(Bloomberg) -- The Port Authority of New York & New Jersey released a new plan to replace its neglected, overcrowded midtown bus terminal, more than seven years after the transit agency first sought proposals to overhaul it.

Replacing the decaying depot, which opened in 1950 and was expanded in 1981, will take a decade at least and billions of dollars, Port Authority officials said. The new five-story terminal will be able to handle almost 40% more passengers. It will provide storage space for buses, curbing traffic congestion and pollution and gates to accommodate inter-city coaches.

The bi-state agency plans to fund the project with $3 billion in its current capital plan and the sale of air rights for as many as four new high rise towers, officials said. The agency will also seek federal aid and an agreement from the city to allow a developer to use payments in lieu of taxes to help finance the project, much like the new Moynihan Train Hall railway station.

“It’s way past time that this building be replaced,” said Port Authority Executive Director Rick Cotton.

On busy days before the Coronavirus pandemic, 260,000 commuters walked the bus station’s bleak corridors, where missing ceiling panels revealed leaky pipes. Comedian John Oliver called the bus terminal the “Single Worst Place on Planet Earth.”

Plans to replace the bus terminal were delayed by design challenges and disputes between New York Governor Andrew Cuomo and former New Jersey Governor Chris Christie over where to build and how much to spend.

In 2016, New York’s top appointee to the Port Authority wanted to build a replacement next to the NJ Transit station in Secaucus, New Jersey. Scott Rechler, the appointee, retreated after John Degnan, appointed by Christie, said he wouldn’t support the LaGuardia Airport redevelopment.

The Port Authority reviewed more than 30 sites for the bus terminal and consulted with riders and residents, who were aggravated by the congestion and pollution from the buses. Without a place to park, motor coaches circled the streets awaiting their turn to get into the terminal or idled on city streets, spewing diesel fumes.

Construction will be staged to minimize disruption to existing terminal operations and coordinated with other Port Authority projects at the Lincoln and Holland tunnels and George Washington Bridge.

(Corrects percentage in 2nd paragraph.)

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