CHICAGO: Transit Developments

[Nowhereman1280]

^^^ Yeah, I would think him not being a rail expert to be an advantage. The top manager of an organization should be an expert in management, not in the dedicated purpose of the organization. He has the knowledge of how to run a business (or organization) and lets face it, the CTA has to be run more like a business and less like a charity (cough losing 50 million a year to free rides for seniors cough) if we don't want to see massive service cuts.

[Abner]

I don't see how appointing somebody who has absolutely no knowledge whatsoever about an organization or the service that organization provides, during what is probably that organization's biggest crisis ever, is an advantage. You know, there are people on this earth who are both good managers AND know something about public transportation. The CTA is not some small town bus service, we can attract the best.

Huberman did good things for the CTA, but he wasn't thrown into the thick of things at a time like this--just a run of the mill crappy time for the CTA by comparison--and he had the common sense not to cast doubt on his ability by informing everybody at once that he knew nothing about the CTA. That does not inspire confidence. This is a guy who might have to go before Congress, might have to work closely with the governor and our senators (or senator, anyway) to figure out a solution for the CTA, and if he has to learn all about the CTA, how its budget works, and what the possibilities for change are within the next few weeks, he has a LOT of learning to do.

I have no idea how the policy of free rides for seniors that was forced by the former governor is evidence of bad management or a charity mentality on the part of the CTA. And by the way, public transit IS a public service, not a business.

[nomarandlee]

http://www.chicagotribune.com/busine...4436134.column

CTA puts out 'for sale' sign
Transit agency hopes to sell or lease properties
Jon Hilkevitch | Getting Around
March 2, 2009


For commuters looking to buy a home or start a business near a transit line, the Chicago Transit Authority may have just the deal.

The CTA is opening up its vast real estate portfolio in Chicago and the suburbs in a bid to sell or lease surplus properties and bolster the transit agency's sagging bottom line.

The timing of this endeavor to unload non-essential assets could hardly be worse, given the sorry state of the economy.

But potential bidders can start their searches by doing an Internet drive-by at ctarealestate.com..........

The Web site includes about a dozen parcels for sale and 19 retail spaces for lease in rail stations. The transit agency hopes to fill the spaces with businesses that offer more appealing and upscale services to commuters...........

The CTA and Jones Lang LaSalle have not inventoried the total number of properties that could potentially be put up for sale, Kabira said. The transit agency owns more than 400 properties, although the total includes bus turnarounds and other facilities that are needed for operations, he said..............

More in article.

[bnk]

I am getting more than a little fed up with Chicago selling or leasing out money generating assets. I thought it was stupid for asshat Blago to try to sell and lease back the Thompson Center [1]. Thankfully that tactic failed.

I could live with the Skyway deal, I am against Midway, and the parking meters and garages was the last straw for me.



This really needs to stop for there will be no assets left at some point with no income coming from them. The one time payouts will have been more than blown away, way before some of these 99 year leases are expired.


I am not saying that some of these CTA assets are not worthy of sale but this continued sell off city assets and privatization is starting to piss me off.

"We don't have the luxury to wait for three years" when the market may improve, Kabira said. "We think it is in our best interests to dispose of those assets."

But in the very next sentance


The CTA generated more than $7.2 million last year from property including retail concessions at rail stations and storefronts near stations, as well as park-and-ride facilities, parking spaces underneath elevated train structures and office space, officials said.

Yea lets dump all of our assets ASAP we need the upfront money now! As an individual one can also get payday loans, loans on income tax returns, bulk payouts on legal settlements too. But those are only for the most desperate and ill informed getting their financial ass handed to them by loan sharks.

This short sightedness is rather corporate American. Screw the future, gimme now, and how is our quarter looking.





[1] Proposed sale

When he first came to office, Illinois Governor Rod Blagojevich proposed selling the building to assuage the state budget.[4] The proposal was heavily criticized.[4] Lawmakers at first agreed to the plan,[5] but later a $200 million mortgage was agreed to instead, payable over 10 years.[6] The plan was declared unconstitutional by Illinois Attorney General Lisa Madigan in June 2004.[7] The plan was set aside, although it had already cost the state $532,000 in legal fees.[8]

http://en.wikipedia.org/wiki/James_R._Thompson_Center

[Mr Downtown]

I'm with you on the Skyway, Midway, Thompson Center retail, and the meters.

But this is different. It's odds and ends of surplus real estate that CTA should have sold off years ago. I hate to see them take fire sale prices, though, or sell property that could be leased for a good long-term income stream.

[Abner]

bnk, you single out Blagojevich regarding the Thompson Center, but let's not forget that the Skyway, Midway, and the parking meters are pure Daley.

[bnk]

Yeah but I am loyal to my Avatar. It is one of my weaknesses.

[arenn]

The government shouldn't be holding onto this land. Why turn the CTA into a land bank? Let's put it back on the tax rolls and raise some money at the same time.

[Attrill]

Originally Posted by Mr Downtown

I'm with you on the Skyway, Midway, Thompson Center retail, and the meters.

But this is different. It's odds and ends of surplus real estate that CTA should have sold off years ago. I hate to see them take fire sale prices, though, or sell property that could be leased for a good long-term income stream.

Exactly - this is very different. Many of the properties they're selling were bought for the Brown line rehab project and used as staging areas. You can see the properties for sale here. There really isn't a lot up for sale.

[Haworthia]

Originally Posted by arenn

The government shouldn't be holding onto this land. Why turn the CTA into a land bank? Let's put it back on the tax rolls and raise some money at the same time.

I agree with this in principle, but trying to do something with the land now? It's one of the worst real estate markets we've had in a long time. Seems like a waste. That land should have been leased or sold during the boom, not during this bust.

[Mr Downtown]

Haworthia, can you PM me next time we're going to have a big recession? There are some things I'll want to do in advance, and having that knowledge ahead of time would be very helpful.

[Taft]

Originally Posted by Mr Downtown

Haworthia, can you PM me next time we're going to have a big recession? There are some things I'll want to do in advance, and having that knowledge ahead of time would be very helpful.

It hardly would have taken a crystal ball to know that:

a) the CTA would be strapped for cash in the near future, and
b) that the real estate market had some hard times ahead

Suspecting that EITHER was going to be true should have had the CTA looking to either develop some of the land in an attempt to make a profit or sell some of the land to make some cash and/or diversify their investments.

Believe me when I say that I am generally one of the CTA's biggest supporters. However holding on to mass amounts of valuable real estate, passing on capitalizing during the biggest boom years this country has seen only to divest those assets when they were bottoming out? Not great business moves, IMO.

That said, much of this land was probably acquired pre-boom, so unless land values REALLY plummet, the CTA will still end up making a profit. Still, a lot of missed opportunities here, I think.

[Haworthia]

Originally Posted by Mr Downtown

Haworthia, can you PM me next time we're going to have a big recession? There are some things I'll want to do in advance, and having that knowledge ahead of time would be very helpful.

The sale of assets has been proposed in the MIDDLE of a collapse in real estate prices, when these assets are the LEAST valuable. Yes the CTA needs to plug holes in it budget. That need is from falling tax revenues. I recognize that need. But this really is the worst timing. I understand the urge to sell now, but it's a mistake to give up valuable assets at a discount (leasing of properties might make sense, but I think that's a separate issue).

But you bring up a good point. Why didn't the CTA do something useful with these properties when the market was strong? You don't need to be all that savvy to know you are in the midst of a boom. I may not be able to PM you when the economy will turn sour, but pretty much anyone can tell you when times are good. If the CTA had done this in good times, they could have used the revenue to fix slow zones instead of taking out bonds at the time they did. That was a missed opportunity.

There is also the argument that it's better to have transit oriented development near stations which could add potential transit customers than to just sit on the land. That could be a two fold way to increase revenue. There is merit to this argument, but I don't think there is any market for that right now. I think what is most likely to happen is someone with deep pockets will buy up the land and sit on it until the market recovers and then flip it. I don't think the CTA is likely to see any development on land they sell, so I think they are best served by sitting on the land themselves for the time being.

[Mr Downtown]

Only a dozen parcels are currently listed for sale, and several of them were needed until recently for Brown Line construction.

[nomarandlee]

http://www.chicagotribune.com/news/l...,2935700.story

Illinois still has not submitted its list of transit projects for stimulus money
State transportation officials vow to get moving on the application but don't fear losing any funds

By Jon Hilkevitch | Tribune reporter
March 4, 2009

Illinois still has not officially submitted a list of shovel-ready road and mass transit projects to the federal government for funding under the economic stimulus package, U.S. Transportation Secretary Ray LaHood said Tuesday, warning that time is running out.

"The law requires us to get the money out the door very quickly," LaHood said. But "we have not received a list from the state or from Chicago."

State transportation officials vowed to get moving with the application process, but they expressed no concerns about possibly losing federal aid.

Mayor Richard Daley has been tight-lipped about disclosing Chicago's projects, other than to say he wants $50 million to push along the expansion of O'Hare International Airport. A mayoral aide said Tuesday that the city is "on track" to receiving stimulus funding............

..

[brian_b]

http://www.bloomberg.com/apps/news?p...d=alwTE0Z5.1EA

The Chicago Transit Authority retirement plan had a $1.5 billion hole in its stash of assets in 2007. At the height of a four-year bull market, it didn’t have enough cash on hand to pay its retirees through 2013, meaning it was underfunded to the tune of 62 percent.

The CTA, which manages the second-largest public transit system in the U.S., had to hope for a huge contribution from the Illinois state legislature. That wasn’t going to happen.

Then the authority found an answer.

“We’ve identified the problem and a solution,” said CTA Chairman Carole Brown on April 16, 2007. The agency decided to raise money from a bond sale.

A year later, it asked Illinois Auditor General William Holland to research its plan. The state hired an actuary, did a study and, on July 17, concluded that the sale of bonds would most likely result in a loss of taxpayers’ money.

Thirteen days after that, the CTA ignored the warning and issued $1.9 billion in bonds. Before the year ended, the pension fund was paying out more to bondholders than it was earning on its new influx of money. Instead of closing its funding gap, the CTA was falling further behind.

In the CTA deal, the fund borrowed $1.9 billion by promising to pay bondholders a 6.8 percent return. The proceeds of the bond sale, held in a money market fund, earned 2 percent -- 70 percent less than what the fund was paying for the loan.

The public gets nothing from pension bonds -- other than a chance to at least temporarily avoid paying for higher pension fund contributions. Pension bonds portend the possibility of steep tax increases.

By law, states must guarantee public pension fund debts.

Disgusting. It's way past time to clean house at the CTA. Now I know why people are protesting Huberman at the CPS HQ every other day.

[MayorOfChicago]

I've lived here for 8 years, and always had faith in Daley while shaking my head at state government.

Now I'm just sick of it all, extremely disgusted is more like it. Is there NO ONE in this state who can stand up, snap their fingers, and draw attention to what's happening here??????? Not even the CTA, but just the god awful mess that has become Illinois...Cook County...Chicago.

For 7 years I was along with almost everything Daley did, now I'm not just questioning his leadership, but I'm starting to seriously doubt the man and his actions.

Blago...Burris....pulling Huberman right when he started getting things right. No one gives two shits about the actal CTA, it's all about people in charge and who's-who, what's in line next for the stars of Illinois politics.

If we blow this whole stimulus wad without getting anything because of sheer incompetence, I'm seriously going to think about setting up shop somewhere else. It's getting too depressing to live in this state, and yes I DO understand what's happening all across the country. It's still pathetic for Illinois, and inexcusable.

[the urban politician]

^ I'm as skeptical as you are, but the State won't let nearly a billion dollars in transportation projects slip away. I realize that there is concern because Daley lost $153 million for BRT from missing a deadline, but that was a very different situation (passage of a huge & complex public-private transaction as well as legislating highly unpopular parking rate tax hikes, followed by the Fed's unusual refusal to extend a deadline by 13 days due to changing of administrations). I'm reassured by this:

The transit projects must first be approved by the transportation committee of the Chicago Metropolitan Agency for Planning, which plans to vote on the projects Friday, said Diane Palmer, spokeswoman for the Regional Transportation Authority. Then, the CTA, Metra and Pace must file applications to the Federal Transit Administration, she said.

"When Gov. Quinn was sworn in, I told him the importance of getting deadlines met," LaHood said.

Quinn on Friday named Gary Hannig, a state representative from Litchfield, to replace Milton Sees, who was IDOT secretary under ex- Gov. Rod Blagojevich.

IDOT will submit its list "after our public comment period closes at the end of business today," department spokeswoman Marisa Kollias said Tuesday.

State transportation authorities have met with officials from the Federal Highway Administration and "they do not believe we are at risk yet to lose anything," Kollias said.

[ChicagoChicago]

Jesus Christ! What does it take to submit your “wish list?” If this isn’t used as ammunition to get Daley out of office, then nothing can uproot this clown.

And for Quinn not to have made an issue out of this is equally disappointing.

[Abner]

You forgot to quote this fun tidbit from the article:

"In early February, Daley said he has a wish list of projects he wants funded. Unlike other leaders, however, Daley said he wouldn't tell the public because of concerns "the newspapers, the media is going to be ripping it apart," he said."

Does he even pretend to be held accountable democratically anymore?