Corpora- ]• ment Program at the School the Board of the League Housing Innovations, Inc., a tion (TASC), in Reading, of Management, Boston Uni of Women Voters of Boston, Boston real estate firm Massachusetts, a 500-per versity. He has a background where she chairs the trans which has built and rehabili son research and develop in government service-at portation and financing tated over $80 million ment firm involved in local, state, and federal government committees. worth of housing in Boston modern computer-oriented ¥ levels. Former special coun A former member of the and other cities since 1966. systems engineering and sel to Boston Mayor Kevin League of Women Voters of Formerly a practicing archi systems analysis. He was White (1969-1972) and Massachusetts, she directed tect who once worked with previously associated with head of the Mayor's policy a study of transportation Mies van der Rohe, he the American District Tele staff, he was also vice chair planning and financing In sewed (1963 to 1966) as an graph Company, the MIT man of the Boston Industrial the Commonwealth. She is urban designer and planner Instrumentation Lab (now Development Financing currently a member of the with the Boston Redevelop the Charles Stark Draper f Authority. Previously, he Joint Regional Transporta ment Authority. There, he Lab), and Dynamics served as an assistant direc tion Committee, the advisory played a major role in the Research Corporation. Fie tor of the Bureau of the body that oversees all trans effort to achieve a balanced was one of the original Budget for the State of portation planning in the transportation system in the directors of the Governor's Illinois, and from 1966 to Boston region. She Is also metropolitan Boston area. Management Task Force, 1968 was with the U.S. vice-president of the He holds a bachelor of assisting in the preparation Bureau of the Budget. He National Organization to architecture degree and a of "A Management Plan for holds an MBA degree from Insure a Sound-controlled master of civil engineering Massachusetts.'' A graduate Harvard Business School Environment (NOISE), In degree from Massachusetts of City College of New York, and a JD degree from Har charge of its relationships Institute of Technology, and he also received a masters vard Law School. His term with industry. She was the won a Fulbright Scholarship degree in applied physics on the Board expires first woman to serve on the to study in Italy in 1962. The from Harvard University June 30,1984. Massport Board. A resident first black member of the and a doctorate in systems of Boston’s South End, she Massport Board, his term engineering from the Mas holds an AB in history from expires June 30,1982. sachusetts Institute of Tech Radcliffe College and an nology. His term expires MEd from Tufts University. June 30,1983. Her term expired June 30,1981. 1 *On June 30.1981. Ms. Hershfang was suc ceeded by Mr. Robsham.The Board consists of seven members appointed on a one-every-year basis by the Governor of Massachusetts. Mem bers serve without compensation for a term of seven years. 26 John A. Vitagliano is Com- William F. Lyden is serving David S. Paresky is presi E. Paul Robsham.the new nissioner of the Boston on the Board for the second dent and chairman of the est member of the Board, is ^arks and Recreation time, having been a member board of Crimson Travel Ser president of Robsham Department, the agency from 1972 to 1977. Vice- vice, a New England travel Industries, Inc., a ,/vhich operates and main- president and organizer for agency. The company, which Framingham real estate :ains the City’s public parks, the International Brother he founded in 1965, has development, general con alaygrounds, swimming hood of Teamsters, Local over 300 employees and 12 tracting, and properly man aools, cemeteries, and recre Union #25, he is also direc offices serving the Boston, agement company he ational programs. Previously, tor of DRIVE, Democratic Cambridge, and metropoli founded in 1950. His firm ae served as Commissioner Republican Independent tan areas. A Phi Beta Kappa has built homes, apartment, of the City's Housing inspec- Voter Education, for the graduate of Williams Col industrial, and office build :ion Department, manager of union. Lyden is also adminis lege, Paresky was a student ings in the South Middlesex .East Boston Little City Hall trative assistant to the Local instructor in economics as county area where It owns '1972 to 1976), and execu president and business an undergraduate. He holds and operates various hotel tive director of the Massa agent, and a trustee of its an MBA from Harvard Busi and residential properties. chusetts Air Pollution and health and welfare fund. He ness School and a JD from A member of the National Moise Abatement Commit serves as vice-president to Harvard Law School. He is a Association of Home tee. A former consultant to the International Teamsters member of the Massachu Builders, the National Insti the Boston Transportation union, as well as a represent setts Bar Association, the tute of Real Estate Boards, Planning Review and mem ative to both the Interna Greater Boston Chamber of and the Institute of Real ber of the board of directors tional and New England Commerce, the American Estate Management, he has "or the Boston Department Teamsters’ Airline Divisions. Society of Travel Agents, and received awards for his pro of Health and Hospitals, he He is a member of the board the New England Chapter fessional work from Life, - is the only licensed pilot on of directors for the Massa of the Young Presidents’ Fortune, and Better Homes the Massport Board. He chusetts Bay United Fund. A Organization. He also serves and Gardens magazines. He aolds a bachelor of science native of Maine, Lyden and on the board of directors of has been active for many Jegree in electrical engi his wife make their home in •the Governor’s Management years in the Boy Scouts of neering from Northeastern East Weymouth, Massachu Task Force and the Massa America. A trustee of the University. A native of Win- setts; they have eight chil chusetts Board of Regents, University of Massachusetts, throp, he and his wife and dren. His term expires and is a trustee of the New he is a member of its Execu two children live in East June 30,1986. England Medical Center tive Committee and its Presi Boston. His term expires Hospital. His term expires dent’s Advisory Council. He June 30,1985. June 30,1987. holds a bachelor of science degree from Calvin Coolidge College and studied educa tional guidance at Boston College Graduate School. His term expires June 30,1988. 27 MASSACHUSETTS PORT AUTHORITY We have examined the balance sheets of Massachusetts Port Authority as of June 30,1981 and 1980, and the related statements of income and changes in retained earnings and changes in financial position for the years then ended. Our examinations were made in accordance with gener ally accepted auditing standards and, accordingly. Included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. In our opinion, the financial state ments referred to above present fairly the financial position of Massachusetts Port Authority at June 30,1981 and 1980, and the results of its operations and the changes in its financial position for the years then ended, in conformity with generally accepted accounting principles applied on a consistent basis. Boston. Massachusetts August 26,1981 MASSACHUSETTS PORT AUTHORITY BALANCE SHEETS, JUNE 30,1981 AND 1980 r Assets 1981 1980 $ g g Q (In Thousands) Cash (Note C) $ 346 Investments in U.S. Government obligations and certificates of deposit at amortized cost, which approximates market, including accrued interest (Note C) 85,717 99,768 Accounts receivable, less allowance for doubtful accounts of $401,000 in 1981 and $339,000 In 1980 9,306 7,364 Prepayments and other assets 3,802 3,887 99,415 111,365 Investments in facilities (Note D): Facilities completed: Airports 394,027 381,431 Bridge 51,894 46,382 Port (Note G) 67,184 53,326 513,105 481,139 Less accumulated depreciation (156,946) (138,574) 356,159 342,565 Construction in progress 33,214 13,940 Net investment in facilities 389,373 356,505 $488,788 $467,870 Liabilities Accounts payable and accrued expenses 11,479 8,476 Accrued pension cost (Note F) 7,211 7,448 Accrued interest payable 8,112 8,173 Funded debt (Note E) 235,295 237,640 262,097 261,737 Deferred income 1,619 1,462 Contingent Liabilities and Commitments (Note G) Fund Equity (Notes B and C) Retained earnings 193,384 178,453 ' Contributed capital, grants-in-aid of construction 31,688 26,218 204,671 \ Total fund equity 225,072 $488,788 $467,870 The accompanying notes are an integral part of these financial statements. 29 MASSACHUSETTS PORT AUTHORITY STATEMENTS OF INCOME AND CHANGES IN RETAINED EARNINGS FOR THE YEARS ENDED JUNE 30,1981 AND 1980 1981 1980 (In Thousands) Revenues (Note B): Tolls, fees and sales of services $ 48,774 $ 45,824 Rentals 24,555 21,665 Concessions 22,445 21,442 Income on investments 10,547 11,152 Other 725 789 107,046 100,872 Expenses (Note B): Operations and maintenance 40,643 37,104 Administration 10,613 9,113 Insurance 1,212 1,307 Pension cost (Note F) 2,426 2,407 Interest on funded debt 16,224 16,346 In lieu of taxes (Note H) 4,351 4,077 75,469 70,354 Income before depreciation 31,577 30,518 I 1 Depreciation, Including $1,726,000 in 1981 and $1,436,000 in 1980 on assets acquired with contributed capital, grants-in-aid of construction 18,372 17,105 Net Income 13,205 13,413 |, Add credit arising from transfer of depreciation to contributed capital 1,726 1,436 Retained earnings beginning of the period 178,453 163,604 Retained earnings end of period $193,384 $178,453 | ------' \ * The accompanying notes are an integral part of these financial statements. 30 MASSACHUSETTS PORT AUTHORITY STATEMENT OF CHANGES IN FINANCIAL POSITION FOR THE YEARS ENDED JUNE 30.1981 AND 1980 1981 1980 (In Thousands Funds provided from: Net Income $13,205 $13,413 Adjustments for noncash transactions: Depreciation 18,372 17,105 Funds provided from operations 31,577 30,518 Contributed capital, grants-in-aid of construction 7,197 6,637 Increase in deferred income and liabilities other than funded debt 2,862 378 Total funds provided 41,636 37,533 Funds applied to: Cost of facilities 51,240 30,872 Retirement of funded debt 2,345 4,840 Increase in other assets 1,858 335 Total funds applied 55,443 36,047 Net Increase (decrease) In cash and Investments ($13,807) $ 1,486 The accompanying notes are an integral part of these financial statements. MASSACHUSETTS PORT AUTHORITY NOTES TO FINANCIAL STATEMENTS The Massachusetts Port Authority is a Depreciation is provided on the Presented below are the fiscal 1981 public instrumentality created by an straight-line method based on esti and 1980 revenues and operating Act of the legislature of the Common mated useful service lives of the related expenses as determined in accordance • wealth of Massachusetts (Enabling assets beginning generally in the fiscal with the Trust Agreement and a Act), effective June 21,1956. The year during completion of construc reconciliation to income before depre Authority has no stockholders or tion. Depreciation has been computed ciation as presented in the Statements equityholders. The provisions of the on facilities which have been recorded of Income and Changes in Retained Enabling Act and the 1978 Trust in the accounts of the Authority, Earnings. Agreement, (Trust Agreement) with the including those financed by grants for Under the provisions of the Trust Authority’s bondholders govern the dis construction. Agreement all revenues derived from position of cash revenues to the various The adoption of these practices has operation of the Tobin Memorial funds established under the Trust no effect upon the disposition of cash Bridge, all aircraft landing fees and Agreement and restrict the use of such revenues of the Authority which is motor vehicle parking fees derived revenues credited to the various funds. determined in accordance with provi from the operations of the airport prop A. Accounting Principles: sions of the Enabling Act and the Trust erties, and all income from investments The Authority has adopted the account Agreement. (See Note B.) are pledged for the debt sevice ing principles prescribed in an Industry B. Revenues and Operating requirements of the Revenue Refund- i Audit Guide, Audits of State and Local Expenses as Determined by ing Bonds, Series 1978. Governmental Units, issued by the Accounting Practices To the extent that pledged revenues Committee on Governmental Account Prescribed by the Trust Agreement: exceed debt service requirements, they ing and Auditing of the American Insti The provisions of the Enabling Act and are available to meet operating tute of Certified Public Accountants the Trust Agreement with the Author expenses and for transfer to other (Committee) in the preparation of its ity’s bondholders prescribe certain funds. To the extent unexpended, these financial statements. accounting practices to be followed in amounts continue to be available for Facilities are carried at cost, and maintaining the accounts and records the debt service requirements of the include the expenditure of Federal of the Authority. Revenue Refunding Bonds, Series Aviation Administration and Economic Under the Trust Agreement cash rev 1978, if pledged revenues are insuffi Development Administration grants- enues of the Authority, after providing cient to provide the debt service in-aid of construction and the cost for required debt service costs on the requirements in any year. At June 30, of significant renewals and better Revenue Refunding Bonds, Series 1981, unexpended pledged revenues ments. Expenditures for repairs and 1978, from pledged revenues, are remaining in fund balances, excluding maintenance are charged to expense transferred to the Operating Fund. After 1978 Debt Service Fund, were as incurred. providing for operating expenses, $20,426,000. including transfers to the self-insurance account, cash revenues are then trans ferred to the Port Properties Fund, the Maintenance Reserve Fund, In Lieu of Taxes Fund, and the Improvement and Extension Fund. Cash and investments held in the Improvement and Extension Fund, to the extent designated by the Authority, are transferred to the Capital Budget Account. 32 Fiscal Fiscal 1981 1980 Airport Port Investment Combined Combined Bridge Properties Properties* Income Total Total Revenues: (In Thousands) Pledged $5,923 $30,976 $ - $10,547 $ 47,446 $ 47,217 Unpledged 41,800 17,800 59,600 53,655 $5,923 $72,776 $17,800 $10,547 $107,046 $100,872 Operating expenses: Operations & maintenance $1,564 $23,147 $15,932 $ 40,643 $ 37,104 Administration 663 6,621 3,329 10,613 9,113 ■Insurance 183 830 449 1,462 1,682 Pension (Note F) 284 1,751 628 2,663 2,631 $2,694 $32,349 $20,338 $ 55,381 $ 50,530 ! Excess of revenues over operating expenses 51,665 50,342 ' Deduct interest on funded debt and in lieu of taxes less self-insurance and pension costs 20,088 19,824 Income before depreciation $ 31,577 $ 30,518 »None of the revenue from Port Properties is available for debt service other than interest and principal for all bonds Issued for paying the cost and Improvements to Port Properties. Under the Enabling Act, the revenue from Port Properties, after certain deductions as defined therein, is to be paid to the Commonwealth of Massachusetts (Note u). 33 MASSACHUSETTS PORT AUTHORITY NOTES TO FINANCIAL STATEMENTS ------i C. Cash and Investments: E. Funded Debt: The following summarizes the Authority’s cash and investments at June 30, Funded debt at June 30,1981, is 1981, by the various funds and accounts established under the 1978 Trust comprised of: Agreement with the Authority’s b o n d h o ld e rs . ______Revenue refunding bonds, series 1978:1 .! S Cash Investments Total Maturity on Interest (In Thousands) July 1 Rate Amount ! Use defined for specific purposes: ______/ 1978 Debt Service Fund $196 $27,756 $27,952 (In Thousands) Operating Fund, including Serial bonds: appropriations for self insurance 78 3,407 3,485 1981 5.40% $2,475 Maintenance Reserve Fund 3 18,546 18,549 1982 5.60 2,610 In Lieu of Taxes Fund 1 2,983 2,984 1983 5.70 2,760 Capital Budget Account 312 33,025 33,337 1984 5.80 2,935 1985 5.90 3,105 1 $590 $85,717 $86,307 1986 6.00 3,300 1987 6.00 3,505 See also Note B for the amount of unexpended revenues at June 30,1981. 1988 6.10 3,720 1989 6.20 3,955 1990 6.30 4,000 D. Investments in Facilities and Depreciation: 1991 6.40 4,265 Investments in facilities at June 30,1981 and 1980, comprise: 1992 6.50 4,545 1993 6.60 4,840 1981 1980 1994 6.70 5,165 (In Thousands) 5,520 L Facilities completed: 1995 6.80 5,905 Land $ 61,119 $ 59,305 1996 6.80 6,305 Bridge 51,184 45,804 1997 6.90 Buildings 279,065 263,973 68,9101 Runways & other paving 105,422 97,847 Machinery & equipment 16,315 14,210 Term Bonds: Accumulated depreciation (156,946) (138,574) 1998-2012 7.125% 166,385 356,159 342,565 Construction in progress 33,214 13,940 Total funded debt $235,295 i $389,373 $356,505 ------1 Asset lives used in the calculation of depreciation are as follows: Bridge 100 years Airport facilities — buildings, runways and other paving 25 years Port facilities — buildings and piers 25 years Machinery and equipment 10 years I I 34 Pension Costs: The accumulated plan benefits and before payments are required in i July of 1978, the Massachusetts plan net assets at January 1,1980, are future years. ■gislature passed legislation which as follows: Contractual Obligations for /as enacted as Chapter 4 87 of the Construction: lassachusetts Acts of 1978 and signed Actuarial present value of accumu Contractual obligations for construc ito law on July 18,1978. This enact- lated plan benefits: tion were approximately $31,774,000 lent provided for the establishment Vested $17,528,000 at June 30,1981. fthe “ Massachusetts Port Authority Nonvested $ 520,000 H.In Lieu of Taxes: mployees' Retirement System,” a The Enabling Act authorizes and ©ntrlbutory retirement system that is $18,048,000 directs the Authority, subject to certain ?parate from the Massachusetts State standards and limitations, to enter into mployees' Retirement System. Prior Net Assets Available for benefits agreements to make annual in lieu of ) this enactment Authority employees $ 7.484,000 tax payments to Boston, Chelsea, and /ere members of the state employees' Winthrop. /stem and the funding of the pension The weighted average assumed rate These agreements and annual exten ability was on a “ pay as you go” of return used in determining the actu sions currently provide for payments in lethod. Pursuant to this enactment the arial present value of accumulated plan the base amounts of $3,500,000 to mployees’ present rights and benefits benefits was 6%. Boston, $160,000 to Chelsea, and /ere transferred to the new system G. Contingent Liabilities and $135,000 to Winthrop, subject to ad the Authority established a sepa- Commitments: annual adjustment through 1986 by ite pension fund. The Authority funds Payments to the Commonwealth of reference to an index related to the ension costs based on the actuarially Massachusetts for Port Facilities: consumer price index and Logan Air etermined annual pension expense As consideration for the Port Prop port commercial passenger enplane- /hich includes current service costs erties acquired from the Common ments. The agreements extend from id the amortization, over a 20-year wealth on February 17,1959, the fiscal 1986 through fiscal 1991, eriod, of unfunded prior service costs, Authority is required by the Enabling although the amount of in lieu of tax his annual pension contribution, as Act to pay annually to the Common payments during this extension is irtua daily calculated, includes a factor wealth an amount contingent upon subject to the results of best efforts )r the reimbursement to the Com- cash revenues from the Port Properties negotiations. The annual payments are aonwealth for amounts expended by for the preceding fiscal year exceeding not to exceed the balance of revenues re Commonwealth on account of the certain related cash expenditures until remaining after deposits to the uthority's employees retired prior to the Authority has paid an amount as 1978 Debt Service Fund, payments anuary 1,1979. defined in the Enabling Act. At June 30, to the Commonwealth (see Note G), ■ For the financial statements pre- 1981, the amount contingently payable and the deposits to the Maintenance ared in accordance with generally to the Commonwealth, not reflected in Reseive Fund. ccepted accounting principles, pen- the financial statements aggregated ion expense includes current service $17,792,000. Included in investments ost and amortization of past service in facilities are payments of $899,000 osts determined as at July 1,1973, made to the Commonwealth for these ver a 25-year period commencing in Port facilities. seal 1974. Total pension expense so Cash expenditures from these etermined was 52,426,000 in fiscal properties exceeded related revenues 981 and $2,407,000 in fiscal 1980. by $9,471,000 in fiscal 1981, which amount has been added to such prior years' deficiencies of $36,713,000. The cumulative cash deficit of $46,184,000 is to be applied against future Port Properties net revenues 35 MASSACHUSETTS PORT AUTHORITY PROPERTIES & PERFORMANCE Logan International Airport Port of Boston Marine Terminals Gross revenues, 14.7 million passengers, total 757,900 tons of containerized cargo* Authority-wide $107.1 million 12.6 million, domestic $2.3 billion in container trade 2.1 million, international Paul W. Conley Terminal Net revenues 47.8 million 507.8 million pounds of airfreight (formerly Castle Island) Net of expenses; and mail 269,031 tons, containerized* does not include inter 65.1 percent compliance with federal 61,053 imported automobiles est on funded debt or noise standards, FAR-Part 36 depreciation. 36 Moran Container Terminal Hanscom Field,civilian only Hoosac Pier 488.869 tons, containerized 205,517 general aviation operations (Developer under consideration) $1.4 billion in container trade Boston Fish Pier East Boston Piers Massport Marine Terminal 85.0 million pounds offish processed (Lease agreement signed with (Under construction) 34.0 million pounds landed Boston Redevelopment Authority) Dbin Memorial Bridge Development Properties ‘ Includes term inal leased to private operator at 5 2 million vehicle crossings Commonwealth Pier Conley Terminal. (Developer under consideration) Massport 99 High Street Boston, Massachusetts 02110 Telephone 617/482-2930 Telex 94-0365 Massport/Europe Lt. Lippenslaan 66 2200 Borgerhout. Belgium Telephone 31/36-56-95 Telex 35225 Massport/Far East New Diamond Building 4-4 Kasumlgaseki Chiyoda-Ku, Tokyo, 100 Telephone 0 3/506-5204 Telex 24957 Massport/New York One World Trade Center Suite 8747 New York, NY 10048 Telephone 212/432-0352 This report was produced by the Massport Public Affairs Depart ment. Charity Brown, Publications and Research Director. We wish to acknowledge the following for their assistance: Design: Cheryl Heller, HBM Design Group Photography: Nubar Alexanian, assisted by Paul O'Grady Typesetting: Typographic House Printing: Daniels Printing Company Editorial: Daniel B. Payne