Hochul Abandons Penn Station Office Plans, Kicks Off Design Process for Renovation

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Gov. Kathy Hochul officially announced Monday that she was “decoupling” the renovation of Pennsylvania Station from the state’s effort to rezone and develop the neighborhood around it into office towers.

In a press conference at the station’s new Long Island Rail Road corridor on Monday, Hochul explained that she wanted to focus on creating a new design for Penn Station rather than delaying the project further by keeping it tied to the controversial office development, which was paused last year as demand for office space declined.

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“We’re decoupling this from the prior plan,” said Hochul. “That does not mean we’re not going to be building office space here at some point. … But I no longer want that to be a delay to this process, which I will be moving forward today.

“While the demand for office space is down right now, we believe that this will be temporary,” Hochul added. “But you know my commitment to building housing. I want to see more housing built, even in this place.”

Hochul said that she was “kicking off the design process” for the station on Monday, and was looking for new architecture and engineering firms to submit proposals that would bring more light and air into the station. The governor’s office also released updated renderings from the existing project team, which consists of engineering firm WSP, architecture firm FXCollaborative and architect John McAslan.

The General Project Plan for the area around Penn had been developed by disgraced ex-Gov. Andrew Cuomo, who believed that property tax revenues from office development could help the state fund the revamp of the decaying train station. Cuomo also opened Moynihan Train Hall in the James A. Farley Building in early 2021, allowing Long Island Rail Road and Amtrak customers to board trains from across Eighth Avenue.

Vornado Realty Trust (VNO), which owns many of the properties by Penn, said last year that it had paused its office development plans next door because of high interest rates for construction loans and declining office demand. It has already demolished much of the Hotel Pennsylvania on Seventh Avenue across from the station, where it plans to build a massive office tower dubbed “Penn15.”

Metropolitan Transportation Authority Chairman Janno Lieber said that as part of the renovation of Penn, he wanted to improve Madison Square Garden’s access to its own loading docks, so that West 33rd Street can become a more pleasant pedestrian plaza.

“What we’re proposing is for Madison Square Garden to be able to use its own loading dock without parking trucks on 33rd Street and to turn 33rd Street into the kind of dynamic public space that folks in this neighborhood are demanding and looking for,” said Lieber.

The MTA has widened the LIRR concourse, raised its ceiling by 18 feet, and constructed a new entrance to Penn on Seventh Avenue. However, New Jersey Transit has made few updates to its crowded waiting areas next door. Amtrak has also invested $300 million into its portions of the station over the past five years, largely improving lighting and circulation at track level.

Thus far, New York State has appropriated $1.3 billion for the reconstruction of Penn, and is awaiting federal funding from the Infrastructure Investment and Jobs Act. A press release from the governor’s office claims that if the state receives enough federal funding, it will not need the proceeds from Vornado’s office developments.

Rebecca Baird-Remba can be reached at rbairdremba@commercialobserver.com.