Dueling Proposals for Penn Station Puts MTA and ASTM at Odds

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ASTM North America revealed plans and renderings for a $6 billion redevelopment of Pennsylvania Station that it claims would be cheaper than the plan favored by the Metropolitan Transportation Authority.

The proposal involves paying Madison Square Garden between $500 million to $1 billion to demolish the Hulu Theater in the western end of the stadium complex to create a new entrance to the Amtrak concourse with 55-foot ceiling heights, a mid-block train hall with an atrium, and a revamped facade that would complement the existing MSG on top. ASTM, however, is adamant that getting rid of the theater will cost less than $500 million while the MTA is estimating the cost at about $1 billion.

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The proposal has put the MTA at odds with its former chairman, Patrick Foye, who serves as CEO of ASTM North America since Janno Lieber was chosen to lead the state transportation agency in early 2022.

“We have stated a very modest request that there be a competitive process open to all bidders,” Foye said Wednesday during a briefing about ASTM’s plan. “We think that the appropriate approach here is a competitive process for a master developer that puts everybody on a level playing field.”

The new proposal follows a Monday announcement by Gov. Kathy Hochul that the state was cutting Vornado Realty Trust out of the financing plan for Penn Station’s rebuild and pushing the preliminary design process ahead with a project team consisting of engineering firm WSP, architecture firm FXCollaborative and architect John McAslan.

This existing plan would cost about $7 billion.

The MTA also sees ASTM’s plan as having unnecessary costs, such as paying MSG for the Hulu Theater, and would essentially make the agency indebted to the design firm, according to an MTA source. 

After the $6 million buildout of the new station is completed in a projected 10 years, ASTM’s proposal outlines the firm staying on as an operations manager for a period of 50 years, collecting money from the MTA, Amtrak and NJTransit as a return on its investment. This would cost the MTA money down the line, according to the source.

ASTM foresees a return of about 8 to 11 percent on its investment.

The MTA also disagreed with the layout of the design, as 70 percent of Penn Station’s users go east toward the No. 1, 2 and 3 trains rather than toward Eighth Avenue. The entrance with the 55-foot ceiling heights on that end would also be moot, considering that commuters already have a similar high-ceiling space in the adjacent Moynihan Train Hall.

But it’s not a done deal with the existing project team, according to the source. A finalized plan will also likely launch a request for proposals process for the design-build phase.

Moreover, the MTA does not see the Hulu Theater as being worth almost $1 billion to remove because MSG has lost money on the venture.

Mark Hallum can be reached at mhallum@commercialobserver.com.