Commentator Marshall on New York vs. Hong Kong: "I suspect there is pressure on the MTA to lowball properties."

The departure of the Metropolitan Transportation Authority's CEO, Jay Walder, to lead the transit agency/company in Hong Kong led journalist and urban Alex Marshall to write an op-ed in the New York Daily News about how the MTA too could operate like a profit-making company.

On the 8/5/11 Brian Lehrer Show, on WNYC, Transit Systems That Make Money, Marshall amplified his thoughts in an interview with guest host Andrea Bernstein.



Opportunity for revenues?

"Why is the Chrysler Building next to Grand Central Station?" Marshall asked rhetorically. "Why is Macy's next to Penn Station? Because it's an incredibly good location. And the only reason these giant buildings can exist is because they have these transit lines underneath them that can pump thousands of workers and shoppers into them."

Unlike in Hong Kong, where new lines are being built out, allowing for new development, such as shopping malls, New York mostly lacks such opportunity, Bernstein suggested.

Marshall agreed, but pointed to MTA projects that pose opportunities, including "Atlantic Yards here in Brooklyn," Hudson Yards, and the Second Avenue Subway. (He used the unfortunate but common shorthand of "Atlantic Yards" for the MTA property, the Vanderbilt Yard, which represents less than 40% of the Atlantic Yards site.)

In addition to direct ownership of a mall, Marshall suggested joint partnerships, and value added taxes around stations to capture wealth generated from development. "This is our public money that's helping generate this wealth," he observed.

The implication: the MTA should have held an open bidding process for the Vanderbilt Yard, rather than indicate repeatedly that Forest City Ratner had the inside track, then issue a belated Request for Proposals that generated only one response--and that because Develop Don't Destroy Brooklyn reached out to dozens of developers.

Comments: it's political

One commenter, Randi from Brooklyn, wrote:

As a former MTA employee I can tell you the challenges of the system:
1. The subway system is MUCH older. The IRT subway lines (except for the 7 train) date to the 1900s and the plan of the subway was just to transport people.... Hong Kong's subway was built in the 70s and had the luxury of preplanning.

2. The MTA does own a lot of land, but because of too much political pressure the MTA has to always low ball itself and cherry pick who they sell/lease land to.

3. The leadership issue is a problem, but that's due to the political nature of the agency. Its a state agency and the governor picks who runs it - so that means that every four years the leadership changes...

Marshall responded:

Comments 2 and 3 of Randi from Brooklyn struck me as right on. I suspect there is pressure on the MTA to lowball properties. This is a big problem, if true. Money is literally being taken out of taxpayer's pockets and put into private hands.

One caution

As I recently pointed out, Hong Kong offers some attractive examples of efficiency, but it's not an unmitigated good.

As I wrote in Urban Omnibus, A Caution on Hong Kong Envy, New Yorkers at a conference on Hong Kong enthused about the city-state's advances, but many from Hong Kong worried about the cost of progress, seeing their home as a place of enforced uniformity, with too little public participation.