The cash-strapped MTA has squandered a fortune in botched real-estate transactions — failing to collect millions in outstanding rent, refusing to charge interest on that money, and hanging onto lucrative air rights over some property, a bombshell investigation found.
These revelations come on the heels of the most drastic subway and bus service cuts in decades aimed at saving $93 million — and ahead of a planned fare hike next year.
“New Yorkers can’t afford to pay more while the MTA ignores potential cost savings,” said state Comptroller Thomas DiNapoli, whose scathing report was obtained by The Post. “But that’s exactly what has happened here.”
The report’s findings are damning.
Between January 2005 and August 2009, the MTA didn’t collect a whopping $9 million in back rent from nearly 1,000 commercial tenants — and no interest or penalties were ever charged.
In New York City alone, MTA brass never attempted to sell $12 million worth of air rights over rail yards that could be used for commercial structures — even though they hired Massey Knakal Realty Services in 2006 to consult on the matter.
And the agency pays more than $6 million each year on upkeep of two nearly vacant buildings: the agency’s former headquarters on Jay Street in Brooklyn, and another in Mineola, LI.
The MTA didn’t agree with all of DiNapoli’s findings, arguing that collecting rent and seeking interest “commonly result in litigation.”
The agency said it is looking into new ways of scoring advertising dollars, including digital ads in trains, buses and stations, along with “displays that animate as trains move through tunnels,” the MTA wrote to DiNapoli.
Agency real-estate executives also retorted that building above tracks to get revenue from air rights is complicated and isn’t always a moneymaker, and that work on the Jay Street building is in the next capital budget.
The comptroller’s report also found the agency pays $25 million a year to rent office and storage space, even though it owns 600 similar spaces it doesn’t use.
An MTA spokesman said the agency is doing everything it can to cut costs and bring in cash.
“While MTA real estate generates nearly $200 million each year to support the transit system, our ongoing financial issues demand that we think creatively and do more,” said Jeremy Soffin.
“We are trying new technology to increase advertising revenues, working to change regulations that limit our ability to develop our assets, and better utilizing space as we downsize. No stone can be left unturned to maximize revenues and reduce costs, and we are actively pursuing each of these initiatives,” he said.