MTA approves new agency to run LIRR's future home at Grand Central Terminal

The MTA has formed a new agency to run the Long Island Rail Road’s future home at Grand Central Terminal.

The Metropolitan Transportation Authority Board last week unanimously voted to establish the Grand Central Madison Concourse Operating Co. — a "special purpose entity," technically separate from the LIRR — that will oversee much of the day-to-day functions of the new LIRR station once it opens.

The $11.2 billion East Side Access project is scheduled for completion in late 2022, 15 years after it broke ground. Major construction on the project, which aims to link the LIRR to Grand Central via newly excavated tunnels, wrapped up earlier this year, but various electric and communications systems, including railroad signals, still need to be installed.

Because the newly created tracks and station are not part of the LIRR’s territory, the MTA — the agency in charge of the railroad and of the project — has some leeway in its governance, and in the work rules and pay structure that would apply to the people who maintain them.

MTA officials said setting up an agency to operate East Side Access allows them to avoid tens of millions of dollars in costs associated with being regulated by the Federal Railroad Administration.

Acting MTA chairman and chief executive Janno Lieber acknowledged creation of the agency might appear to be "legal fiction" to some, but it addresses the reality that "we live in a world where the corporate form has real meaning and legal consequences."

"[It] is to the benefit of our passengers and the public that we're going to have this structure," Lieber said. "We're very happy that we were able to work this out consensually through collective bargaining with the key Long Island Rail Road unions."

The proposal initially rankled LIRR unions, which were concerned that the MTA would outsource to private contractors work that could go to railroad employees. MTA officials said they ultimately reached an agreement with labor leaders under which the LIRR’s existing workforce will handle rail-related work, including the operation of trains, maintenance of track leading into the new terminal, and some cleaning operations. The MTA expects to hire about 210 employees to carry out the work.

The agency, which does not have a budget yet, will look to hire outside, unionized contractors to operate and maintain the 350,000-square-foot concourse being built under the existing Grand Central Terminal, including by managing the 25,000 square feet of retail space there.

Anthony Simon, who heads the LIRR’s largest labor union, said, although both sides are now "in a better place," a deal has not yet been finalized.

"Our organization is working with the MTA on issues related to East Side Access work to bring LIRR service into Grand Central Terminal," said Simon, general chairman of the International Association of Sheet Metal, Air, Rail and Transportation Workers. "As always, we’re unable to share the details of negotiations, but are confident of a fair resolution."

The Grand Central Madison Concourse Operating Co. will be "minimally staffed" with fewer than 10 MTA employees overseeing the contractors, and will be headed by chief officers that hold other jobs at the MTA, according to agency documents. Those officers would not receive two salaries, but their existing pay could be adjusted to reflect their added responsibilities, MTA spokesman Aaron Donovan said.

By Alfonso A. Castillo

alfonso.castillo@newsday.com@alfonsoreports

Alfonso Castillo has been reporting for Newsday since 1999 and covering the transportation beat since 2008. He grew up in the Bronx and Queens and now lives in Valley Stream with his wife and two sons.