Vornado Considers Tennis Courts to Generate Cash at Penn 15

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Vornado Realty Trust (VNO) could be temporarily ditching a long-planned office tower in Penn District in favor of a Midtown tennis court with a 10-story billboard attached.

The real estate investment trust drew up the sporty scenario, along with a number of other scenes, and presented it to city planning officials as an “interim” option for 15 Penn Plaza, Crain’s New York Business reported Wednesday

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The Penn Platform renderings — which include scenes of a basketball game, a red carpet New York Fashion Week event, and the U.S. Open — have also been depicted in a series of slides tucked away on Vornado’s marketing website for an unknown amount of time. 

“We are currently considering a number of potential interim options for the Hotel Pennsylvania site,” a spokesperson for Vornado said in a statement. “The renderings in the presentation are for conceptual purposes.” 

But this is far from the plan Vornado has been pitching publicly for more than a decade for the former Pennsylvania Hotel site. The 80,000-square-foot block on Seventh Avenue between West 32nd and West 33rd streets was instead proposed to become a 2.7 million-square-foot tower to rival the Empire State Building. The office behemoth would also be a revenue-generating property for Gov. Kathy Hochul’s plan to finance the overhaul of the city’s busiest transit hub, Pennsylvania Station.

But the pandemic’s toll on Manhattan’s office market gave Vornado cold feet, and the developer put its ambitious plans for Penn 15 on ice last year. Hochul followed suit by pausing the state’s economic development plan for the district.

Meanwhile, Vorando faced pressure from executives to come up with a plan to generate revenue at the stalled development site, fielding questions on it in an October earnings call.

“The answer is we are studying that right now,” Vornado Chief Financial Officer Michael Franco said on the call.  “It’s a great site in the center of the city, and whether it’s fashion shows or other temporary uses, we think there will be opportunities to generate some cash flow until the site is ready for development.”

It’s unclear when, or if, Vornado will pivot to tennis courts at the site, but the marketing brochure lists the Penn Platform’s availability as “early 2024.” Other brochures on Vornado’s website still show the office tower originally proposed.

For city planning officials, the tennis scenario could have big implications since the city was sidelined when the Empire State Development took over the approval process for the Penn District proposal years ago. But, if Vornado wants to veer off course, it may need to face the local land use public review process after all.

A spokesperson for the New York City Department of City Planning said it hasn’t yet determined if Vornado will need local zoning approval in order to pivot at Penn 15. 

“While everything is on pause, it makes sense to say ‘Let’s do something with this lot,’ ” the spokesperson said. “For now, it’s [to be determined] whether they need to study the environmental impact of a tennis court.”

The spokesperson said the potential impacts on traffic patterns and noise, among other factors, may need to be studied separately.

Abigail Nehring can be reached at anehring@commercialobserver.com.