Non farebox revenue

This is a very challenging funding time for CTA.  We depend on the State for about 50 percent of our operations funding, w/the other 50 percent coming from customers (through the fare box) and other sources, including some not-yet developed revenue streams.  CTA is actively seeking to find these other sources of revenue so we can continue to meet increasing customer demand.

A significant move to develop a new source of non fare box revenue is the new management of CTA's real estate assets.  As you may recall, a few years ago CTA used the national transit consulting firm AECOM Consult (AECOM) to review CTA operations and provide recommendations on how CTA could increase revenue, enhance efficiencies and reduce costs while improving the customer experience.  Many recommendations have since been implemented by CTA, and one major area of overhaul AECOM recommended was overhauling CTA's Real Estate department. CTA has now moved to introduce private sector management and leasing practices to its real estate division so that we can better manage our real estate assets.  On August 1, 2008 CTA awarded a five year contract to Jones Lang LaSalle (JLL) to act as CTA’s broker on real estate transactions; manage CTA’s concessions (including leases); and represent CTA in transit oriented development opportunities. 

From this partnership, I expect to see an significant increase in non-farebox revenue--and that revenue will be pumped back into  transit operations.  These are tough funding times, and given our mission, real estate is not one of CTA’s core functions.  JLL, however, is in the business of managing and brokering real estate and has the experience and expertise to generate the revenue CTA so badly needs.  Additionally, JLL brings:

• A developed marketing approach. CTA does not have the internal staff to market larger entities that are more likely to seek long term leases and invest capital which, in turn, will bring in increased revenue.

• Experienced marketing professionals that can create new and innovative approaches for concession opportunities.

• The ability to leverage leasing relationships to CTA’s benefit.

• Transit Oriented Development (TOD) which will create development opportunities making the Chicago area a more transit friendly environment. JLL is an experienced TOD contractor that can create an effective TOD strategic plan and bring transit and financial benefits to CTA.

CTA owes it to its customers to take advantage of public/private partnerships to generate much needed revenue for our core transit operations.  This partnership allows CTA to continue to control its real estate assets but leverage them in a way that makes sense given the current funding environment.