Metro's managers, casting about for new sources of cash, are considering charging annual fees to stores and offices that have their own special entrances to subway stations.
Developers of complexes tied directly in to subway stations already have to pay construction costs for their entrances, and in the past have had to pay a one-time fee. But Metro planners say the need for new funds may force them to try the annual charges, which they say could mean "millions of dollars" in income for the perenially strapped transportation system.
The Metro board of directors is expected to decide within the next two weeks whether it will authorize the transit system staff to establish sizes and types of payments charged to merchants and developers at eight stations. Buildings that already have the entrances, such as Woodward & Lothrop's store at Metro Center, would not have to pay.
Developers are, predictably, very unhappy with the idea, and Metro itself seems to have some reservations. Last July, when board members authorized the transit system staff to begin discussing possible agreements with businesses, they also said they wanted to reconsider whether Metro will actually go through with the charges.
Richard A. Castaldi, new chairman of the transit authority board, said he believes "there's potential" for agreements that would be "fair to entrepreneurs and also to Metro and those who use it." Businesses getting "a lot of ridership through their doors should share in some of the costs," he added. "If the Metro closed down, I am sure they would be adversely affected. So we would like to make it a two-way street if possible."
The District government, however, fears that ongoing charges will discourage development the city needs, said Rev. Jerry A. Moore, Jr., former chairman and now second vice chairman of the Metro board.
The city "has been working out a comprehensive development plan and we are trying to attract business to the city," said Moore. Metro fees could be an "added burden to the cost of doing business" and might deter developers.
Among the unhappy businessmen who would be affected by direct-access fees is Hugh Mulligan, a spokesman for the developers of the Olmstead Foundation Building to be constructed at Clarendon, who called the proposal for ongoing fees "a tremendous deterrent to developers and grossly unfair."
A spokesman for Mazza Gallerie, the posh shopping center near the Friendship Heights Metrorail, said "it is not so clear as to whether most people would come by train or would still want to come here by car." Another "issue is income levels," said Donal O'Connell of Prudential Insurance Co., managing partner of the firm that owns the shopping mall. "Obviously when you are talking about households with income above $50,000, it doesn't matter how much gas costs," he said.
Developers of the Olmstead building, a 14-story, 250,000-square-foot office and retail structure, feel "we are doing the community a service by providing a more convenient access to Metro for them," said Mulligan. "Arlington County paid for the knockout panels which were installed in Metro when the station was built, to encourage developers to tie into them. Why should we pay?"
From Metro's standpoint, however, sharing in the profits that accrue to companies because of extra business the trains bring in will help the transit authority keep down fares.
Studies show a higher volume of customers at stores and other businesses with direct access to Metro, said Henry Cord, head of the transit authority's development branch.
A consultant's study shows that Metro could expect to receive $60 million to $75 million over the next 20 years from "benefit sharing" agreements involving as many as 150 direct-access projects when the full 86-station system is completed, according to a summary of the Gladstone Associates report.
The consultants also have proposed methods for determining the amounts of payments by comparing amounts of expenses and incomes with and without direct access. In a hypothetical case prepared for the Metro board of directors, a project with direct connections between businesses and the station was worth about $800,000 more than its value without the direct access.
If the transit authority "has negotiated to share in approximately 50 percent of the net benefit on the basis of a 20-year access agreement," and if the agreement has a 2 percent annual escalator, Metro would receive $20,000 the first year, and more than $29,700 in the 20th year.
The transit authority hopes to begin negotiations soon with developers and merchants at these stations: Bethesda, Clarendon, Farragut North (Washington Square), Friendship Heights, Gallery Place, Huntington (the Montebello condominium complex), Metro Center and Silver Spring.
"System interface projects" (Metro jargon for passageway and doors leading directly into shopping malls or stores from subway stations) already exists at seven stations in the system: Woodward & Lothrop stores at Metro Center and Friendship Heights, International Square, Crystal City, L'Enfant Plaza and Pentagon City.