MTA surplus at $833M

But '07 fare hike is still possible

BY MICHAEL SAUL and PETE DONOHUE
DAILY NEWS STAFF WRITERS

THE MTA - an agency that five months ago had forecast a modest $76 million surplus this year - now says it expects an $833 million surplus.

But the windfall doesn't mean that riders won't face a fare hike in 2007.

Instead, Metropolitan Transportation Authority officials want to spend about $350 million to build a deck over its West Side railyards, then sell the development rights for $1 billion or more.

Their proposal essentially sounds the death knell for the Jets' hopes for a West Side stadium, as MTA officials said yesterday they were under no obligation to close a deal with the Jets.

The agency had a "once-in-a-lifetime" opportunity to use the money to capitalize on the city's big West Side plans: the expanded Javits Center, the No. 7 line extension and the new Moynihan train station at Penn Station, said MTA Executive Director Katherine Lapp.

"This is like Lincoln Center in the 1950s, like Rockefeller Center in the 1920s," she said.

Some of the surplus will go toward scrapping planned service cuts, including the elimination of 33 bus routes and drastic reductions in Long Island Rail Road service next year.

The MTA also is boosting spending for more police in the tubes; additional cleaning of stations and tracks, and increasing some bus and commuter rail service. It also is putting more platform conductors in key stations to help in case of emergency evacuations.

"It's good news," said Gene Russianoff of the Straphangers Campaign, a frequent MTA critic.

Lapp told the Daily News it made more sense to use much of the surplus to generate billions for capital projects - rather than to try to avert a 2007 fare hike - because those projects keep the system in good repair.

"Every dollar put into capital projects goes to the benefit of our riders," she said.

Under Lapp's proposal, the MTA would work with the city and community to come up with a development plan. It would seek proposals from developers, which could generate $1 billion or more for the MTA's current capital plan.

The MTA would ask the winning developer to erect a building for MTA headquarters staff atop the platform, allowing the agency to sell its Madison Ave. properties. That would raise more money for the next capital plan, which would allow work to proceed on the Second Ave. subway and an LIRR link to Grand Central Terminal.

MTA officials said the Jets had blown their original deadline to close a deal to build their stadium. As a courtesy, the agency extended the deadline to the end of next month, but officials didn't expect a deal to be reached.

"I gave them 30 days, but at the same time I can do anything we want," MTA Chairman Peter Kalikow told the board.

At another point, he said, "I would imagine that would be the last word, I hope, that you will hear from me about the Jets and the West Side yards."

Jets spokeswoman Marissa Shorenstein said, "We are weighing all of our options and we have agreed to notify the MTA regarding our intent to go to contract by Aug. 31."