MTA Not Maximizing Real Estate Portfolio
Real estate is a sector that has major ties to the MTA & its overall financial picture. Whether it comes from properties they use or own, the fabric of the MTA’s finances good or bad are woven deeply in it. Clearly over the last couple of years, real estate has not been kind to them especially in terms of real estate taxes.
One official who has been critical of the MTA is New York State Comptroller Thomas DiNapoli who has released many audit reports on different facets of the agency. His latest audit report focuses on you guessed it, real estate. Before getting to the report, here is a take on it from Tom Namako of the New York Post:
The cash-strapped MTA has squandered a fortune in botched real-estate transactions — failing to collect millions in outstanding rent, refusing to charge interest on that money, and hanging onto lucrative air rights over some property, a bombshell investigation found.
These revelations come on the heels of the most drastic subway and bus service cuts in decades aimed at saving $93 million — and ahead of a planned fare hike next year.
“New Yorkers can’t afford to pay more while the MTA ignores potential cost savings,” said state Comptroller Thomas DiNapoli, whose scathing report was obtained by The Post. “But that’s exactly what has happened here.”
The report’s findings are damning.
Between January 2005 and August 2009, the MTA didn’t collect a whopping $9 million in back rent from nearly 1,000 commercial tenants — and no interest or penalties were ever charged.
In New York City alone, MTA brass never attempted to sell $12 million worth of air rights over rail yards that could be used for commercial structures — even though they hired Massey Knakal Realty Services in 2006 to consult on the matter.
And the agency pays more than $6 million each year on upkeep of two nearly vacant buildings: the agency’s former headquarters on Jay Street in Brooklyn, and another in Mineola, LI.
Click here for the complete report.
Now let’s take a look at the official press release for Mr. DiNapoli’s latest audit report:
The Metropolitan Transportation Agency (MTA) is missing significant opportunities to save money and generate greater revenues through its vast real estate portfolio, according to an audit New York State Comptroller Thomas P. DiNapoli released today. DiNapoli’s audit found the MTA routinely spends more than $25 million a year on rent without assessing whether some of its vacant properties can meet its office space needs. The MTA also did not have a strategic plan for marketing its real estate holdings, and had not met the Public Authorities Law reporting requirements to publish a list of the holdings until June 2010.
“Millions of New Yorkers rely on the MTA,” DiNapoli said. “Those New Yorkers can’t afford to pay more while the MTA ignores potential cost savings. But that’s exactly what has happened here.
“Before making drastic service cuts and talking about fare hikes, the MTA has to maximize the value of its real estate holdings by advertising their availability and ensuring that it’s receiving market-rate rents for prime properties. The MTA should also publish a full list of its real estate holdings as required by law and let New Yorkers know how it’s going to capitalize on these assets.”
The audit, which covered the period between January 1, 2005 and August 31, 2009, is the latest DiNapoli effort to identify cost-saving opportunities for the MTA, which this week implemented a series of service cuts that are disruptive to the commuting public.
Auditors found that the MTA generates revenues of $199 million a year from real estate-related activity but has the potential to earn much more. The agency owned 600 vacant rental units as of March 2009, including six large retail spaces in the 42nd Street/Sixth Avenue subway station, but only three vacancies had been advertised on the MTA’s web site. One property had remained unoccupied for 14 years. In addition, current tenants in MTA-owned properties were not charged interest or late fees on overdue rent or charged increased rents when the lease expired.
The MTA had also lost $1.7 million in rental revenue, in addition to paying a $625,000 penalty to a tenant because the MTA could not meet certain provisions in the lease. There was no evidence that the MTA conducted a study assessing its ability to meet the lease provisions before accepting the request for the provision. Auditors also found that the MTA could improve the accuracy and completeness of its database for tracking real estate holdings.
Additionally, DiNapoli’s audit found:
* Non-government tenants owed the MTA a total of $9 million in rent during the audit period;
* The MTA did not effectively market the space above certain properties (known as ‘air rights’), despite estimates that the rights could generate more than $12 million in revenue;
* Six large rental units in the 42nd Street/Sixth Avenue subway station at Bryant Park had been vacant since 2004;
* The MTA does not ensure its rents are competitive with market values and does not charge interest and late fees when appropriate;
* Two of the agency’s buildings—one vacant and one nearly-vacant—cost more than $6 million to maintain; and
* More than one-quarter of the MTA’s occupied rental units sampled were not rented through the required competitive rental processes.
DiNapoli recommends that the MTA:
* Create a single MTA real estate portfolio management system that comprises information from all five existing databases;
* Develop a strategic marketing plan to properly advertise its available spaces; and
* Improve rent collection by charging interest and late fees.
The MTA called DiNapoli’s audit a timely one, and agreed that the agency must explore new ways to generate revenue through its real estate holdings.
Click here to download the complete 46 page report in .pdf format. I will review it & have an analysis sometime over the weekend.
The report should prove interesting as it has been commonly known that the MTA does not exactly make the best decisions in terms of its real estate holdings.
xoxo Transit Blogger
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MTA CEO: We Will Not Raise Fares This Year
Earlier today, MTA Board Chairman & CEO Jay H. Walder appeared on the John Gambling show to discuss the current state of the MTA in terms of finances & service cuts. During his appearance, he announced that the agency will be sticking to its schedule & not increasing fares this year. Plans are still in place for MetroCard & commuter train tickets to rise in January 2011.
Let’s first take a look at a report by Pete Donohue which will appear in tomorrow’s New York Daily News:
The MTA will not raise fares ahead of schedule but will stick to its plan to hike MetroCard and commuter train tickets in January, Chairman Jay Walder said yesterday.
“It will not come earlier,” Walder said. “We’re going to hold to the schedule.”
Walder’s comments on the the John Gambling Show on WOR am radio marked the first time he said unequivocally that fares would not increase this year. The top executive at the Metropolitan Transportation Authority previously said the agency intended to stick to the 2011 schedule.
The MTA’s four-year financial plan envisions fares and tolls going up by 7.5%. It’s expected to be higher because of state budget cuts and weak tax revenues.
Click here for the complete report.
Click here to download the podcast from Mr. Walder’s appearance today on the John Gambling Show. The podcast is just shy of 24 minutes long.
This will probably be celebrated by a few but realistically it is not a big deal as January 2011 is right around the corner. If the bill that passed the State Senate gets through the Assembly, I would expect the fare hikes to be even greater.
xoxo Transit Blogger
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LIRR Service To Dave Matthews Band At Citifield
A short time ago, the MTA Long Island Rail Road (LIRR) announced it will be providing service to the Dave Matthews Band concerts at Citifield on July 16th & 17th. Here are the complete details courtesy of the press release they sent me:
There’s no reason to fight traffic in order to enjoy an evening of the music you enjoy. Taking the MTA Long Island Rail Road to see the Dave Matthews Band at CitiField will get you there a lot faster than “Ants Marching,” so you can “Stay” and have a “Good, Good Time.” On July 16 and July 17, the LIRR will provide eastbound and westbound train service to the Mets-Willets Point Station before and after the concert. To save time, concert-goers are advised to purchase round-trip tickets prior to boarding.
The train ride is just 18 minutes from Penn Station. For those traveling from Long Island, the Mets-Willets Point stop is just six minutes from Woodside, 16 minutes from Great Neck and 27 minutes from Port Washington. The trains will operate on a regular Mets game schedule as follows:
Friday, July 16:
Eastbound: Departing Penn Station at: 3:49 PM, 4:25 PM, 4:46 PM, 5:14 PM, 5:29 PM, 5:50 PM, 5:56 PM, 6:14 PM, 6:42 PM, 7:14 PM, 7:49 PM, 8:19 PM, 8:48 PM, 9:18 PM, 9:48 PM, 10:18 PM, 10:48 PM, 11:18 PM, 11:48 PM, 12:19 AM (Saturday)
Westbound: Departing Port Washington at: 4:06 PM, 4:36 PM, 5:00 PM, 5:23 PM, 6:24 PM, 7:09 PM, 7:39 PM, 8:09 PM, 8:39 PM, 9:09 PM, 9:39 PM, 10:09 PM, 10:39 PM, 11:39 PM, 12:40 AM (Saturday); The following trains will originate at Great Neck: 5:44 PM, 6:04 PM, 6:20 PM, and 6:44 PM.
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Saturday, July 17:
Eastbound: Departing Penn Station at: 4:19 PM, 4:52 PM, 5:19 PM, 5:52 PM, 6:19 PM, 6:52 PM, 7:19 PM, 7:52 PM, 8:19 PM, 8:52 PM, 9:19 PM, 9:52 PM, 10:19 PM, 10:52 PM, 11:19 PM, 12:19 AM (Sunday).
Westbound: Departing Port Washington at: 4:10 PM, 4:43 PM, 5:10 PM, 5:43 PM, 6:10 PM, 6:43 PM, 7:10 PM, 7:43 PM, 8:10 PM, 8:43 PM, 9:10 PM, 9:43 PM, 10:10 PM, 10:43 PM, 11:40 PM, and 12:43 AM (Sunday).
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Concert-goers traveling from branches other than Port Washington can reach Mets-Willets Point by taking a regularly scheduled train to Woodside Station, then changing to an eastbound Port Washington Branch train. Since Mets-Willets Point is located in Zone 1, tickets to that zone from outlying stations are valid to Mets-Willets Point.
However, passengers must retain their ticket stubs and inform ticket collectors of their intention to travel to Mets-Willets Point Stadium. Customers must hold onto their tickets, which will be collected at Mets-Willets Point after they disembark.
The LIRR’s Mets-Willets Point Station is not handicapped accessible. The subway Flushing Line Mets-Willets Point station is accessible via the Queens-bound local platform, with an ADA ramp connecting to the sidewalk on the south side of Roosevelt Avenue. LIRR Customers with mobility impairments who are traveling to see the Mets should travel to Woodside Station.
At Woodside Station, which has elevators, customers should transfer to a Flushing-bound #7 subway train to the Mets-Willets Point subway stop, and then use the ramp to reach Roosevelt Avenue, across from the ballpark. To return to Woodside after the game, customers with mobility impairments should board the #7 subway and travel one stop east to its end point, the Flushing-Main Street Station. There, after a brief wait on the train, the train will head west to Woodside. This is necessary due to the location of the ramp, which will only permit access to the eastbound platform.
xoxo Transit Blogger
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MTA Statement On 10th Av Station For 7 Line Ext.
The 7 line extension is back in the news again as Mayor Bloomberg feels confident that the city can still build a 10th Ave station as part of the 7 line extension. Readers of this blog know how critical I have been of this project overall over the last couple of years. The only positive aspect I saw of it was the 10th Ave station & of course, that was the one part of the project in doubt throughout the process.
Let’s take a look at the new confidence of Mayor Bloomberg courtesy of a report by Michael Howard Saul for the Wall Street Journal:
Mayor Michael Bloomberg said Wednesday he is “confident” the city can preserve the ability to build a second subway station as part of the extension of the No. 7 subway line in Manhattan, a move that follows aggressive lobbying from the real-estate industry and the City Council.
“We need engineers to confirm that it’s viable, but we’re confident we’ve found a way to keep the prospect of a future Tenth Avenue station alive without delaying the current extension,” Bloomberg said in a statement.
The city, which agreed to pay for the extension for the cash-strapped Metropolitan Transportation Authority, is spending $2.1 billion to extend the No. 7 line from Times Square to 34th Street and 11th Avenue. The city originally planned to build a second station at 10th Avenue and 41st Street but scrapped it when costs skyrocketed.
As The Journal reported earlier this month, the Bloomberg administration agreed to take a second look at this issue in the wake of intense lobbying from City Council Speaker Christine Quinn and the Real Estate Board of New York.
The administration had planned to announce this spring that it would move forward with the construction of the subway line, and that it was officially closing the door on building the second station. But officials said they’ve found a simple solution that preserves the option of building the second station, if funding develops in the future.
Under the new design proposal, the new station would be built with two entrances and two separate platforms – one for eastbound and one for westbound trains. The MTA prefers now to build subways where passengers can enter at any point, no matter what direction they’re headed. But officials said the compromise preserves the option of the second station, allowing it to be built at later date without interrupting service.
The city will apply for $3 million in federal funding for an engineering study to, among other things, confirm that the new design plans for the second station are viable. Bloomberg aides stressed the funding for the station, estimated to cost about $550 million, still needs to be identified, and that the city has no intention of forking over the cash.
“Our priority has always been extending the train to the Hudson Yards area to help spur major commercial and residential growth there, and we’re on track to complete it by the end of 2013,” Bloomberg said.
“The city is in no position to step in and pay for a Tenth Avenue station too,” he added, “but it will be good news if we can finish the current extension without closing off the possibility of it happening in the future.”
Click here for the complete report.
Shortly thereafter, the MTA sent out a statement which I received saying:
The MTA is fully supportive of the Mayor’s proposal to seek federal funding to study the viability of building out a Tenth Avenue station in the future. While neither the City or MTA can fund the station due to financial constraints, we should not preclude the possibility of a station in the future. We will continue to work together to complete the extension of the 7 line on time and on budget.
I will believe the station is built when I see it with my own eyes. For now, this project is still a complete waste & does more to service cronies versus actual riders. What else is new in the world of mass transit in our region!
xoxo Transit Blogger
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Georgi Vodka Ads Removed From Brooklyn Buses
Here is the Georgi Vodka ad removed from Brooklyn buses due to complains from the Hasidic community. Photo courtesy of Alvarez for the New York Daily News.
In yet another example of people having too much time on their hand, Georgi Vodka ads have been removed from Brooklyn buses due to complains from members of the Hasidic community. Erica Pearson of the New York Daily News has more in this report:
Vodka company officials are all shaken up after the MTA pulled its racy ads from some buses in Brooklyn.
“They hardly gave us any warning. They just took them off the buses,” said Martin Silver, the owner of Georgi Vodka producer Star Industries.
“These ads are clearly not pornography. … If you don’t like what’s on a bus, all you have to do is look away and walk past,” he said outside the MTA’s bus depot on 41st St.
The ads show the back side of a woman dressed only in a bikini bottom and a woman sitting in the sand with her arms around her knees.
Click here for the complete report.
This story just pisses me off. What has our country come to when everything has become so damn politically correct? This is 2010 & believe me, nothing about that bikini ad is offensive. The woman’s buttocks in a bikini make up a small portion of the ad & is no different from what you would see at the beach. Will these same clowns who complained, protest people at the beach?
What I am about to say might piss off some but I don’t care, I am not about holding my tongue for anyone. Why does it seem when “Jews” complain, things get done? If these ads received complaints from minorities in poor neighborhoods, it is safe to assume that not much would have been done about it. While I doubt anyone within will comment on this, it is something that is not lost on people.
My statement goes beyond just bus ads as it can be asserted into any situation one could think of. For the people who think our society is about everyone being equal, here is a newsflash for you, it is not & it never will be. If you are not in with the right people, or have the money, don’t expect the playing field to be even. It is sad that our world is setup like this but that is the reality we live in.
xoxo Transit Blogger
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