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.
