Making Every Dollar Count: Right-Sizing MTA Office Space Permanent Citizens Advisory Committee Meeting June 2, 2011

Overview: Making the Most of MTA Real Estate Top-to-bottom review of Real Estate Portfolio: –Identify underutilized properties –Make optimal use of properties leased from NYC (e.g. 370 Jay St.) and other jointly- owned assets –Monetize air rights opportunities –RIGHT-SIZE OFFICE SPACE 2

Office Space Right-Sizing: The Opportunity Recent headcount reductions have created significant vacancies (12.5% of desks overall), particularly at Madison and 2 B’way (15%). Usable square feet per desk exceeds today’s industry standard (211 USF/desk overall vs USF/desk). 2 B’way is particularly low density (233 USF/desk), especially on “phase 1” floors (249 USF/desk). Desk-sharing and other workplace design innovations can reduce square footage per head over and above reductions in square footage per desk. 3

The Plan: Maximize Use of 2 B’way and Dispose of Madison Key elements of our plan to reduce costs and unlock value: Terminate space leases where possible. Relocate employees from valuable Madison Avenue property. –Move Metro-North personnel to other space convenient to Metro-North operations. –Re-stack 2 Broadway and move headquarters there. In each case, employ up-to-date space planning standards to increase density. Make Madison Available for Redevelopment. 4

Space Leases By September, will have terminated 8 space leases, for annual savings of more than 12% ($2.5 M), net of new BSC lease, since April Opportunities for further consolidation remain. However, space under remaining space leases: –accounts for only 21% of total MTA office space; –is relatively inexpensive (average of $24.78 per rentable square foot); and –Is relatively efficiently used (203 usable sq. ft. per desk and 98% occupancy, vs. 213 usf/desk and 86% occupancy at owned and net leased properties). 5

Madison Base building renovations can be deferred for only so long, and renovating in place would be very costly. 3 separate buildings, with duplicative lobbies and building systems and small, inefficient floor plates. Continued occupancy entails significant opportunity cost, as it precludes redevelopment of new building on site. 6

Plan Benefits Reduce operating expenses by: –relocating Mad Ave operations to less space in more efficient buildings. –More effectively leveraging fixed operating expenses and sunk capital costs at 2 B’way. Relocate Mad Ave employees for far less than deferred capital projects at Mad Ave would cost. Monetize Mad Ave asset value. Facilitate creation of new entrance to East Side Access concourse. 7

Next Steps Engage broker/architect team to assist in search for space for Metro-North, re-programming of 2 B’way and marketing of Mad Ave property. Acquire software to facilitate tracking of agency personnel. Develop designs for relocation of Metro-North and MTAPD communications equipment from Mad Ave buildings. 8