(The following article by Sewell Chan was posted on the New York Times website on July 28.)
NEW YORK — Buoyed by a surge in tax revenue, the Metropolitan Transportation Authority announced today that it would have an unexpected surplus of $833 million this year and that it would consider using the money to create a giant platform over its West Side railyard in Manhattan on which a developer could build offices and apartment towers.
The authority would, in effect, enter the field of real estate development.
The surplus represents a remarkable reversal of fortunes for the authority, which in February had projected a tiny surplus for the year and large deficits starting next year. It now predicts that tax revenue and lower-than-expected costs in servicing its debt will add $493 million to the authority’s coffers by December. The authority, however, did not revise its plans to increase fares and tolls in 2007 and 2009.
The authority conceded that an earlier plan to sell the railyard rights to the Jets to build a football stadium was, for all practical purposes, dead.
But its executive director, Katherine N. Lapp, said that with a platform over the train yard, control of the 13-acre site could be sold to a developer for several billion dollars, which would pay for the authority’s construction and renovation projects.
A platform would create one of the biggest undeveloped parcels of land in Manhattan, and Ms. Lapp said it would allow a wide array of bidders to compete for the development rights.
“There are a confluence of circumstances that I would argue exist once in a lifetime,” she said. “This is like Lincoln Center in the 50’s or Rockefeller Center in the 20’s. It’s creative. It’s bold.”
Ms. Lapp also presented a more conservative alternative: Using $481 million to pay down part of the authority’s $2.2 billion unfunded pension liability that accrued over decades. That plan would save the $38 million in annual pension plan contributions.
A small part of the surplus, $12 million, will be used for immediate improvements in service and security, in a reflection of recent concerns about subway delays and the possibility of a terrorist attack.
The authority announced it would spend $6.5 million a year on an “intensive cleaning initiative” for subway stations, tracks an equipment; $3 million to add morning and early afternoon service on the Long Island Rail Road and late-night service on the Metro-North Railroad, and $300,000 to improve rail and bus connections for Staten Island commuters.
The authority, responding to two attacks this month on London’s transit system, also plans to add $10 million a year in security spending. The money will pay for police overtime, a public awareness campaign and additional platform conductors, who are trained to evacuate riders onto the tracks in an emergency.