MTA President Pat Foye issued the following letter today to New York City Deputy Mayor Dean Fuleihan:

Dear First Deputy Mayor Fuleihan:
 
As you know, the State government is currently negotiating the FY2019 budget that is due on April 1. As part of those negotiations, there are several proposed measures that would provide short and long-term funding to the MTA, which is currently under a state of emergency as a result of decades of disinvestment and disrepair. The city funding for half of the subway emergency action plan and congestion pricing are being considered.

One of those measures currently being debated is a funding tool known as value capture, which is commonly used throughout the country and the world to finance major capital projects. It would give the MTA and the City the ability to fund critical projects that would be part of its 2020-24 capital program.  Unfortunately, without this new funding stream, those projects would lack the funding to proceed. The next phase of the Second Ave subway from 96th to 125th street is a vital project and it would need to be aborted without this financing option. There are no other viable funding mechanisms. The simple fact is that the MTA does not currently have the necessary funding to move critical projects along.
 
Value capture is not a controversial policy. It is essential to note that no property owner would pay a dollar of additional property tax as a result of the MTA sharing in the increase in property values. It would help fund mass transit by directing a portion of additional revenue generated from MTA investments back to the authority for maintenance and future capital projects; without the required MTA construction, the city would not receive the increased property tax revenue resulting from MTA construction. Mayor Bloomberg successfully employed value capture to fund the 7-line extension in Manhattan. 
 
Contrary to the City’s previous assertions, the City would in fact end up with more revenue than if the MTA had not otherwise completed these projects. According to your own estimates, as a result of the MTA’s investments financed with value capture, New York City would receive nearly $300 billion in new tax revenue it does not have now.
 
Implementing value capture would be a win-win for the MTA and the City. It would provide the city with an option that they could use at their discretion going forward.  But the MTA can take no action without the city’s explicit approval. However, if the legislature does not approve this option, there is no way the MTA can fund the next phase of the second avenue subway or any other major new capital project. The MTA will not have the capital available and the city has made it clear that they will not fund additional capital for the MTA plan.
 
If the City doesn't want to approve a particular project for value capture or approve the project at all, it doesn't have to. At the end of the day, the City has the total ability to veto any project through its representative on the Capital Projects Review Board. 
 
Sincerely, 

Pat Foye