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MTA Chief Lhota Plans to Quit, Clearing Path to City Hall

Dec. 19 (Bloomberg) -- Joseph Lhota, who led the New York subways’ return to service days after Sandy’s floodwaters inflicted the worst damage in the system’s 108-year history, has told associates he’ll resign Dec. 21 as the Metropolitan Transportation Authority chairman.

Lhota’s resignation would clear a path legally for him to pursue a campaign for mayor next year, if he so chooses. Lhota, a Republican, won’t announce his candidacy when he resigns, said an associate from his days in City Hall as a deputy to former Mayor Rudolph Giuliani. The associate asked to remain anonymous because he wasn’t authorized to speak about it publicly.

Lhota, 58, a former municipal-finance banker who was named chairman of the MTA a year ago by Governor Andrew Cuomo, a Democrat, is barred by state law from political participation. He would have to step down in order to campaign for mayor.

Advocates for his candidacy have sought to present their case to New York City Republican activists, including party chairmen in each of the five boroughs, friends said in interviews last month. One said yesterday that Lhota has informed Cuomo staff members of his intentions.

Some Republican county chairmen said they were interested.

“Joe Lhota’s candidacy would be one worth seriously considering, and frankly I would like to see him get involved,” said Robert Scamardella, who leads the Republican Party on Staten Island.

Republicans Outnumbered

Democratic voters outnumber Republicans in the city by about 6 to 1, a fact that hasn’t stopped non-Democrats from getting elected since 1993, when Giuliani first won the office.

Mayor Michael Bloomberg was first elected in 2001 as a Republican, and ran on the party’s ballot line to win three terms, although he dropped his formal affiliation and declared himself an independent in 2007. Bloomberg, the founder and majority owner of Bloomberg News parent Bloomberg LP, is barred legally from running for a fourth term.

Lhota won bipartisan praise for providing steady leadership last month in reviving a storm-paralyzed system that’s now almost fully restored. Sandy struck New York on Oct. 29 with hurricane-force winds and a tidal surge that inundated rail stations and tunnels. It coated electrical and communications equipment in the subways with corrosive saltwater, leaving almost $5 billion in damage.

Quinn’s Praise

One measure of Lhota’s popularity became evident Nov. 13, when sustained applause from business executives met City Council Speaker Christine Quinn’s praise of his performance, during a speech before the Association for a Better New York, a civic group. Quinn is a Democratic mayoral hopeful. The election is set for Nov. 5.

In Brooklyn, Republican County Chairman Craig Eaton said he received two calls before the Thanksgiving holiday from high-level Republicans who asked him to attend a meeting early next week to discuss a candidate they said they weren’t able to name. They provided enough information for him to assume they meant Lhota, Eaton said.

Eaton said that at the time, he supported Adolfo Carrion, 51, a former Democratic Bronx Borough President and urban policy adviser to President Barack Obama. Carrion has given up his party affiliation and expressed interest in running as a Republican.

Other former Democrats whom the county chairmen have been considering as potential mayoral candidates include George McDonald, 68, president of the Doe Fund, a nonprofit job-training program for the homeless; Tom Allon, 50, a newspaper publisher; and John Catsimatidis, 64, the billionaire leader of companies including the Red Apple and Gristede’s supermarket chains, Eaton said.

$13 Billion Budget

The MTA, with a proposed fiscal 2013 budget of about $13 billion, runs the city’s subways, buses and commuter trains, including Metro-North and the Long Island Rail Road, carrying 8.5 million riders a day. It also operates several bridges and tunnels, including the link between Brooklyn and Lower Manhattan, where Lhota ventured during Sandy’s peak.

Lhota started the job October 2011, replacing Jay Walder, who had run the agency since 2009 and left to become the chief executive officer of MTR Corp., Hong Kong’s urban rail operator.

The son of a New York City police officer, Lhota was a municipal-finance banker at Credit Suisse First Boston before joining the Giuliani administration in 1994 as finance commissioner.

As deputy mayor for operations on Sept. 11, 2001, Lhota helped coordinate the city’s response after two hijacked jets slammed into the World Trade Center in the worst attack on U.S. territory since Pearl Harbor. He set up an emergency center on a pier where agencies relocated and managed volunteer efforts and interagency communications after the Twin Towers fell.

He was at the Hugh L. Carey Brooklyn-Battery tunnel the night of Oct. 29 as Sandy’s storm surge produced record tides that carried water from the Hudson and East Rivers over barriers in Lower Manhattan, converging in a torrent that flooded underground roadways and poured into several subway entrances scattered throughout the 600-mile (965-kilometer) network.

To contact the reporter on this story: Henry Goldman in New York at hgoldman@bloomberg.net.

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

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