Benjamin Kabak

As part of its never-ending mission to both close a $400 million deficit and make every dollar count, the MTA has announced a new initiative that will restructure the agency’s internal communications departments and save $10 million annually. Although the savings all small, the restructuring will lead to better organizational efficiencies across its various subagencies.

“By operating the MTA as one company instead of a loose collection of agencies we can provide the most efficient and effective service to the 8.5 million New Yorkers who rely on our transportation system every day,” Jay Walder, chair and CEO, said. “Consolidating these functions is a part of our effort to overhaul how the MTA does business to make sure that we are using every dollar as wisely as possible. These actions will pool resources, streamline operations and create savings.”

The first phase of this reorganization is very much inside baseball, and it will see the MTA overhaul its call centers, media relations and communications departments. The MTA made headlines when the New York tabloids revealed that the authority had more than 100 phone numbers and five customer service call centers. A “virtual consolidation” with a voice-recognition system will reduce the number of phone numbers and allow the authority to cut back on call centers.

On the media relations front, each sub-agency has its own fully-staffed press office. The authority will now maintain a “single, centralized press office” and cut back on the staffing levels. The same holds true for the communications departments. Diana Jones Ritter, a government executive for 26 years, will oversee this restructuring.

This is certainly a praise-worthy move by the MTA, but it’s also one that shouldn’t have been borne out of a financial crisis. The various agencies — Transit, Metro-North, LIRR — had independent press offices and communications departments because they were folded into the MTA over time. Never had any head tried as Walder has to reorganize internally, and it’s a move that any independent business consultant would recommend.

For years, critics of the MTA have accused the authority of underselling its real estate offerings and not maximizing potential profits from its property holdings. In a report issued today, New York State Comptroller Thomas DiNapoli accused the MTA of doing just that. The authority, he says, doesn’t need to rent some spaces it does and hasn’t made all of its potential spaces available to rent.

Although DiNapoli used this platform to bash the MTA on service cuts, his report lacks a knockout punch.“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 Comptroller’s audit (PDF), which covers a four-year period beginning in 2005, found that the MTA generates nearly $200 million in real estate revenues per year but could do more. It accused the agency of leaving its properties, such as 370 Jay St. in Brooklyn, vacant while allowing not charging interest or late fees on missed rent payments. He bulleted his findings:

• 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.

As far as recommendations go, DiNapoli’s were fairly tame. He wants the MTA to streamline its real estate databases and portfolio management system; he wants to see a “strategic marketing plan” to make sure empty spaces are being promoted; and he would like the MTA to collect interest and late fees on missed rent payments. Considering the field day The Post had with this report, nothing DiNapoli said or recommended came as a big surprise. Left unsaid by DiNapoli as well were any details as to the city as the ultimate landlord in many cases hamstrings the MTA’s ability to administer its property with any flexibility.

For its part, the MTA acknowledged DiNapoli’s conclusions. “While MTA real estate generates nearly $200 million each year to support the transit system, our ongoing financial issues demand that we think creatively and do more,” the authority said in a statement. “We are trying new technology to increase advertising revenues, working to change regulations that limit our ability to develop our assets, and better utilizing space as we downsize. No stone can be left unturned to maximize revenues and reduce costs, and we are actively pursuing each of these initiatives.”