The Real Deal New York

Comeback kids: Related, Vornado win bid for Moynihan Train Hall redevelopment project

Redevelopment expected to cost $1.6B

September 27, 2016 01:48PM
By Kathryn Brenzel

Rendering of the Farley Post Office (inset: Stephen Ross and Steven Roth)

Rendering of the Farley Post Office (inset: Stephen Ross and Steven Roth)

After the state kicked them off the Moynihan Train Hall project earlier this year, the Related Companies and Vornado Realty Trust are back.

Gov. Andrew Cuomo announced Tuesday that Related, Vornado and Skanska won the bid for the redevelopment of the James A. Farley Post Office, which will be known as Moynihan Train Hall and feature 700,000 square feet of office and retail space and train halls for both Amtrak and the Long Island Rail Road.

The decision doesn’t come as much of a surprise, since Vornado and Related arguably had a leg up on the competition, having been involved in the project for more than a decade. They were tapped in 2005 to develop the station and were only jettisoned from the project earlier this year.  The design-build team has agreed to a fixed schedule and budget for the project, which is expected to be completed in 2020 and cost roughly $1.6 billion — $600 million from the developers, $570 million from Empire State Development (ESD) and $425 million from Amtrak, LIRR, the Port Authority of New York and New Jersey and other federal sources. The redeveloped Farley building will feature 112,000 square feet of retail space, 588,000 square feet of office and a 255,000-square-foot train hall.

“We have assembled a terrific team for this project and stand ready to help the governor realize his vision for a grand new regional rail hub that is as vibrant as the people and the state it serves,” Jeff Blau, CEO of Related, said in a statement on behalf of the team. Representative for Skanska and Vornado did not return requests seeking comment.

The announcement, however, did come with a few surprises: one that AMTRAK and LIRR will share space in the Farley Post Office, rather than just house a train hall for the former. The second was that the design-build team will not be tackling a redesign of Penn Station. That portion of the project will be handled by a separate request for proposals. The MTA is planning to rebuild the current LIRR concourse in Penn Station — what Cuomo on Tuesday referred to as catacombs — and two subway stations. The agency will release an RFP for that work on Tuesday.

ESD and Amtrak, meanwhile, will issue a separate RFP to redevelop the current Amtrak space in Penn Station. The new LIRR concourse at 33rd Street will be widened to three-times its current 25 feet, have higher ceilings and feature LED video screens on the ceiling that will project blue skies — a far cry from the hellish metaphor that the governor is fond of using when it comes to the station but not quite as illustrious as a previous design option that would have brought natural light down to the “catacombs.” The LIRR improvements are expected to cost $170 million, while upgrading two subway stations at Seventh and Eighth avenues has a projected $50 million price tag, Cuomo said. It’s unclear how much redeveloping Amtrak’s current space in Penn will cost since those plans are still up in the air.

Rendering of renovated LIRR concourse

Rendering of renovated LIRR concourse

The joint RFPs issued in January gave bidders the option to either redevelop both Penn Station and Moynihan, or tackle the projects individually. The RFPs offered five different design options for the redevelopment of Penn Station, one of which included removing Madison Square Garden’s Paramount Theater to create a grand entrance at Eighth Avenue. Another option called for creating an entrance at Seventh Avenue, while another — the option that is moving forward — involved renovating the interior of Penn Station without major exterior changes.

In response to a question at an Association for Better New York event on Tuesday, Cuomo indicated that there are no plans to relocate Madison Square Garden, though its operating permit at its current space expires in seven years. Cuomo said the state has the option down the road to buy part of the stadium to expand Penn Station, but MSG likes its current location.

The first phase of construction at Farley is nearing completion, Cuomo said. That portion of the project, which involved Skanska, included building a concourse west of Eighth Avenue that creates an underground connection between Farley and Penn Station.

The governor referred to the two projects as Penn-Farley Complex, rather than the Empire Station Complex moniker he revealed in January. It’s not clear if that name has been abandoned. Cuomo also delivered a message to critics of his plans to invest $100 billion into the state’s infrastructure over the next five years.

“This isn’t a plan. I don’t announce plans with caveats. This is what is going to happen,” Cuomo said. “We’re so accustomed to projects that get announced but don’t materialize. You don’t think we can do it? Look at the Tappan Zee Bridge. We are doing it.”

Correction: An earlier version of this story misidentified the square footage of the proposed train hall. It’s 255,000 square feet.