The Metropolitan Transportation Authority voted yesterday to negotiate to sell development rights on Manhattan’s West Side to New York City and announced plans for a possible subway fare hike in September 2007.

The rail yards resolution passed 11 to one, opposed only by Suffolk County representative and board member Mitchell Pally. It allows chairman Peter Kalikow and executive director Katherine Lapp to discuss plans for the extension of the no. 7 subway line. It calls for an updated appraisal of the Western Rail Yard — site of the rejected New York Jets stadium — and a first-time appraisal of the Eastern Rail Yard to determine the fair market value of each property. The city has offered $500 million, and Eliot Spitzer, a Democratic candidate for governor, has called for an open bidding process.

“There are major portions of the proposal put forth by the city that are intriguing and work to the MTA’s advantage,” Mr. Kalikow said. He expressed his optimism about the prospective deal by saying the city’s purchase of the land could help close the MTA’s projected 2008, 2009, and 2010 deficits, which amount to $905 million, $1.37 billion, and $1.48 billion, respectively. The MTA attributes the deficits to increased interest rates, fuel and energy costs, and health, welfare, and labor costs.

“The point is we would be receiving money; we would be well on our way to filling the billion dollar gap that our capital program requires,” Mr. Kalikow said.

Once MTA and city officials meet for negotiation, details must be presented to the board for its approval at the next meeting, scheduled for September 27, or at a special meeting to be convened by Mr. Kalikow, whichever comes sooner. “Time is of the essence,” he said.

Though Mr. Kalikow has promised two new appraisals, Mr. Pally and other board members question whether higher figures will cause Mr. Kalikow to negotiate for a higher price.

“My deep concern is that the MTA shows some backbone, that they get the top dollar for the price — it’s clearly the most valuable, undeveloped area in Manhattan,” a staff attorney for the Straphangers Campaign, Gene Russianoff, said. He said MTA board members share his sentiment and want Mr. Kalikow to stand up for the riding public and not act as a doormat. If the MTA gets top dollar for the West Side rail yards, the sale may help close the MTA’s billion-dollar deficit projected for the next three years and perhaps deter a subway fare hike.

“I feel that we are not receiving the full value of the property and therefore I cannot support the resolution,” Mr. Pally said.

“The appraisals should serve some purpose, not just for the board,” board member James Blair said. “It should play in the negotiations itself.”

Mr. Kalikow said the sale, if consummated, would probably end up at a price near the city’s offer.”My hunch is that … our discussions probably would not allow for any kind of meaningful increase,” he said. “If the city prospers, we prosper. We need to make sure that we understand that we are not in an adversarial process.”

New York City Transit chairman and board member Barry Feinstein asked for an assurance that the no. 7 subway line extension would be built come “hell or high water.” The city has proposed a $3 billion financing plan that includes $2 billion in bonds to extend the no. 7 line, which runs between Manhattan and Queens, the first extension of the subway system in decades. “Katie and I will make sure that the no. 7 extension will be part of any deal we do with the selling of the Western Yards,” Mr. Kalikow assured.