The turmoil surrounding Hudson Yards last month — with the Related Companies stepping in to salvage the deal in an 11th-hour, billion-dollar agreement — illustrates just how difficult it can be to do business with a state agency like the Metropolitan Transportation Authority.
But beyond the currently in-the-spotlight West Side and the Atlantic Yards site in Brooklyn, the MTA has a vast real estate portfolio.
The agency owns or leases 14,000 properties in the metro area, including 5,350 in the city. The sites include train stations, rail yards, switching facilities and other infrastructure locations. What’s more, the MTA is either selling or has recently sold a handful of them.
However, an audit of the agency’s real estate portfolio, which commercial real estate firms Massey Knakal and CB Richard Ellis conducted to get a handle on how much surplus land the MTA could sell, found that the assets it could consider selling are worth a mere $20 million combined.
“There is some value, but not a lot of low-hanging fruit,” said Tom Sheehan, senior vice president at CBRE.
“People think we are a significant holder of disposable assets,” said the MTA’s longtime real estate director Roco Krsulic. Yet he notes, “with demands for facilities growing rather than shrinking, we seldom find ourselves in a disposition mode.”
Complicating matters is that the MTA does not actually own all of the land it uses. In some cases it carries long-term leases with other government agencies — and determining title can be tricky, said Thomas Gammino, senior director of sales at Massey Knakal.
The few properties the agency has sold recently include the Mamaroneck train station in Westchester County, which went for $1.25 million, to the Bronx-based Verco Properties and a $12 million parcel in Westbury, Long Island, near the Mineola train station.
The latter deal stemmed from a two-block, 3.5-acre parcel near the Mineola station that the MTA purchased for $11.5 million in 2002. On one block, it built a four-level parking garage.
Last month, Great Neck-based A1 Universal Construction Realty bought the remaining block, a 1.3-acre property, for $12.2 million. The firm’s CEO Mike Yeroushalmi declined to comment on what he plans to do with the space.
In Mamaroneck, Verco is planning to spend $1.25 million on top of the $1.25 million it paid for the station to convert it into a high-end restaurant and to tuck office space into the high-truss ceiling, though the company must abide by strict preservation guidelines.
“This will be a destination not just for commuters but for the surrounding area,” said Chris Verni, who co-owns Verco with his brother, John. “It’s not going to be an Applebee’s.”
Meanwhile, the MTA is currently in the process of marketing several sites. The only New York City site in that category is at 166 Smith Street in Brooklyn, which the agency bought in 2003 for $2.01 million in order to install a switching and signaling facility. That facility occupies almost two-thirds of the basement, but the MTA is now looking to sell the rest of the building. Responses to an official request for proposals for the site were due late last month.
Upstate in Dutchess County, the agency is moving forward on a larger project that five developers have already officially responded to as part of the MTA’s so-called request for expressions of interest. The agency is looking for a developer to design a mixed-used project on an 18-acre site surrounding the Beacon train station and is also requiring the developer to expand and upgrade the station. A formal RFP will be issued in the fourth quarter of this year.