The Real Deal New York

Cuomo jettisons Vornado, Related from Penn Station redevelopment — for now

Stephen Ross' firm has indicated that it will bid on the latest plan

January 06, 2016 05:28PM
By Kathryn Brenzel

Rendering of

Rendering of proposed train hall (inset: Gov. Andrew Cuomo)

Gov. Andrew Cuomo hit the restart button on the long-delayed Moynihan Station project on Wednesday, meaning that Related Companies and Vornado Realty Trust are — at least for now — out of the job.

Cuomo notably didn’t mention the two developers during his speech at Madison Square Garden on Wednesday, instead focusing on the need to act immediately to combat increasing traffic at Penn Station. Empire State Development, Amtrak and the MTA will issue a request for proposals this week for the new project — dubbed “Empire State Station” — that seeks to redevelop Penn Station and the Farley Post Office across the street. Moynihan Station, a planned new transit hall in the post office, would connect to Penn Station through a network of underground tunnels.

The private developer(s) selected for the project will pay for the redevelopment of Penn Station, in exchange for retail development rights, Cuomo said. Developers can propose to tackle both the redevelopment of Penn Station and Moynihan Station, or can submit proposals for the projects individually. According to Cuomo, it would cost $2 billion to redevelop the post office and Penn Station, with another $1 billion in costs slated for “ancillary retail and commercial developments.” The governor expects the both the redevelopment of Penn and Moynihan stations to be completed over the next three years.

A representative for Related said that the developer expects to submit a proposal for the project but would not elaborate on which option the company might choose.

“We applaud the governor’s focus on the revitalization of Penn Station and Moynihan Station,” a spokesperson for Related said in a statement. “The redevelopment will transform the nation’s busiest train station into a modern commuter hub and a gateway befitting the greatest city in the world. We continue to passionately believe in the project and look forward to reviewing the materials.”

Vornado didn’t immediately respond to requests for comment.

The governor offered up a few options for redeveloping Penn Station, one which includes removing Madison Square Garden’s Paramount Theater to construct an Eighth Avenue entrance, which would open up to a new concourse, as well as retail and commercial space. Another option calls for closing 33rd Street to create a new, more open entrance or a new grand entrance at Seventh Avenue. Another plan would create new entrances at the corner and the middle of the station. The central idea is to “open up” the station and bring in more natural light.

“Frankly, it’s a miserable experience,” Cuomo said of Penn Station. “It’s a terrible impression of New York.”

News that Vornado and Related — who have been working on Moynihan Station for more than a decade — may get the boot from the project surfaced last month. The New York Times reported that the state would need to reimburse the developers $30 million in expenses if a new plan was put forward. State officials on Wednesday said that because the developers are able to re-submit proposals, the state isn’t on the hook for the penalties.

The project has been more than two decades in the making. The late U.S. Sen. Daniel Moynihan suggested in the late 1990s that the Farley Post Office be converted into a train hall for Amtrak. In 2005, Related and Vornado won an RFP to develop the Moynihan Station project, which included the post office and one million square feet of air rights to be transferred across the street.

An early version of the plan called for moving Madison Square Garden to the post office, which would have allowed for a new commuter station for the Long Island Rail Road and New Jersey Transit on the east side of Eight Avenue, along with 5.5 million square feet of commercial space. But in 2008, Madison Square Garden’s owners decided against relocating, and the developers had to switch gears. The new three-phase project included creating entrances at the post office to the tracks below and developing the station’s main hall and western annex. Work that was part of the first phase, construction of the lower concourse and underground connections to the subway and Penn Station, is still expected to be completed in fall 2016.

State officials, as well as transportation and construction unions attended Wednesday’s announcement in support of the governor’s plan. Amtrak CEO Joseph Boardman said the project marked the start of a “rail renaissance” in New York City. And it couldn’t come at a more crucial time: Officials estimate that traffic coming into Penn Station will double over the next 15 to 20 years. Currently, roughly 650,000 people visit the station every day.

“Governor Cuomo’s plan will right the wrong of Penn Station by restoring it to its former glory as a grand entrance worthy of the Empire State,” Denise Richardson, executive director of the general contractors association, said in a statement. “This project has undergone fits and starts for decades.  We cannot afford to wait any longer.  The redevelopment must move forward at lightning speed.”

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