![]() ![]() “It’s a question of the cart coming before the horse.” “If the premise of all of this is that the development and the PILOTs would fund the cost of the Penn Station upgrades, we need to know how much the Penn Station upgrades are going to cost,” Fauss said. The state could also purchase - at significant cost - the 5,600-seat Hulu Theater at Madison Square Garden, which would allow the MTA to construct a new entrance to Penn Station along Eighth Avenue. Such an expansion would require the state to acquire several properties along West 31st Street, either through typical real estate deals or the lengthy and expensive eminent domain process. Various questions about the station renovation remain unanswered, including whether the three competing railroads with Penn Station would want to expand their tracks to the south. The MTA unveiled two Penn Station renovation proposals this April, but it has not attached a price tag to either of them. I think the public deserves a full public accounting of how this could work, and who pays for it.” They exempt it from ULURP development process, but at the same time they are announcing a structure where city tax dollars could be siphoned off to finance the project.”Ĭomparing the Penn Station renovation to Hudson Yards, she asked, “What happens if the development doesn’t happen the way the state says it will? Whether the state or the city pays, it will probably end up being city taxpayers who are responsible. “One of the limitations of an EIS -type process for these megaprojects is that there’s not really a requirement to explain the financing. “The GPP mentioned that the financing structure could include payments in lieu of taxes but we don’t know the full scope of what they could or would do,” she explained. ![]() Rachel Fauss, a research analyst at watchdog group Reinvent Albany, lamented the lack of transparency around the proposed PILOT structure and how the Penn Station upgrades would be financed. Developers would also likely be able to pay for subway upgrades and street improvements - like bike lanes, sidewalk widenings, and new public plazas - in exchange for the right to build larger buildings, according to the GPP documents. It might involve property owners making payments in lieu of taxes (PILOTs), a controversial mechanism that was also used to finance the construction of the 7 line extension to Hudson Yards - and left the city holding the bag for the unfunded costs of the project. More importantly, the state and the city have not settled on how the owners of the buildings’ sites would contribute to the renovation and expansion of Penn Station, which would likely run to the tens of billions. The plan predates the pandemic, which cast doubt on whether that many buildings - most of them office - would actually fully fill with tenants, given shifts to hybrid and remote work. The General Project Plan (GPP), which is a rezoning proposal driven by Empire State Development rather than by city agencies, allows for up to 10 new buildings to be constructed around Penn Station. And, in January, the real estate investment trust - in conjunction with the Metropolitan Transportation Authority - opened a new, glassy entrance to Penn Station at the corner of West 33rd Street and Seventh Avenue that includes wayfinding signage for the various train lines and a curved, line map mural of New York City. ![]() Together with the Empire State Development Corporation, Vornado helped convert the Farley Post Office building across Eighth Avenue from Penn Station into Moynihan Train Hall. Vornado Realty Trust, which declined to comment for this story, owns several of the properties adjacent to, and on top of, Penn Station, including One and Two Penn Plaza, the Hotel Pennsylvania and the Manhattan Mall. ![]() While the zoning has not yet been finalized, it would likely cover several blocks between Ninth Avenue and Avenue of the Americas and from West 34th to West 30th streets. The Cuomo-era development plan - dubbed the Empire Station Complex - mostly offers a broad outline of what could be built or changed around Penn Plaza. It’s hampered by Madison Square Garden, which sits on top of it, and it was not designed to serve the 600,000 daily passengers that passed through it before the pandemic struck. The current version of Penn Station, which was built in the 1960s after the demolition of the iconic McKim, Mead & White-designed train station, has low ceilings and no natural light. SEE ALSO: Suburban Office Markets Enter Post-COVID Endgame ![]()
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