Sorry Eric, Try Again!

Earlier today, Benjamin Sarlin of the New York Sun had a report about an idea City Council Member Eric Gioia had for the MTA which would help them not raise fares next year. Here is his report courtesy of the New York Sun:

The Metropolitan Transportation Authority should sell the roof over its head before raising fares on New Yorkers twice in one year, Council Member Eric Gioia said yesterday.

Mr. Gioia, a likely candidate for public advocate in 2009, is calling on the MTA to sell off the 20-story building it owns at 44th Street and Madison Avenue to raise the money necessary to avert a fare increase.

“There’s no justification for the MTA to be on Madison Avenue,” Mr. Gioia, of Queens, said at a press conference in front of the building yesterday. “This is a glaring example of an asset being underutilized.”

He estimated that the property, which contains more than 230,000 square feet of prime office space, could fetch “at least” $200 million on the open market. Mr. Gioia suggested that after the sale, the MTA should move its offices to Queens.

A spokesman for the authority, Jeremy Soffin, said selling 347 Madison Ave. is not under consideration at present but that the MTA has sold large properties in the past.

“The MTA has assessed its real estate assets and sold a number of properties to support public transportation, including the billion-dollar sale of the West Side Yards. Just as importantly, we are cutting costs by 6 percent, consolidating back office functions and integrating our bus companies to save money,” Mr. Soffin said via e-mail. “We do not have plans to sell office buildings currently required for MTA use.”

Earlier this year, the MTA raised the price of an unlimited one-month MetroCard to $81 from $76 and of a one-week unlimited MetroCard to $25 from $24.

MTA officials said recently that another fare hike may be necessary to meet a growing deficit of as much as $700 million next year due to declining tax revenues and rising fuel prices.

Khadijah Rentas of the Daily News had a brief report about it as well:

The MTA should sell off or lease its Manhattan digs before boosting subway fares and tolls, a city councilman said Sunday.

Standing in front of MTA headquarters on Madison Ave., Councilman Eric Gioia (D-Sunnyside) insisted the Metropolitan Transportation Authority could avoid the threatened fare hikes by hawking the building – which he said would go for at least $200 million. They could relocate the headquarters to – where else? – Queens, he said.

MTA officials who raised fares and tolls in March have said they may need to hike them again to plug a $500 million deficit.

An MTA spokesman said the agency already has sold properties, including the West Side rail yards.

I am trying not to laugh so hard as it is starting to hurt. I don’t know what Eric’s intentions were with this proposal, whether they were from the heart or just the typical game of trying to look good for your constituents. Either way, this idea is beyond ridiculous & would accomplish nothing but putting a small band aid on a huge cut. Lets look at the proposal deeper shall we….

First off, we are in a severely weak real estate market which favors buyers over sellers. The MTA would not get anywhere near what the property is actually worth due to today’s economy. Lets say the MTA could get the $200 million which Eric seems to think is plausible, what would that money really do for the MTA & its riding public?

They would have to turn right back around & rent a property for their headquarters. Considering the size of their current headquarters, do you know the kind of cash they will be paying for rent? A pretty penny would be the tip of the iceberg as far as a description goes. Now after spending the money on rent, we factor in the cost of moving to a new space which will not be cheap. After we are done with that, how much would be left over for the agency to put towards their budget issues? Whatever the amount is, it will be nowhere near enough to prevent a fare hike next year. Even if the MTA was to take the full mythical amount of $200 million,  it would not be enough to really accomplish anything in the long term.

The financial state of the MTA needs long term solutions, not a band aid or quick fix as in the long run those solutions will only add to the problem, not take away from it!

Eric, I just looked under a MTA bottle top & it had a message for you. Sorry, your idea was not a winner, please try again!

xoxo Transit Blogger

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