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Penn Station: “A Massive Real Estate Play in Search of a Transit Project”

The City’s Independent Budget Office (IBO) joined a long and growing list of people and organizations who question the State’s “plan” for Penn Station. The IBO warned that taxpayers might wind up footing the bill.

Commuters in Penn Station (Bloomberg)

As The New York Times reported yesterday, the IBO said there are serious questions about the financial viability of the plan. They add there are so few financial details, that the plan is all but impossible to analyze. The State is counting on recouping upfront costs to “improve” Penn from revenue generated by 10 giant, mainly office, towers on eight, block-size, development sites around the station. The IBO said that without more data on projected costs and revenues it is impossible to know whether revenues will cover the debt service. They also criticized the lack of a backup plan if revenue does fall short.

Read the full IBO report.

Our main objection is the State’s desire to level the blocks around the station for development larger than Hudson Yards. IBO noted that 80% of the buildings on these blocks were built in the 1930s or before and that several are eligible for listing on the National Register of Historic Places. Businesses currently on the development sites employ 8,300 persons. We also object to bypassing the normal City development process which provides ample opportunity for public input. The State Economic Development Corporation (EDC) held one, bi-furcated public hearing last year and ended public testimony in January.

Read our testimony

You probably saw the Times story. But you may have missed an opinion piece in Crain’s New York Business by former Port Authority Executive Director Chris Ward. He summed up the plan this way: “Though the existing Penn Station is universally reviled, the new redevelopment vision really is a massive real estate play in search of a transit program.” Ward asked: What are the real transit priorities? Do we even need this amount of density to even fund the project? And, finally, is this the City we will want to live in?

Ward was also concerned that plans for Penn Station, and the nearby Bus Terminal will “define the future of Manhattan and region” without any coordination.

EDC could approve the Penn Station plan, without answering the myriad questions it raises, within the next couple of months. The State can do itself a favor…and the public a service…by taking a pause and answering these serious concerns.

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