MTA, developer spar as $6 billion Penn Station reconstruction plan released

The MTA and a private developer are sparring over competing visions for a re-imagined Penn Station, with the MTA characterizing the firm’s proposal as a “bailout” of Madison Square Garden, and the firm dismissing the MTA’s plan as an unrealistic, “terrible idea.”

A day after Gov. Kathy Hochul said the state would begin accepting design proposals for a reconstructed Penn Station, Italian firm ASTM, at a closed-door briefing for reporters, offered a detailed look at its plan, which it says would take eight years to build and cost about $6 billion. That's at least $1 billion less than the estimated cost of the MTA's competing proposal.

In return, the firm wants to be paid a quarter-billion dollars a year to run the station.

The “linchpin” of the ASTM plan, according to architect Vishaan Chakrabarti, is the Theater at Madison Square Garden, which would be knocked down so that a five-story, brightly lit, glass-covered “train hall” could be built on Eighth Avenue.

ASTM officials said they have been working closely with Madison Square Garden officials on the plan, and have reached an agreement, in principal, to acquire the 5,600-seat theater, whose floor doubles as the low ceiling on the LIRR’s level at Penn Station, for less than $500 million. Removing the theater would not only provide additional space for Penn Station travelers, but for MSG’s truck-loading operation, which is known to tie up traffic near the Garden, according to ASTM officials. 

Other project elements include a second-floor “porch” waiting area, two elevators on every train track, additional seating near tracks, and a station ceiling design inspired by New York City’s street grid. Sidewalks outside the station also would be widened and adorned with trees.

On Tuesday, Hochul showed off artist renderings of what a new Penn Station could look like under the MTA's plan. But ASTM senior vice president Peter Cipriano said his firm, which has been working on its proposal for two years, is “way beyond conceptual artistry here.”

“We really have a good sense of the space,” he said. 

More than just designing a new Penn, ASTM wants to be chosen as the “master developer” of the station. Under the firm’s plan, it would operate and maintain the station for 50 years, collecting a fee of about $250 million annually from the railroads operating inside of it.

But the plan already faces resistance from the Metropolitan Transportation Authority, which is taking the lead in the Penn redevelopment effort, and has forwarded its own proposal for the station. It, too, has plans for a tall, skylit train hall, but would build it closer to Seventh Avenue, where MTA officials say most travelers enter and exit the station. 

But, for the MTA to build its train hall, a pedestrian bridge leading eventgoers into the Garden would have to be reconstructed. MSG officials have said that plan would disrupt the cooling system needed for the Rangers’ ice rink, and could force the NHL franchise out of the building for a full season.

Cipriano on Tuesday called it an unnecessary, invasive and a “terrible idea” that could add $1 billion to the project’s price tag. ASTM's proposal would build a smaller midblock train hall, but would not touch the pedestrian bridge or cooling system, nor significantly impact MSG's operations. "The Garden stays open. No question about it," Cipriano said.

While coming short of publicly supporting ASTM, MSG officials have said they have worked closely with the firm, and believe its proposal is far more realistic than that of the MTA.

“Recognizing that the decision on which plan goes forward is not ours to make, we look forward to collaborating with all key stakeholders on improving Penn Station," Madison Square Garden Entertainment officials said in a statement Tuesday.

MSG is currently negotiating with New York City to renew a special permit expiring next month that allows it to operate at its current site. The MTA has said the Garden is “not compatible” with Penn, and has urged the city to require MSG to turn over land to the MTA for its proposed Penn renovation. The transit agency is also looking to have MSG contribute to the cost of Penn Station improvements.

“The MTA is about passenger movement and prudent investment of public dollars. It’s not about — instead of getting Madison Square Garden to cooperate with the public facility — to bail Madison Square Garden out because of their less-than successful theater investments,” MTA chairman and CEO Janno Lieber said Tuesday.

ASTM officials on Tuesday took issue with Lieber's characterization of the potential agreement to acquire the Theater. "It's not a giveaway. It was a tough negotiation," said ASTM North America CEO Patrick Foye — a former deputy Nassau County executive and Lieber's predecessor as chairman and CEO of the MTA.

Chakrabarti called the Theater purchase an "incredibly small issue," given how it could unlock the potential of the notoriously cramped and dingy transit facility.

"It’s a fundamental question of whether you want a great station or not,” he said. “Ten years from now, do you think anybody is going to be talking about that transaction?”

Hochul has estimated that the MTA’s plan would cost between $7 billion and $8 billion to build. With a plan to fund the work through revenue from 10 new skyscrapers now scrapped, the MTA is seeking federal grant funding to pay for much of the improvements.

Cipriano called that unrealistic. Under his plan, ASTM would put up $1 billion of its own money to kick-start the project, seek $500 million in state aid, and look to federal loans for much of the balance.

Hochul has avoided publicly weighing in on the ASTM plan, other than saying it will be considered among other proposals.

"Everybody has an opportunity to show us heir vision for a brand-new Penn Station," Hochul said Monday.

Foye said he "took comfort in the governor's words," and is optimistic his firm could win the support it needs.

"I believe the decision-makers who are going to be around the table want to do the right thing for Penn Station, including those from Long Island," Foye said. "I would think serious people would want to come up with the best product."

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.