An auditing firm has urged Metro officials to take steps to improve the way the transit authority negotiates deals with private developers for commercial projects near subway stations.
In a report released yesterday, Peat Marwick Mitchell & Co. cited several flaws in the authority's development practices, including a shortage of data about real estate trends and lack of an overall policy for arranging commercial projects.
The Metro system "is often forced to react to developer proposals without the advantage of a thorough knowledge of market conditions at a particular station site," the $40,000 audit report said.
Nevertheless, the auditors praised Metro's development program, saying it is viewed by transit officials in other cities as a national model. Metro officials said the auditors' recommendations are under review.
Metro's development efforts are aimed at obtaining additional revenue for the deficit-ridden transit system and increasing subway ridership. The audit report dealt with one aspect of the development program, the authority's practice of selling or leasing land it owns near rail stations for development.
The agency now is paid more than $1 million a year in rent from projects near seven subway stations in the District and Maryland, the report said.
Some officials, including Ralph L. Stanley, the Reagan administration's mass transit chief, have urged Washington area governments to consider new measures to increase revenues for Metro, including a possible tax or other fees on development ventures near rail stations.
The auditors recommended that the Metro system immediately start compiling data about all potential development sites near subway stations. Without such data, the report said, the authority may embark on poorly timed ventures or settle for inadequate rents.
The auditors urged Metro's board to draw up a development policy in an attempt to improve coordination with local governments and reduce controversy over development projects. "The failure to have this policy in place in the past has resulted in many weaknesses, both real and perceived," the report said.