New York's Metropolitan Transportation Authority Thursday announced that it plans to sell three buildings on Madison Avenue in midtown Manhattan to raise about $150 million.
The buildings currently serve as the mass transit agency's headquarters. Employees will now move to other MTA facilities in lower Manhattan and in North White Plains.
The real estate sale is part of the agency's initiative to reduce costs and balance its budget. Cutting 20% of headquarter positions has created significant vacant space in its offices. Officials have reduced payroll by 3,500 positions throughout the system.
"The hard work we've done to overhaul how the MTA does business is opening the door for even greater cost savings," chairman and chief executive officer Jay Walder said in a statement. "Selling our Madison Avenue buildings is a true triple play, allowing us to raise capital funds, avoid costly renovations, and make better use of our office space downtown."
Officials plan to vacate the three Madison Avenue buildings within two to three years.
In other news, the MTA is also working on replacing $750 million of liquidity facilities that will expire in 2011, according to its annual report on its variable-rate debt portfolio. Officials have already found new credit enhancement on $390 million of debt for which letters of credit or standby purchase agreements had ended earlier this year. They converted another $234 million of debt to fixed-rate mode, ending the need for a liquidity facility for those bonds.
For 2012, the authority will need to address expiring liquidity facilities on $1.84 billion of debt.
Of the MTA's $29.6 billion of outstanding debt, $23.27 billion, or 79%, is in fixed-rate mode. Another $3.02 billion, or 10%, is variable-rate debt that is attached to derivatives and offers a synthetic fixed rate, while $2.4 billion, or 8%, is unhedged variable-rate debt.