Could Penn Station Plans Go Off the Rails?

(URBAN MATTERS) February 14, 2022

Andrew Cuomo may have left center stage, but the former governor’s colossal Empire Station Complex (now less grandly renamed the “Penn Station General Project Plan”) definitely hasn’t. Freely wielding State eminent domain powers while sidelining the City’s own land use review process, it proposes to expand and rebuild the nation’s busiest transit hub with revenues generated by surrounding it with new private development that would rival what has been built or planned in nearby Hudson Yards. 

Will this be a welcome shot in the arm for our economy and spirits – an opportunity to be bold and build big? Or does it rest on dubious financing that might ultimately leave taxpayers holding the bag? We asked Rachael Fauss, who’s birddogging this issue for the nonprofit group Reinvent Albany, to break it down for us. 

 Urban Matters: Before we get into the merits of the plan, give us an idea of its goals and scope. 

Rachael Fauss: The Penn Station GPP has the stated goals of addressing so-called “substandard and insanitary conditions” at Penn Station and the surrounding area, and providing “essential revenue” for the station’s renovation and potential expansion. It would allow construction of up to 10 towers by the current developer in the area, Vornado Realty Trust, and capture a portion of taxes that would have otherwise gone to the City through “payments in lieu of taxes,” or “PILOTs,” to fund upgrades at Penn Station. These PILOTs would be bonded against to raise a portion of the revenues needed for the project. The State could use eminent domain to seize any property not currently owned by Vornado. 

UM: What’s the current status of this project? Governor Kathy Hochul is on board with it; does that make it a done deal? 

Fauss: Governor Hochul announced revisions to the plan in November addressing some local opposition: scaling back the size of the potential towers and adding affordable housing and a “public realm fund” to improve the streetscape. But many of the project’s controversial elements didn’t change, including: allowing a massive redevelopment to occur outside of the City’s land use process, and the potential siphoning off of City tax revenue to pay for the Penn Station improvements.  

Empire State Development, the State authority managing the project, held a final hearing on the GPP last month, and public comment is open through Feb 22nd. The ESD board, appointed by the governor, will consider public comments and any staff revisions and could vote on a final plan as early as this spring. After that, it must be approved by the Public Authorities Control Board, which is appointed by the Governor and Legislature. This is the same board that helped kill Governor Cuomo’s Amazon headquarters proposal. Any PILOTs would need to be agreed to by the City. 

Source: Urban Matters