Empire State Development Approves Penn Station Redevelopment

The saga surrounding the redevelopment of Pennsylvania Station and its outskirts got a little headway yesterday when New York’s economic development agency, Empire State Development (ESD), voted unanimously in favor of the Midtown Manhattan megaproject. In its current iteration — a scaled-down version late last year when Governor Kathy Hochul took office — the still-ambitious project will include up to 18 million square feet, with eight plots slated for redevelopment.

According to the approved plan, most of the new construction in the so-called Empire Station Complex will be dedicated to commercial space, including offices and retail, spread over 10 skyscrapers to form an office-centric district in tied with nearby Hudson Yards. The plan also includes 1,800 housing units, a hotel and a long-awaited renovation of Penn Station, recently dubbed a “hell” by Hochul.

For decades, the project has been the subject of protests over redevelopment — and overdevelopment — that disrupts the history and fabric of the area. It all started in 1963 when the original Pennsylvania station was demolished to build the rounded Madison Square Garden entertainment complex.

(Courtesy of Governor Kathy Hochul’s Office)

The Penn Station reconstruction project will include aesthetic upgrades, reconfiguration of the train hall serving NJ Transit and Long Island Rail Road, subway improvements and construction of a rail tunnel under the Hudson River, all estimated at $7 billion, with the surrounding redevelopment proposal raising the cost by another $13 billion. The proposed design would connect to the Moynihan Train Hall, which opened in 2021.

Further improvements to the immediate environment, supposedly with its completion, would drive up the bill by another $2 billion.

With ESD approval, an application can now be made for federal funding to help defray project development costs. However, who will distribute the money for the megaproject is still unconfirmed. Hochul reported to the the wall street journal that financial details and terms regarding the project will not be released until “negotiations” have taken place with the federal government and developers. ESD has not issued a request for proposals (RFP) for the larger design scheme; last month, the state officially issued a tender seeking architectural and engineering firms to perform the described design work at Penn Station.

The plan includes offering $1.2 billion in tax breaks to project developers. Currently, property development giant Vornado Realty Trust owns five of the properties tagged for redevelopment, including Hotel Pennsylvania, a 1919 design by McKim, Meade & White, located across from the train station. Despite strong preservation efforts to save the building, demolition work on the historic former home began earlier this year to make way for the PENN15 office tower designed by Vornado Foster + Partners.

aerial rendering of a pedestrian plaza in manhattan
(Courtesy of Governor Kathy Hochul’s Office)

Before checks can be written and signed, the proposal must be approved by the Public Authority Control Board, a state agency responsible for reviewing and granting financial and construction approval to requests from public authorities for the state. The proposal is on the agenda for consideration and vote at the next board meeting on July 27.

In a similar vein, New York State Senate Bill 6556, introduced in June 2021, also weighs on the future of the project. The bill calls for the Empire Station Complex and Empire Penn Expansion to be subject to the city’s Uniform Land Use Review Procedure (ULURP), just like other large-scale capital projects , currently the proposed redevelopment is exempt from ULURP review. Senate legislation is still in committee, after being discussed in the hall, it must also pass through the Senate and the Assembly before final approval (or disapproval) by the Governor. With this formal review, the proposal would be brought to the attention of City Council, which would hold public hearings to gather feedback from community stakeholders regarding the impacts, both beneficial and adverse, if the project were fully implemented.

While yesterday’s approval looks like a victory, the project still has a long way to go before the ground is broken and gleaming glass towers are built.