N.Y. MTA's Departing Chairman Defends Agency’s Capital Program

The capital program is the “front and center challenge” for New York’s Metropolitan Transportation Authority, outgoing chairman Jay Walder said Wednesday.

Walder, at a press conference that followed his final board meeting, defended questions about the transit agency’s rising debt.

A recent report by state Comptroller Thomas DiNapoli said that if financing proposals are approved for the 2010-2014 program, the MTA’s debt service could reach $3.3 billion by 2018 — 64% more than in 2011.

“We’re taking on more debt, but we’re also retiring bonds issued many years ago,” Walder said. “It’s a maturing of the process that began 30 years ago. Given a choice of making capital improvements or not, you have to vote for the improvements. If it means you have to take on more debt, then you have to accept that that’s the case.”

The MTA began its capital program in 1982. The authority prepares financial plans in February, July and November, and votes on the budget every December.

Earlier this month, Fitch Ratings downgraded the MTA’s $14.3 billion of Series 2011B revenue bonds to A from A-plus, citing “higher-than-expected near-to-

medium-term financial pressure.”

The board on Wednesday approved a finance committee recommendation to authorize up to $500 million of Series D transportation revenue bonds.

Walder, who has overseen the transit system and its 8.5 million riders since October 2009, will resign effective Oct. 21 to become chief executive and board member of MTR Corp., a publicly traded Hong Kong company that operates rail services in Asia and Europe. Its business activities include consulting and property development.

“I knew it would be a short matter of time before a large, private company scoops him up,” said board member Nancy Shevell.

Walder denied any rift with Gov. Andrew Cuomo, whose predecessor, David Paterson, appointed him as chairman. Cuomo “played no role in my decision to leave,” he said.

“I wish the economic situation we came into was different,” Walder said when asked if he had any regrets. “In a different world, all of the energy would have gone to improving services and that would have been great. But you have to play the hand that’s dealt.”

Earlier this week, the MTA, in a move intended to beef up its own real estate revenue to meet capital needs, said it would sell or lease its former subway headquarters at 370 Jay St. in downtown Brooklyn, and eight other properties.

“While these revenues represent just a small fraction of the MTA’s capital funding needs, every bit helps,” said Jeffrey Rosen, director of real estate.

The MTA had recently renovated the nearby Jay Street-Metro Tech station, but had let the building itself deteriorate.

“The rest of downtown Brooklyn has undergone tremendous and transformative growth, yet 370 Jay St. has remained a virtually vacant eyesore — at times obstructed by sidewalk scaffolding and an unsightly black scrim to protect passersby from the building’s crumbling facade,” Brooklyn borough President Marty Markowitz said in a statement.

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Transportation industry New York
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