Joseph Lhota.
(New York, NY -- Andrea Bernstein and Jim O'Grady) Governor Andrew Cuomo has made his second top transit agency choice in as many days, saying he'll nominate former Giuliani aide Joseph Lhota to run the 12-county transportation agency, the nation's largest. Lhota is executive vice president of Madison Square Garden.
Lhota's appointment as head of the MTA, along with the announcement yesterday that Patrick Foye will lead the Port Authority, means that Cuomo has now chosen two individuals from outside the transportation world to lead key transportation authorities.
"I am pleased to accept the recommendation of the extraordinary search committee and nominate Joe Lhota to be the next chairman and CEO of the MTA," Governor Cuomo said in a statement. "Joe Lhota brings one-of-a-kind managerial, government, and private sector experience to the job and a lifelong commitment to public service that will benefit all straphangers. I look forward to working together as we continue to reform the MTA, reduce costs, and improve service for New Yorkers. I thank the members of the MTA Search Advisory Committee for their diligent work and thorough review."
One of the members of that committee, NYU Rudin Center director Mitchell Moss, said Lhota would be able to defend the commuter tax in Albany, which has been under attack from Republican lawmakers. "They’ll know he’s a serious guy, he’s a Republican," Moss said in a telephone interview "The whole culture of transportation will require very different leadership now." Moss said he expected fewer funds from the federal government, and managing relationships with Albany would become key to keeping the MTA funded.
Lhota served in the Giuliani administration for six years, first as budget director and then as deputy mayor of operations. He also worked as an adviser to Giuliani’s presidential campaign in 2007-2008. He was one of Giuliani's appointees to the MTA board, from 1999 to 2001. Before his work in the public sector, he was a banker at First Boston.
In a statement, Lhota said: "Millions of New Yorkers depend on the MTA every day and they deserve the most efficient and effective service. Throughout my career in both the public and private sectors, I have initiated reforms that are performance-based and that cut costs, and I look forward to bringing this same approach to the MTA. I thank Governor Cuomo for this exciting opportunity to serve the people of New York."
Reaction among transit watchers, none of whom would speak on the record to avoid alienating the next chief of the NY MTA, was part puzzlement and part wait-and-see.
“I was a little surprised that Joe Lhota rose to the top of that pool,” said an official from a previous mayoral administration. “He understands inter-governmental relations and he understands the politics but he’s more of a political operative than a manager.”
Both Cuomo and outgoing MTA chairman Jay Walder have said in the past few weeks that the next chair did not need to have a transit background. “I think it is helpful to have a knowledge of mass transit,” Walder said at the NY MTA’s September board meeting. “I don’t know that it’s an absolutely essential quality.”
Lhota fits that profile. His resume shows no transportation posts. But he did manage large governmental agencies in the Giuliani administration and ran the city when the mayor was out of town. Since then, he has navigated the executive suites of the Cablevision Systems Corporation, which owns Madison Square Garden. And Lhota has served as a board member at the City University of New York for the past ten years. Lhota was one of two board members who did not support withholding an honorary degree from playwright Tony Kushner last May. The vote to table the degree past last spring’s commencement was much-criticized and later reversed.
The precipice on which the NY MTA teeters consists of several difficulties: a 2012-2015 capital construction plan with a $10 billion dollar shortfall; a looming contract negotiation with Transport Workers Union Local 100 that, by all signs, will be acrimonious; a threat from a group of state legislators to cut the dedicated revenue stream that is the regional payroll mobility tax, which last year contributed $1.3 billion to authority coffers. That’s about an eighth of the authority’s operating budget.
Sources differed on Lhota’s ability to rise to those challenges. The NY MTA needs someone “who can handle the union relationships, the crisis of money, and Lhota will get it faster than most people,” said one.
But others don't expect Lhota to be a voice for transportation in the way Jay Walder was. Walder came from London Transport and is headed for a job running Hong Kong's transit system. In his tenure as MTA chief he pushed for several innovative transit measures, including countdown clocks, real time information, and better communication with customers. But his relationship with the union was toxic, and Walder presided over the MTA's deepest cuts in more than a generation.
Said Kate Slevin of the advocacy group, Tri-State Transportation Campaign, "We hope Mr. Lhota’s business acumen will help guide the agency towards more sound fiscal footing without compromising service and affordability for the system’s 8.5 million daily riders. We also hope he will continue the innovative service improvements executed by his predecessor, including subway countdown clocks, rapid bus service, and nonstop tolling."
Cuomo also appointed two women to serve in key transportation posts: Nuria Fernandez, a former Federal Transit Administration official and Chicago Aviation Commissioner, who resigned under pressure from then Mayor Richard Daily after failing to close a deal with United Airlines. Fernandez will serve as the the MTA's CEO, and Karen Rae, who worked in the Obama Administration on high speed rail, will serve in the Governor's office as Deputy Secretary of Transportation.