Mobilizing the Region

Issue 226 June 25, 1999



Privatization Possibilities


The Permanent Citizens Advisory Committee (PCAC) to the Metropolitan Transportation Authority released a report in March analyzing a range of MTA privatization issues. It found that while wholesale privatization is uncalled for and could have some serious negative impacts, declining government support and increasing demands for service, infrastructure and system expansion could lead the MTA into a variety of beneficial public-private relationships.

Options in this regard include having developers contribute to capital construction projects or lease MTA property near stations; inviting more private retailers to design and maintain retail spaces in stations; expediting programs like "Adopt-A-Station" where developers contribute to station rehabs; and working with legislators to devise a tax increment financing system under which the MTA would collect revenues when its transit improvements result in real estate value increases.

The report recommends the MTA explore these techniques for a future rail hub at Sunnyside Yard (expanding the station the LIRR will build as part of its East Side Access Project), the Second Avenue Subway, and the Metro-North Hudson Line Extension. It also recommends the MTA look into selling or contracting out the Staten Island Railway to a private firm.

It points to the $12 million the MTA received from Donald Trump in connection with the massive Riverside South project as an example of how the agency presently receives only chump change from developers who build near transit: "[Trump's] complex will contain several residential buildings and bring thousands of new riders to the already overwhelmed [72nd Street] station," the report says. "Under an earlier plan for the Riverside South site, the MTA would have received approximately $40 million. The additional money...could have been used for a more ambitious station reconstruction project."

The report concludes, "As a vital public service, the MTA should remain under public management. However...the MTA can do more to meet the needs of its riders by expanding its capital construction program with the help of private funding and management."



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