The NJ Transit board of directors say the extra room is needed to accommodate its growing ridership. Under the agreement, NJ Transit will exercise operational control of the new station and integrate the new facilities with its existing operations across the street in Penn Station.

In July, the team of the Related Cos. and Vornado Realty Trust was selected to redevelop the Farley Post Office. Dubbed the Moynihan Station, the $818-million project involves 300,000 sf of space for the train station, 850,000 sf for commercial space--including as much as 100,000 sf of retail--and up to one million sf of air rights for residential housing across the street.

The Post Office will continue to occupy 250,000 sf in the Eighth Avenue landmark, whose facade will remain. The architect for the project is James Carpenter Design Associates in collaboration with Hellmuth, Obata + Kassabaum. The project also is expected to generate more than $50 million in annual tax revenue.