A coalition of 15 state senators has urged the Empire State Development Corporation to halt all Penn Station redevelopment plans until the agency answers basic questions about costs, design and how the work will be funded.
The group, led by Sens. Liz Krueger and Brad Hoylman sent the letter to the ESDC this week, detailing their concerns. The project — which Gov. Kathy Hochul estimated would cost $7 billion last November — would be one of the biggest redevelopments in city history, but specifics around how it will be paid for have so far been scarce.
“We agree that New York’s transportation infrastructure – and Penn Station in particular – must be updated and sufficiently funded. We also know that we have finite resources to put toward improvements and that we must use them as wisely and effectively as possible,” the letter noted. “Yet vital information about the proposed Penn Station deal has still not been provided to taxpayers and the lawmakers elected to ensure their dollars are spent wisely and their city is developed smartly.”
Krueger and Hoylman represent parts of Manhattan that will be affected by the redevelopment.
The letter follows a similar one penned by the outgoing New York City planning commissioner in January, who also wanted to know how the state was going to pay for the project.
The Empire State Development Corporation doesn’t have an answer of how exactly it will fund the project yet, or how much it might affect taxpayers. In a statement, project spokesperson Kristin Devoe said ESDC was still finalizing the details with the city.
“We appreciate the Senators' letter and are committed to continuing productive conversations with all stakeholders as we further revise and develop the plan,” Devoe wrote. “Together, we can adopt a fair framework that delivers the public benefits that New Yorkers have been denied for far too long.”
The plans call for building 10 new skyscrapers, some of which would be mixed-use — including offices, retail space, and 1,800 units of housing; 540 of which would be “affordable,” although how the state is defining "affordable" has never been publicly stated.
The project would also entail a 450-square foot concourse in Penn Station that, according to developers and the MTA, would have more light than the current station. Hochul has highlighted that eight acres of open space, as well as ample bike parking and benches, would be created as well.
The only thing that has been made public about the source of the funding is that it would likely use a structure known as PILOT — payments in lieu of taxes — in which the city isn’t taxing the owners of the real estate, but the developers would pay the state some fee directly. PILOT was used for the Hudson Yards and the Moynihan Train Hall projects; Hudson Yards’ developers received about $5.6 billion in subsidies.
Many of the issues cited in the senators’ letter relate to the developer Vornado, which owns half of the property where the 10 proposed buildings are located: Whether the company will receive subsidies; how much will it contribute to transportation and aboveground upgrades; and whether the PILOT plan is overly generous.
Several people associated with Vornado have given the maximum contribution allowed under the law to the governor’s current election campaign, called Friends for Kathy Hochul, according to Board of Election disclosure information.
They include Steven Roth, the chairman and CEO of Vornado Realty Trust, who donated $69,700; Roth’s daughter Amanda Salzhauer, who also gave $69,000 last year; and Jordan Roth, Roth’s son, who made two donations totaling $20,000 in November and this past January. David Mandelbaum, ownership partner of the Minnesota Vikings and a trustee of Vornado also donated $69,700 to Friends of Kathy Hochul, as did Russell B. Wight Jr. an independent trustee of Vornado Realty Trust.
Even opponents of the redevelopment, such as Arnold Gumowitz who owns a building on Seventh Avenue that may need to be demolished as part of the project, have donated to the governor’s election campaign. Gumowitz gave $69,700 to Friends of Kathy Hochul on January 13, 2022, while his son Gary Gumowitz gave $50,000.
“There are more questions than answers at this point, and before we proceed with one of the largest real estate projects in New York City history, we need to have greater transparency,” Sen. Hoylman told Gothamist.
Preservationists are opposed to the project, claiming that historical and architecturally significant buildings will be lost.
"The group of State Senators opposing this project is growing, which is welcome news,” Sam Turvey, chairperson of RethinkNYC and co-coordinator of the Empire Station Coalition, wrote in a statement. “The financing and missing details on so much of the plan are ripe for their critique and among the leading issues among many that justify opposing this project.”
Turvey argues the redevelopment plans should be completely withdrawn: “All need to focus on protecting as many tenants, small businesses and historic sites while this wayward bus continues its journey."
The MTA — which would benefit from Penn Station's new entrances and a more welcoming concourse — is backing the plan, despite the uncertain financing. MTA Chairman Janno Lieber, who oversaw the redevelopment of the World Trade Center after 9/11, says Midtown could benefit from more modern office space, and said he hopes the state finds a way to extract money from the developers to pay for it.
“We can capture some of that value, and use it to pay for the infrastructure, that’s in the public interest, “ Lieber said earlier this week at an unrelated press event at Penn Station. “It’s the only way we’re going to get underground concourses and new entrances to Penn — those are really important from a transit standpoint.”