Metro Spending Often Veers From Core Transit Mission

When Metro bought the warehouse five years ago to house repair shops and training labs for transit workers, senior managers told the board the total cost to buy and renovate it would not exceed $36 million, the space would be filled with employees by 2005 and, in the interim, Metro could net $6 million by renting out unused portions.

None of those predictions turned out to be true.

The agency has spent nearly $40 million and plans $10 million in additional renovations to the building, which is named for a former Metro general manager. Twenty-five percent of the facility remains untouched warehouse space, agency officials said.

Metro initially rented some unused space, but the tenant left after 14 months, and Metro never sought a replacement. The rent netted about 10 percent of the money managers promised the board, records show.

Once the warehouse for the Hechinger home improvement chain, the concrete and steel building is more than twice as large as the main terminal at Reagan National Airport. Classrooms were silent on a recent weekday, their benches vacant and computers dark. Office after office was empty. Behind the locked door of a carpeted room marked "library," the only contents were a few sagging cardboard boxes. Another locked door opened to a bare, two-story room the size of a supermarket.

The projected cost of the building could have paid for about half of the new buses Metro says it needs. Charles Deegan, a new Metro board member from Prince George's County, questioned the agency's priorities and the purchase.

"It's a terrible waste of space," he said. "It reminds me of the back lot of Universal Studios."

White defended the purchase, saying 1,000 employees signed a petition asking for more space. "Over the long term, that's as good an investment as buying buses," he said. If Metro made any mistakes it was that "we just lost sight of what happened after we acquired it," he said, adding that the agency will grow into the building in the future.

Deegan was skeptical. "I guess it depends on what you consider the future. Is it 2000-something or 2100-something?" he said.

Wireless Revenue

Compared with other subway systems, Metro does a good job of attracting advertising on buses and trains and inside stations. And it has an aggressive program to sell or lease real estate around its stations. Such efforts brought in $83 million last year.

But it has failed to match other agencies on one potentially lucrative source of revenue: leasing space to companies that wire tunnels for underground cell phone service.

Metro was the first transit system in the country to offer underground cell phone service. Records show the 1993 deal it inked with Bell Atlantic Mobile has brought in $331,000 in a dozen years, or $27,583 a year.

By comparison, the Port Authority of New York and New Jersey received $786,000 last year in a deal with New York Telecom Partners to wire the Lincoln and Holland tunnels. Spokeswoman Tiffany Townsend estimated that the agreement will bring in at least $800,000 annually for 15 years.

Boston transit officials said they struck a deal to wire four subway stations that guarantees the system $1 million annually for four years and could net up to $15 million over 15 years.

Despite the relatively meager returns on its contract, Metro renewed it in 2001 with Bell Atlantic's successor, Verizon, and extended it to 2017 without negotiating better terms or seeking other offers.

O'Keeffe, Metro's general counsel, said that the agency needed an underground emergency radio network and that Verizon agreed to pay $7.6 million of the cost. "We thought this was a good deal," she said.