The MTA’s real estate quandaryBy
While yesterday’s FAQ hit on a few of the big misconceptions surrounding the MTA’s current budget crisis, there is one more major topic I’d like to hit on today. That topic focuses on the MTA’s current real estate holdings and the money they could draw in.
Over the last few weeks, these holdings have been in and out of the news. Most recently, we’ve heard that the MTA still expects $1 billion for the Atlantic Yards land even as the real estate development deal falls apart. Before that, Julia Vitullo-Martin published an error-filled piece in The Daily News about the MTA’s real estate. Her premise is one that deserves some attention, if only to dispute it.
When Vitullo-Martin wrote her piece, the MTA had yet to pass this Doomsday budget they unveiled upon the New York City world this week. But her point — that the MTA isn’t making the most of its real estate holdings — remain. Basically, she asked, “Shouldn’t we first insist that the MTA take advantage of any and all underused real estate that it already owns or controls under long-term leases?”
Her problem however is that she identifies parcels that either aren’t owned by the MTA or are like the Hudson Yards lands and are already included in plans for redevelopment. The MTA disputed the article and issued a statement:
The MTA is continually assessing its real estate to identify properties, like the Hudson Yards, that can provide revenue to the MTA without disrupting service. These opportunities are limited because so much of the MTA’s real estate is operated under master lease, wherein it can only be used by the MTA for transportation purposes. Nonetheless, we continue to find new revenue opportunities and use these funds to pay for critical capital needs, with $1 billion in the 2005-2009 capital program from asset sales (and another $500 million tentatively identified in the 2008-13 plan produced during the congestion pricing debate). It is bad public policy to sell assets to pay for operating expenses in any case, and to imply that the current fiscal crisis could be avoided in this way is simply not accurate.
Basically, that statement sums it up. Is the MTA making the most of its real estate holdings, as Vitullo-Martin alleges they aren’t? The answer to that is tough to pinpoint, but the fact remains that dealing with real estate holdings is a one-off solution. Let’s say the MTA really can get a few hundred million dollars for the Jay St. holdings in Brooklyn. In today’s market, that’s highly unlikely. But what happens when the budget comes due next year, and the transit agency can no longer sell real estate to cover a budget gap?
Like many critiques of the MTA, the real estate one is a red herring. We would all prefer the MTA to make ideal use of all of their lands, but forcing them to do so now would solve the problem for just one year, if that. We need long-term solutions and not some short-term measure. Hopefully, our politicians realize this as well.