NEW YORK — New York City and the state of New York have agreed on a plan to pay for renovation of Penn Station, the nation’s busiest passenger rail facility, and redevelopment of its surrounding neighborhood.
New York Gov. Kathy Hochul and Mayor Eric Adams announced the agreement on Monday. As outlined by the website Gothamist, the deal will allow developers to build 10 high-rise buildings — nine office buildings and one residential skyscraper — with fees assessed in place of taxes that will go toward rebuilding of the station and improving amenities in the neighborhood.
“The current Penn Station is unsightly, inefficient, and impossible to navigate, and New York commuters deserve better,” Hochul said in a press release. “This agreement brings us one step closer to a beautiful, modern station worthy of New York with vibrant open space, lively streetscapes, and better, more seamless connections to local transit.”
Said Adams, “A state-of-the-art transportation system is at the heart of our ability to have a prosperous life and a prosperous city, and the key to an equitable recovery. The new vision for Penn Station is to our generation what the Empire State Building was to previous generations: a symbol of our resiliency and a project that will define our city for decades to come.”
The plan has been criticized for a lack of transparency and the potential cost to taxpayers, with a government watchdog group, Reinvent Albany, estimating lead developer Vornado Realty could receive a $1.2 billion tax break. The news website amNY.com reports Reinvent Albany Executive Director John Kaenhy questioned the lack of a signed agreement or specifics such as the amount of tax revenue the city will lose.
“This framework agreement is embarrassing,” Kaehny told amNY. “It answers zero of the important questions of why this project should be funded though [payments in lieu of taxes, or PILOTs] versus conventional financing.”
Gothamist reports that Adams, at an unrelated event Thursday, said, “We know the devil is still in the details; we’re still mapping it out, but we feel confident that this project is a much-needed improvement in the Penn Station area.”
Under the agreement announced Monday, PILOTs will pay for 100% of improvements to local public infrastructure such as streets and sidewalks, 50% of improvements to transit infrastructure including subway entrances and concourses, and 12.5% of the cost of reconstruction and potential expansion of Penn Station. Remaining funding would come from the federal government, New Jersey, New York State, Amtrak, and other sources.
Then Gov. Andrew Cuomo unveiled a plan for the construction of skyscrapers to offset rebuilding Penn Station and adding nine new tracks last year [see “New York governor, MTA unveil proposals …,” Trains News Wire, April 22, 2021]; Hochul released her revised version of the plan in November.
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