The redevelopment would be one of the largest real estate projects in United States history: about 18 million square feet of mostly office space, up to 1,800 residential units, retail space and a hotel. At the center would be a renovated Penn Station, which sits beneath Madison Square Garden and served 650,000 riders each week before the pandemic. The board’s approval clears the way for an application for federal funding to help pay for the station upgrade, which is expected to cost about $7 billion. New York expects about half of that amount to come from Washington.
How would Penn Station change?
The new Penn Station won’t add new tracks or additional rail, but it will fix the most common complaints of commuters: the facility is cramped and dreary. It would have higher ceilings to bring in more natural light, 18 new entrances and larger underpasses to navigate between subway platforms and train tracks. Outside the station, a new 0.7 acre plaza will have wider sidewalks, bike lanes and landscaped seating areas.
How will commuters benefit?
The overhaul of the 54-year-old station was supposed to be the final phase of the extensive project to add rail tunnels under the Hudson River, known as the Gateway. But Gov. Kathy Hotchul pushed for the station’s renovation to happen sooner. In June, the Metropolitan Transportation Authority asked for proposals from architectural design firms to come up with a way to “relieve congestion and improve passenger flow” at the station. Ms Hochul said the redeveloped station would be a “single level station with high ceilings that welcome natural light”. Amtrak owns the station, but the Long Island Railroad and New Jersey Transit are its largest users. It connects to the new Moynihan Train Hall, which is used by Amtrak and the LIRR The state has not yet chosen a developer for the new station.
How will commuters not benefit?
The redevelopment, by itself, will not solve the station’s traffic problems. Before the pandemic, Penn Station was overwhelmed at rush hour with packed commuter trains arriving from Long Island and New Jersey clogging the tracks below Midtown. The station would have to be expanded, with more tracks, to handle the additional trains that the new Hudson Tunnels could provide. Apart from the Penn Station overhaul, state officials have also approved a plan to build a new train hall south of the site that will increase rail and passenger capacity, with new tracks and platforms. That project could cost $13 billion and would require federal approval.
Whose idea was this?
Former Gov. Andrew M. Cuomo first proposed the project. Ms. Hochul, however, embraced the plan, calling Penn Station “hell.” State officials have linked the upgraded Penn Station to the construction of the 10 towers, arguing that the larger development is needed to help pay for transit renovations. The project overrides New York’s local control to allow developers to build taller buildings than otherwise allowed. Mayor Eric Adams supported the plan. Many other elected officials and community members have opposed the redevelopment’s scale, tax breaks and complicated financing structure. Opponents fear taxpayers will be on the hook if the project fails to generate the revenue supporters expect.
How would Midtown change?
The most notable changes to the area could be the largest real estate project surrounding Penn Station. The new towers will be among the tallest in New York City, topping 1,000 feet in height, though final dimensions will be decided later. The project calls for the demolition of several existing buildings, possibly including a 150-year-old Roman Catholic church, and will reshape the Manhattan skyline between the Hudson Yards neighborhood to the west and the Empire State Building to the east. Some of the largest buildings would rise on the block south of the existing Penn Station, spanning West 30th Street between Seventh and Eighth Avenues, and would outsize almost any commercial building in New York. Today, this block includes the church, the Roman Catholic Church of St. John the Baptist and a garage. A monastery previously on this road had already been demolished. The final building will be completed in 2044. The state’s plan does not address what, if anything, will happen to Madison Square Garden, whose license to operate the venue expires in 2023.
What’s up with these towers?
Most of the new towers will rise on sites owned by Vornado Realty Trust, the publicly traded company that is one of the largest developers of office space in Manhattan. It owns about 20 million square feet of office space in the city, about half of which is near Penn Station. Its CEO, Steven Roth, has called the redevelopment of the Penn Station area the company’s “Promised Land” and has positioned its current and future towers there as New York’s home for the world’s biggest tech companies. Its largest tenant, Meta, the company formerly known as Facebook, leases 1.4 million square feet from Vornado, including space in the Farley Building across from Penn Station. The new towers at Vornado’s five properties around Penn Station could exceed 10 million square feet — more than half the total size of the redevelopment — and consist of a hotel, offices, retail and up to 1,256 residential units. Their construction would require the demolition of a large area of facilities, including a Hooters, an Irish restaurant and various tourist shops. Mr. Roth, along with his family members, gave Mr. Cuomo about $400,000 in campaign donations before he resigned, and Mr. Roth last year gave the maximum, $69,700, to Ms. Hotchul’s campaign. He recently gave $22,600 to the campaign of Lt. Gov. Antonio Delgado, who will appear on the ballot with Ms. Hochul in November. State officials and a Vornado spokesman said the donations did not affect Vornado’s role in the project.
Who would pay for the renovation?
The MTA is leading the $7 billion renovation project at the station, but New York expects the federal government, Amtrak and New Jersey to contribute most of the money. An agreement reached with New York City allows payments from the developers of the 10 towers to cover part of the costs of station renovations, all of the costs of pedestrian and street improvements, and half of the costs of new subway entrances and underground spaces. Payments from developers will come from office leases, retail sales, apartment rentals and the hotel. That arrangement is part of a complex financial system known as payments in lieu of taxes, or PILOTs, that would suspend additional property taxes on buildings for decades after they are built.
What’s in it for developers?
Tax breaks for developers could be lucrative, a recent analysis found, potentially including $1.2 billion in tax breaks for Vornado, the region’s largest landowner. The city will not benefit from additional property taxes on the new buildings until the station improvements are paid off.
Who doesn’t love this design?
There was strong opposition from the start from many elected officials and community leaders. Opponents include state Sen. Liz Krueger, who has questioned the wisdom of betting on New York office real estate at a time when the pandemic has upended the way people work and led companies to shed space at record rates. Also, the new office buildings would compete with Hudson Yards, the newest office district in Manhattan, which has a similarly structured property tax arrangement. A report issued last month by the city’s Independent Budget Office concluded that the state had provided too little information about the financing plan to determine whether it was sustainable or whether taxpayers would have to foot the bill if revenue from the new towers are not implemented. Another state senator from Manhattan, Brad Holman, said taxpayers should be informed of the project’s financial risks before the council votes to approve the master plan. He was among a group of 15 senators who sent a letter to state officials in March demanding they “stop the Penn Station plan until these answers are provided.”
