NYS Still Says Office Towers Could Rise Around the Penn Rail Hub in Future

The state’s plan to build supertall office towers around Penn Station is still alive despite the office market crash, and some of the revenue from these new buildings could be skimmed to help pay for an expansion of the station that Amtrak is arguing for, a lawyer for the state said in court.

The lawyer, Philip E. Karmel, insisted that this position was not in contradiction to governor Kathy Hochul’s announcement last year that she was “decoupling” the improvement of Penn Station from the redevelopment of the surrounding neighborhood, an urban renewal effort known as The General Project Plan.

Karmel’s statements before the Appellate division in Manhattan highlight the exceptional complexity of the multiple, interlocking proposals and arguments about the future of Penn Station and its neighborhood.

Former Governor Andrew Cuomo had developed the GPP in collaboration with the neighborhood’s largest property owner, Vornado Realty Trust, and promised that some of the revenue could be used to improve Penn Station, the largest and arguably worst rail hub in North America.

But when the real estate market crashed Vornado began slow walking the redevelopment, prompting neighborhood residents to move in court to quash the plan altogether.

“The original purpose of the GPP was destroyed by covid,” the neighborhood’s lawyer, Richard Emery, told the court. “They can’t run away from that. In fact, the governor has dealt with that by decoupling.”

But Karmel argued in court that the governor’s statement only applied to the urgent need to reconstruct the station’s train hall and waiting areas, a circle of hell for many commuters, and not to the separate plans by Amtrak and the commuter railroads to double the capacity of the station in the 2030’s.

“The governor’s statement only pertained to the Penn station reconstruction project,” Said Karmel. “It had nothing to do with the Penn station expansion project, which is still expected to cost something like $13 billion.”

Plans for the reconstruction of the station are being overseen by the MTA, whose Long Island Rail Road is the largest user, while expansion is under the direction of Amtrak, which owns the station.

Karmel said that “if there are excess moneys generated by” the office development envisioned in the GPP “they can go to the Penn Station expansion project that was not even addressed in the governor’s statement.”

Hochul made her decoupling statement in June of last year, saying she would no longer tolerate delay in improving the commuter experience.

“[W]e are decoupling this from the prior plan, the GPP,” she said then. “That does not mean that we’re not going to be building office space here at some point. It makes sense. We have 600,000 people that come through here, it makes sense for them to be able to work in the same place where they commute to. So, we’ll get that done over time, but I no longer want that to be a delay, a delay to this process, which is moving forward today.”

While that statement could be interpreted as decoupling everything, a press release issued at the time said: “Penn Reconstruction is both separate and distinct from the future Penn Station Expansion.”

Both Karmel and a lawyer for Vornado argued in court that even with the post-covid decline in the New York real estate market there was still a robust market for luxury office property of the sort envisioned in the GPP.

“The market for office space in New York City is stratified,” Karmel explained to the court. “With robust demand for office space in new office buildings in transit accessible locations that are built to a top tier, class A standard, and that have green sustainability features. And that is exactly the kind of office space that would be included in this project.”

Indeed, Vornado recently tore down the venerable Pennsylvania Hotel, immediately across Seventh Avenue from Penn Station, leaving a large vacant lot where it still says it hopes to build a 100-story office tower.

The GPP envisions as many as ten such towers, although Hochul has said she is open to incorporating more housing.

Independent of the GPP, Amtrak is pressing its view that the railroads need to double Penn Stations capacity to handle trains from New Jersey by the 2030s. That is when the Gateway Project will complete a new rail tunnel under the Hudson River, the first in more than 100 years, increasing the capacity from New Jersey to New York from two tracks to four, or from 24 trains to 48 at peak times.

But the current station doesn’t currently have the capacity for so many trains.

This has triggered a fierce argument between the railroads and several advocacy groups over how to expand that capacity.

Several advocates say that capacity can be increased within the current footprint of the station by overhauling how the railroads operate, running many more trains through the station rather than ending their runs in the station. But Amtrak says this won’t work.

“Through running wouldn’t meet our goal of adding an additional 24 trains per hour,” Petra Messick, Amtrak’s chief planner for Gateway, told a community forum sponsored by The City Club.

She said the railroads were looking at ideas to expand the station both to the south and to the north, an idea that was studied and abandoned when then Gov. Chris Christie of New Jersey killed an earlier plan for a new tunnel under the Hudson.

The plan of expanding to the south would involve demolishing the block between 7th and 8th avenues and 30th and 31st streets, often described by its tax lot, Block 780. The block includes an historic Roman Catholic Church, several stores and bars an apartment building and a parking garage.

At the City Club forum, Professor Robert Paaswell of City College, a transit expert, said that for all the scale and cost of the railroads’ plans they were in a way not ambitious enough. What New York should be hoping for, he said, was thoroughly digital and integrated rail services connecting the region as well as other cities

“Through running should be one attribute of modernization of the station,” said Paaswell, who ran the Chicago Transit Authority.

Paaswell noted that he had served on a panel of experts that the Port Authority had convened to reconcile community interests and the needs to improve service and commuter experiences at the long-reviled Bus Terminal ten blocks north of Penn Station.

“Why aren’t we doing that for this,” he asked.

Others agreed that the reimagining of the railroad station was too important to be left just to the railroads.

“This is fundamentally a governance problem,” said Liam Blank, a transit consultant and chair of the City Club’s transportation committee. “There is no one in charge to force this to happen. It’s relying on the goodwill of the railroads to look beyond their individual interests and political constituencies to do something for the benefit of the region.”

Rachel Fauss, Senior Policy Advisor at Reinvent Albany, a good government advocate, echoed the point. “From a governance perspective,” She said, “you can’t get much more complicated than: New Jersey Transit; Amtrak; MTA; New York City; New York State; MSG; Vornado. You can add however many acronyms you want to that. This is all very complicated.”

MSG, of course, stands for Madison Square Garden, which has sat atop Penn Station since the station’s builder, The Pennsylvania Railroad, sold and demolished the much loved above ground train hall to raise revenue as rail travelers fled to cars and planes in the early 1960s.

For her part, Messick told the forum the railroads were trying to focus on the most immediate needs.

“The New Jersey commuter market has grown over 500 percent since the mid 90s,” she told the forum. “Amtrak just finished its best ridership year ever in its history, with 33 million passengers. We are trying to provide rail service where the riders are. We believe we have a good understanding of it. That’s the reason to address the trans-Hudson capacity deficiency first. Get people out of their cars. Give them the service they want to ride. As opposed to a theoretical potential market of city pairs throughout the region to be connected through through-running.”

She said such added regional metro rail service was a possibility in the future.