The MTA proposes purchasing the Hudson and Harlem Lines as well as Grand Central Terminal for $35 million from Midtown Trackage Ventures LLC. The MTA’s board of directors briefly discussed the possible deal in a regular meeting on Tuesday.
The seller, Midtown Trackage Ventures, acquired the properties in 2006 from The American Financial Group, which had, in turn, acquired the Penn Central Holding Co., the earlier owner.
The proposed purchase price includes all inventory, operations, improvements, and maintenance, except for the air rights over Grand Central. By buying the Grand Central building and accompanying land, MTA is able to make improvements for transit developments, engage in public-private partnerships, exercise full operational control of the terminal, and possibly sell the assets at some future date. The Hudson Line continues north to Poughkeepsie, N.Y. The Harlem Line extends to Wassaic, N.Y.
“This was a no-brainer, from a financial standpoint,” MTA Chief Development Officer Janno Lieber says. “We had to exercise the option to purchase or remain a tenant for another 270-plus years. And the interest rate environment — and the $500,000 discount offered by the seller — means it’s cheaper to buy it now than to pay rent for all that time.”
Lieber also say the deal would give MTA control on developing properties along the Harlem and Hudson lines, which may be used to foster transit oriented development projects.
“This marks a new chapter in the railroad’s history and eliminates a quirk that had lingered quietly in the background as Metro-North has established itself,” says Metro-North Railroad President Catherine Rinaldi. “By becoming the true owners of the infrastructure that we have long maintained on behalf of the people of New York, we are asserting Metro-North’s permanence as an institution dedicated to public service.”
Metro-North is a subsidiary agency underneath the MTA umbrella.
The transactions on the properties may close by 2020.
James Shigley: First sentence of the fourth paragraph: “The proposed purchase price includes all inventory, operations, improvements, and maintenance, except for the air rights over Grand Central.:
$35 million just for GCT would be a bargain. The MTA would be foolish to turn it down. I would wonder though what conditions might be attached.
The real history in the formation of Conrail, the New York and Harlem Rail Road Co. was not taken into Conrail because they could never agree to a value price of Grand Central Terminal and the rest of the line to Chatham, NY. I believe this NY&H R R company still exists and leased its Terminal and lines to Penn Central, and later PC leased it leased to M-NCRR. Only three other lines run by PC could not be included into Conrail, two lines that ran into Canada, and the Amsterdam, C. & Northern, RR, a steep spur line at Amsterdam, NY.
Did the Midtown Trackage Ventures LLC succeed in acquiring the Grand Central Terminal trackage from the bond holder of the New York & Harlem Rail Road Company and how much else was sold off?
James F Shigley – Haven’t read it recently, but those air rights, I suppose, are impacted by the SCOTUS decision affirming GCT’s landmark status and the legality of protecting it.
Gerald McFarlane – I disagree. This is precisely what the SCOTUS case was about. PC wanted to build a tower over (or maybe it was right behind – don’t recall) GCT and claimed that the New York City Landmarks Preservation Law, which designated GCT as a landmark and would have prevented it, was an unconstitutional taking of private property. I participated in the special train from Penn Station to DC, headed by Jackie Kennedy, in support of the law. SCOTUS found it to be constitutional. GCT was preserved, and no tower was erected. The NYC law was a response to the destruction of Pennsylvania Station some years previous, and since that time numerous historically important landmarks have been thus saved.
Britt Reid,
In this case by not selling the air rights to MTA, the current owners can do what ever they want over GCT, up to and including erecting a skyscraper, and the MTA/Metro-North could do absolutely nothing about it short of suing Midtown Track Ventures(the people keeping the air rights over GCT).
Hi George. Midtown Track Ventures LLC is Andrew Penson, managing member, and includes his partners in Argent Ventures and two outside institutional investors.
Of ancillary interest is to compare the current state of GCT and Penn. Station in NYC. The former move comportably by the thousands thru trains and shopping while the opposite prevails at Penn.
Should be over a Billion $ anyway!!!
I hope not, Whores will sell air rights and destroy that building.
After emerging from bankruptcy, Penn Central morphed into an entirely different company, American Premier Underwriters. They in turn were acquired by American Financial Group. Although Penn Central got out of the railroad business, they retained real estate and personal property assets associated with the original railroads. The retained assets included both Grand Central and (mysteriously enough) the Hudson and Harlem lines. In 2006 Argent Venture, a real estate firm (specializing in acquiring distressed assets) created a subsidiary Midtown Track Ventures to purchase Grand Central and the two rail lines. The two companies are a creation of a native Manhattanite (a non railroader), Andrew Penson. Penson’s acquisition was spurred by a concern over adjacent property that he thought might be adversely affected by decisions made about Grand Central. What Trains story fails to mention, however, is that the proposed sale to MTA does NOT include Grand Central’s air rights.
What is “Midtown Trackage Ventures LLC”? I must be really dumb. Never heard of it. Penn Central owned GCT. Is MTVLLC some derivative, by sale or name change, of PC? Ralph Spielman, do you know?
I thought the MTA already owned the Hudson, Harlem and New Haven Lines through Metro North?