State's plan to redevelop around Penn Station getting pushback

A state proposal to redevelop real estate properties around Penn Station in order to fund improvements inside the LIRR's cramped Manhattan home is facing major pushback from city leaders and activists, especially given the reduced demand for office space as a result of the COVID-19 pandemic.

The state's plan — proposed by then-Gov. Andrew M. Cuomo in January 2020 and retooled by Gov. Kathy Hochul in November — calls for the construction of up to 10 towers surrounding Penn Station that primarily would feature retail and office space. The state would collect fees from leaseholders that would be used to support bonds for improvements at Penn Station.

Several opponents, including State Sen. Brad Hoylman (D-Manhattan), have questioned the proposal, which forgoes the usual New York City rezoning process in favor of a “general project plan” that allows the state to circumvent some local regulations.

“This is a project that Governor Hochul inherited from her predecessor. And I don’t think anyone, if given the opportunity, would have designed it this way,” Hoylman said in an interview. “The general project plan is taking a sledgehammer to what is a very fragile midtown ecosystem.”

The overhauled Penn Station — as depicted in artists' renderings — would feature a spacious, sunlit Long Island Rail Road customer concourse with wide walkways and tall ceilings. The upgrades, estimated to cost $7 billion, would be accomplished, in part, by knocking down much of Amtrak's upper level. 

Above ground, the new buildings would allow for 18 additional entrances to Penn Station, and new underground commuter walkways, including one linking the station to the Herald Square transit hub on Sixth Avenue. Hochul has said the state's proposed upgrades to Penn Station would take about five years.

"If you spend time on Seventh Avenue in the rush, even now during COVID, you feel this incredible pedestrian gridlock. We need people to be able to move in and out of Penn Station, especially as ridership continues to grow over time," said Janno Lieber, chairman and CEO of the Metropolitan Transportation Authority. "There are a lot of reasons why the broader vision of an expanded or improved Midtown-West neighborhood actually benefits the transportation side of the equation."

The proposal is expected to go before the state's Empire State Development board for approval this summer. In addition, individual agreements would have to be worked out between the state and property owners before the project can proceed. A related effort to purchase the block south of Penn Station in order to build tracks underneath also would require federal approval.

Hicksville commuter Caroline Senatore said she has mixed feelings about the redevelopment.

“Obviously, they need to do something about Penn Station. It’s got to be a balance,” said Senatore, whose aspirations for Penn Station are more modest than what’s being discussed.

“I’m not going to say no to improvements, but substantial improvements to the life of a Long Island Rail Road commuter would be changes to service, the lack of communication about delays. A pretty building is not going to change that."

That’s a take shared by most railroad riders, according to LIRR Commuter Council chairman Gerard Bringmann. Because riders spend relatively little time in Penn Station, or the surrounding neighborhood, a major overhaul of the station and its surrounding community is “not a major concern of the riders.”

“Just give us a nice, modern, clean Penn Station, where we can get a cup of coffee in the morning, where we can get a slice of pizza in the afternoon or get our newspaper … That’s what we’re longing for,” Bringmann said. “Don’t get me wrong: We’d love to have a nice Penn Station to walk into. But it doesn’t necessarily need to be palatial.”

Project skeptics also have questioned if the proposed 18 million square feet in new commercial space makes sense in a post-COVID-19 New York City, where many companies are still allowing employees to work remotely some or all of the time. LIRR weekday ridership remains just over 50% of pre-pandemic levels.

Holly Leicht, an adviser at Empire State Development, said the state is confident “there is still, absolutely, a market for office space” in Manhattan. Because they would be near the railroad and could include modern, hybrid workspace, the new buildings could be especially attractive to workers who want flexibility and a short commute, Empire State officials have said. The state also is banking on subsidies from those new commercial tenants to help fund the transformation of Penn Station.

“Yes, commuter patterns will change. … It’s entirely possible that not everybody is coming in at 9 o’clock and leaving at 6 o’clock every day," Leicht said. "But we still think that there’s going to be very strong commuter traffic coming through. And people will want to be right near a transit hub. It’s the future for sustainable growth in New York.”

Real estate tech firm CommercialEdge reported Manhattan's office vacancy rate at 14.4% in March. A November report from the State Comptroller’s Office showed the vacancy rate for New York City office space was 18.3% in the second quarter of 2021 — “a level not seen in over 30 years." 

Erecting the towers would mean razing several structures more than a century old. Interior demolition work already has started on the Hotel Pennsylvania just across from Penn Station on Seventh Avenue.

Though not deemed a historic landmark, the hotel, which opened in 1919, features the pre-World War II masonry that some city historians said embodies the gritty spirit of the West Side community surrounding Penn Station. They said that spirit is threatened by the redevelopment plan, which would replace many of the old masonry structures with sleek, modern office towers — similar to those found in the Hudson Yards development west of the station.

“I think when the wrecking ball hits the Hotel Pennsylvania … you’re going to see a lot of the public finally scrub eyes clean and say, ‘What the heck are we allowing to happen here?’ ” said Samuel Turvey, chairman of ReThink Penn Station NYC, which opposes the plan. "They're seeing a lot of prewar architecture destroyed and anonymous glass boxes put in their place."

Vornado Realty Trust, the company that owns and is redeveloping much of the properties surrounding Penn Station, pointed out that the hotel has been slated for demolition since 2010 and closed since the COVID-19 outbreak in early 2020. The hotel is set to be replaced by a luxury office reaching 1,200 feet tall — nearly the height of the Empire State Building. Vornado officials declined a request for comment.

Opponents of the plan also have suggested the state could seek to fund the Penn Station improvements through the $1 trillion infrastructure bill signed into law by President Joe Biden in November, rather than through real estate deals. Asked about the prospect of seeking federal infrastructure funding to upgrade Penn Station, Lieber said the MTA "will pursue everything." But securing those funds is uncertain and could take years. Plus, Hochul has made fixing Penn Station a priority.

"We're trying to move forward as quickly as possible," Lieber said. "We need money now."

State officials also have said that, even with federal assistance, they'd likely still have to come up with state money to help fund the project. 

Architect Alexandros Washburn, a former chief urban designer for New York City, said the fundamental flaw in the proposal is that it “puts the cart before the horse” by prioritizing commercial development, rather than focusing on building a Penn Station that would, organically, attract development around it.

Getting it right, Washburn said, begins with removing a key constraint at Penn Station: Madison Square Garden, which has sat above the transit hub since the original station was demolished in 1963. Not having to work around the arena would allow for a more ambitious, and cost-efficient vision, Washburn said.

“We should be holding ourselves up to a higher standard," Washburn said. "Right now, anything is better than what Penn Station is.”

MTA and state officials have suggested that relocating Madison Square Garden would be cost-prohibitive to taxpayers and would delay Penn Station renovations by a decade or more. They want to get started with the station fixes soon after the scheduled December opening of East Side Access, which will relieve some of the pressure on Penn Station by giving the LIRR a second Manhattan home at Grand Central Terminal.

By Alfonso A. Castillo

alfonso.castillo@newsday.com@alfonsoreports

Alfonso Castillo has been reporting for Newsday since 1999 and covering the transportation beat since 2008. He grew up in the Bronx and Queens and now lives in Valley Stream with his wife and two sons.