UPDATED Oct. 27, 2021, 11:55 a.m.: For nearly two years, the fate of Penn Station has been linked to the construction of 10 nearby commercial towers. That coupling may be coming undone.
During his 2020 State of the State address, then-Gov. Andrew Cuomo announced that revenue generated from acquiring and redeveloping properties surrounding the station would help pay for eight new tracks a block south of the transit hub. The General Project Plan mentions payments in lieu of taxes and other mechanisms to fund the initiative.
But Cuomo’s resignation imperiled the project’s future, and transportation officials are uncertain as to whether the construction of 10 new towers will cover its costs.
During a recent Senate committee hearing, Manhattan Sen. Brad Hoylman asked MTA chair Janno Lieber if the towers were necessary to pay for the expansion of Penn, as well as to leverage federal funding for the Gateway Program bridge and tunnel expansion and the broader redevelopment of the station. Lieber was noncommittal.
“Right now, obviously, the value of commercial real estate development rights is seriously suppressed,” Lieber said. “I think whatever one hopes and expects, right now, that value is not what it once was.”
Lieber said he is instead focused on overhauling the existing Penn Station, noting that even if the Gateway Program and the track expansion are completed, New Yorkers will still be stuck in an outdated transit center.
In a statement Tuesday, Lieber said the MTA has “complete confidence that there will ultimately be a robust market for commercial real estate near Penn Station.”
“The MTA’s immediate focus is to develop a strategy with our colleagues at Amtrak and NJ Transit to jointly fund improvements to existing Penn Station, which is owned by Amtrak, and to prepare for that future demand,” he said. “All our customers deserve a world class transit facility similar to the flagship Amtrak station at Moynihan Train Hall.”
Gov. Kathy Hochul has said she is committed to improving Penn Station, but has not has not indicated whether she will stick with Cuomo’s plan. Empire State Development officials have previously said that they are considering including affordable housing units on three of the eight sites surrounding the station.
“As New York’s economy recovers and the local real estate market continues to rebound, the transit-oriented development envisioned by ESD’s Empire Station Complex proposal will generate the needed revenue to fund the renovation and expansion of Penn Station, implement other public transportation and public realm improvements in the area, and spur a revitalization of the business district surrounding the station,” a spokesperson for Empire State Development said in a statement Tuesday night.
Updated with a statement from Empire State Development.