State Board Unanimously Approves Penn Station General Plan
By Mark Hallum July 21, 2022 2:37 pm
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The Empire State Development (ESD) board voted Thursday morning to adopt the general project plan for Pennsylvania Station’s rehabilitation, which is set to be funded partly through private development surrounding the transit hub.
The project to overhaul the worst part of some New Yorker’s commute will cost in excess of $7.5 billion, bringing about more entrances, better natural light, higher ceilings and a possible expansion to the station. The plan — voted unanimously in favor by all eight members of the board — will green light the recently agreed upon funding plan. New York state will cover a quarter of the cost with 12.5 percent coming from the city. Much of that will be raised in the form of payments-in-lieu-of-taxes (PILOTs) from developers such as Vornado Realty Trust (VNO).
Up to 75 percent of the balance for the station’s renovation will have to come from the federal government and other state partners, such as the state of New Jersey or Amtrak, ESD said in the meeting.
The state will sell development rights to private companies and collect PILOTs on new office buildings, which it expects will bring in $4.1 billion to fund New York’s share of Penn Station upgrades.
“The [general project plan] is the result of input from the public, elected officials and key stakeholders to deliver significant public realm and transit improvements across the district,” Vornado said in a statement. “Vornado remains committed to a GPP that’s transformative for the region and has a strong record of working on successful public-private partnerships in the neighborhood that opened Moynihan Train Hall, completed two new station entrances at 33rd and 34th Streets, and will deliver a new LIRR concourse.”
Up to 18 million square feet of commercial space will be allowed to be developed this way and much of the PILOT funding will come from office and retail leases.
The city and state reached the funding deal earlier this week after a report from watchdog group, Reinvent Albany, claimed that the plan for Penn Stations redevelopment fell about $3 billion short of the mark. It also said that the public-private partnership was not enough to bring plan — created under former Gov. Andrew Cuomo’s administration — into existence.
Despite the criticisms of some over the funding, the much-needed renovations to the station has plenty of support.
“This is one of the most important infrastructure priorities of our lifetime — no hyperbole,” Carlo Scissura, CEO of the New York Building Congress, said in a statement. “Not to mention the thousands of new jobs created and the economic boost a reimagined Penn Station and surrounding community will deliver for the entire region. Now let’s get shovels in the ground and build for the future.”
The general project plan has undergone some changes since Cuomo left his post and was replaced byGov. Kathy Hochul amid sexual misconduct allegations within the executive chamber. Hochul’s administration reduced the allowable heights of some of the buildings protecting views of the Empire State Building and added about 1,800 apartments, 540 of which would be affordable, into the proposal.
Mark Hallum can be reached at mhallum@commercialobserver.com.
