The Business Journal recently sat down with MTA Metro-North Railroad President Howard R. Permut to discuss the railroad”™s impact on economic development in Westchester and Fairfield counties. The following represents a shortened version of the conversation that ensued:
Business Journal: How has Metro-North Railroad driven development in Westchester and Fairfield counties?
Permut: “All you have to do is you go look at our train stations and you see where the development is. You can go to the Hudson Line and you see Yonkers and where”™s the big development? It”™s next to the train station. You go to Tarrytown, it”™s next to the train station. In Peekskill, it”™s next to the train station… The best example of all is probably New Rochelle, where you have two 60-story apartment buildings right next to the Metro-North train station.
“From a commercial standpoint, all you have to do is look at Stamford and Greenwich. Where are these companies building? They”™re building next to the train stations…By connecting and providing accessibility between New York City and our territory, we”™ve created a huge amount of wealth.”
Why haven”™t we seen more activity in the area of transit oriented developments?
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“In our country it”™s different than places like Japan, like Hong Kong where the railroad owns the land, they build the line, then they”™d sell the real estate. That”™s why they built the railroads.
“Here we don”™t do that, so here most of the land has been sold off years ago by our predecessor railroads. They sold off all the land so the private sector is now developing the land and there really is minimal direct economic return to the public sector.
“Within Manhattan there are some places where MTA actually owns significant amounts of land, but on Metro-North we don”™t have that. But there are a few places where we own land around stations, and so we have tried … where we are the developer working with the town.
“So Harrison is the one furthest along ”“ we”™re in the midst of working with the town right now. It”™s a great opportunity for us and it should be a win-win with us and the town.”
What are some of the challenges in looking to spur activity around transit oriented developments?
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“In any circumstance, change is always hard. There”™s always a group who doesn”™t want to do anything. We face that in almost anything we try to do.
“We”™ve had a couple of places where we”™ve worked hard, where we thought there were great opportunities, and the localities didn”™t see it that way… The worst case ”“ I will go as far as to say it”™s the poster child of what our issues are ”“ is Beacon, New York. We worked extremely well with that mayor, Mayor (Clara Lou) Gould. For six years we had I don”™t know how many public meetings. We had all these routes lined up and there was a change in mayors and in a matter of a week or two a whole new set of issues got raised.”
Parking is often cited as a major obstacle to new transit oriented developments ”“ why is it consistently an issue?
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“In lower Westchester County there”™s no land to build surface parking, so you have to build structured. Structured parking costs, depending on the site, between $25,000 and $35,000 a space. It”™s very expensive… It doesn”™t pay for itself ”“ you don”™t make money on parking.
“So it”™s a real challenge. And look: Westchester is a fairly crowded area so people don”™t want the traffic that comes with parking. And again, more than anything, a lot of people don”™t like change.
“Take Poughkeepsie: it took us the better part of seven years to negotiate with the town (to build a parking structure) and it took us about two years to build the project. It”™s full from day one. That gives you some indication of how hard it was, and I can tell you many stations where it”™s taken us five to ten years to get agreements to do projects that take us 12 months.”
What actions can Metro-North take independent of local officials to modernize its stations?
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“We will continue in a place like Harrison and now Poughkeepsie is very interested, where we think there are economic development opportunities. We will work with Mount Vernon, and we have a host of other places we”™re working with.
“The other thing we”™ll do is we”™ll continue to work on our station buildings and our net leasing program. That”™s been a very big success. We”™ve now net leased out ten or eleven stations ”“ Port Chester is our most recent ”“ where it”™s an absolute win-win.
“We take beautiful old buildings that have been open five days a week, eight hours a day. We don”™t have the funds to maintain them the way they should be. In Port Chester”™s case we net leased it to the brewery. We”™ll still have a ticket office there, and now it”™s going to be open 20 hours a day, seven days a week. They are going to fix it up in a way we couldn”™t. It becomes a center of activity for the community.
“There are other places like Mamaroneck, where we just sold a building…and like Hartsdale, where there is a Starbucks. I”™d love to see us do that in Tarrytown. I”™d love to see us get somebody in Peekskill, in Ossining. There are other buildings in Yonkers where we hopefully someday will find tenants who can really make it a center of activity.”
With limited funding sources, how does the MTA (and by extension Metro-North) continue to invest in the necessary capital upgrades?
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“That”™s where the really important connection comes in: the recognition of the elected officials in Westchester County and the political leadership of the critical nature of Metro-North.
“We do not make a profit. We lose less money than just about any other railroad in the United States, but we don”™t make a profit. But there”™s a need to recognize that you need capital investment and you need money to operate this service to create wealth… So you can”™t have it both ways. If you want Metro-North to be a creator of wealth and economic development, you need the public money to support it, to both operate it and to rebuild it.
“You either support public transit, since we”™re not a real estate developer like MTR (Mass Transit Railway) in Hong Kong, where they own all the land and all the shopping centers and all the apartments (surrounding the rail lines)…and let it create the wealth, or you don”™t.
“You can”™t have a situation where people say, ”˜I don”™t want to pay for it, but I want the benefits.”™ It”™s not sustainable. It”™s that simple.”
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