Grand Central’s New Rail Hub to Be Managed by MTA Unit
(Bloomberg) -- New York’s Metropolitan Transportation Authority is creating a subsidiary corporation to oversee a new rail facility below Grand Central Terminal that will connect Long Island commuters to Manhattan’s east side.
The East Side Access project is estimated to cut commuting times by extending the Long Island Rail Road into Grand Central. The commuter line runs between Long Island and Penn Station, located on midtown Manhattan’s west side.
The MTA’s board voted to approve the new subsidiary at its monthly board meeting on Wednesday. The new rail terminal is set to open December 2022 as the MTA struggles to bring ridership back to pre-pandemic levels. The LIRR carried 153,700 riders on Monday, a 47% drop from 2019.
“All signs seem to be pointing to expectations that work from home will have some -- we don’t know exactly how much, but it’s going to have some -- ridership impact and it’s going to be years before we work our way to 100%,” Janno Lieber, the MTA’s acting chief executive officer, said during Wednesday’s meeting. “So we do need to find new sources of revenue in tandem with our partners in the legislature and other major stakeholders.”
The MTA is the largest public-transportation system in the U.S. and includes New York City’s subways and buses, the Long Island Rail Road and Metro North Rail Road, which connects the city to its northern suburbs. The MTA already has subsidiaries that manage those systems. This action would create another entity just for the new terminal underneath Grand Central.
The subsidiary will oversee the new 350,000-square foot terminal, which includes eight new rail tracks and 25,000 square feet of retail space within a concourse below Grand Central. A private operator will manage and maintain the hub. Long Island Railroad employees will take care of the rail work, creating about 210 new positions.
“This enables us to have a couple of people who are already at the MTA working for this new subsidiary and their sole job will be to oversee the private sector unionized operation that will be operating some of the retail and public spaces,” Lieber told reporters after the board meeting about the benefits of creating the new entity.
The $11 billion project is set to open December 2022 after years of delays and billions in cost overruns.
While ridership has been slowly increasing, farebox receipts are still below pre-pandemic collections. The MTA projects that farebox revenue will total $2.8 billion in 2021, less than half the $6.4 billion the agency collected in 2019, Jai Patel, MTA’s deputy chief financial officer, said during the meeting. Farebox collections are expected to account for 16% of MTA’s overall revenue this year, down from 38% in 2019, Patel said.
The MTA’s overall ridership for the first nine months of 2021 is about 44% of pre-pandemic levels, Patel said.
In a separate issue, the board approved borrowing as much as $4 billion of short-term debt as the MTA has yet to receive $10.5 billion of federal coronavirus funds because of a stalemate between New York and New Jersey on how to divide that federal aid for public transportation systems.
Congress approved the funding for the region in two coronavirus relief packages, with the states responsible for divvying up the aid.
The states must decide how to divide the funds by Nov. 8 to participate in a $2.2 billion pot of federal discretionary funds for mass transit systems hit hardest by Covid.
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