Metropolitan Transportation Authority
Real Estate Portfolio
The Metropolitan Transportation Authority (MTA), which provides public transportation in and around the New York City metropolitan area, has a vast portfolio of real estate and related property rights under its control. We examined whether the MTA fully and accurately accounts for its real estate holdings and manages the holdings in a manner that maximizes revenue opportunities.
Like other public authorities in New York State, the MTA is required by law to publish, at least annually, a report listing all its real property. However, we found that the MTA does not publish such a report. As a result, the MTA’s vast real estate holdings have not been subject to the intended level of public accountability and transparency. The MTA’s Real Estate Department attempted to provide us with a complete and accurate listing of its real estate holdings, but was unable to do so, as the listing contained numerous omissions and inaccuracies. Part of the reason for the omissions and inaccuracies was the fragmentation of the MTA’s real estate records, as the MTA had no single system to account for its portfolio of real estate assets. We recommended that the MTA improve its real estate records and publish the property listing required by law.
The MTA leases space in its buildings to retailers and other tenants, sells advertising space in its buildings and trains to businesses, and leases and licenses portions of it properties for various uses. According to the MTA, the rental revenue from these activities totals about $199 million annually. We identified a number of opportunities for the MTA to increase its revenues and reduce its costs, and thus increase its net income, from its real estate operations. For example, many of the rental units that were vacant at the time of our audit had not been actively marketed by the MTA, even though some of the units had been vacant for years. In addition, the MTA had not tried to sell the rights to the space above certain of its properties, even though a consultant hired to find revenue-generating real estate disposals valued the rights at more than $12 million. We also found that the MTA routinely leases space from others at an annual cost of about $25 million without documenting whether its own vacant space would meet its needs.
For a complete copy of Report 2009-S-10 click here.
For a copy of the 90-day response click here.