NEW YORK CITY-The Metropolitan Transportation Authority, the New York Times reported Thursday, says that it is planning to sell or lease its midtown headquarters. A sale could net the beleaguered, financially strapped organization more than $150 million.
If the MTA releases the buildings at 341, 345 and 347 Madison Ave., the spots will enter the Grand Central submarket, which has a direct vacancy rate of 10.3%–second in Midtown only to the Madison/Fifth submarket, according to first quarter data for the year from Cushman & Wakefield. Still, the buildings provide potential bonuses that would no doubt prove to be attractive to buyers and tenants alike, such as access to Grand Central Terminal, which an estimated 750,000 people pass through on a daily basis.
Gene Rusianoff, staff attorney for transit advocacy group the Straphangers Campaign, tells GlobeSt.com that he’s concerned that the MTA find the money it needs to fund its rebuilding program. “They need the dough,” Russianoff says. “They have a five-year rebuilding program and only funding for the first two years.” Russianoff’s main concern, he says, is that the organization not cheat itself on any property it sells. “We don’t think the MTA got a very good deal for the West Side Yards or the Atlantic Yards.”
Ira Greenberg, chair of the Permanent Citizens Advisory Committee to the MTA, is also optimistic about any potential sale, and tells GlobeSt.com that “the concept makes sense,” since the market will likely be improved when any sale goes through.
The MTA agreed to sell development rights for the West Side Yards and Atlantic Yards properties to Related Cos. and Forest City Ratner Cos., respectively. Related deposited $21.75 million in May of last year to execute a binding contract with the MTA and has since added to that amount. Under a payment plan approved by the MTA Board in June 2009, FCRC paid $20 million, with an additional $80 million to be delivered over the next two decades, according to published reports.