Hochul "Decouples" Penn Station Rebuild from Vornado Office Plan

Declaring that NYC can no longer tolerate any delay in upgrading a “congested, unpleasant” Penn Station—the denizens of the Big Apple usually call it a rat warren—Gov. Kathy Hochul this week officially “decoupled” the $20B train station redo from Vornado’s plans to build 18M SF of new office towers in the Penn District.

Hochul said the state will no longer wait for Vornado Realty Trust to lift its pause on any construction this year on 18M SF in new office and commercial space that was supposed to contribute at least half of the funding for the long-awaited upgrade of NYC’s busiest transit hub.

Instead, Hochul announced that the state will turn to alternative funding—including grants from the federal and state governments—for rebuilding the train station at Madison Square Garden, which Empire State Development, the state’s economic development agency, has estimated will cost up to $20B.

“This has been a project that has had a few setbacks,” Hochul said, at a news conference. “We are no longer tolerating the delay. [Penn Station is] crowded, congested. It’s unpleasant. We are decoupling this from the prior [plan]. It doesn’t mean we aren’t going to build office space at some point. While demand for office space is down right now, we believe this will be temporary.”

Earlier this year, Hochul’s plan to move forward with a scaled-down version of the Penn District redevelopment including the train station redo—yes, 18M SF of new towers actually was a significant reduction in the original plan—hit a major hurdle, when Vornado CEO Steven Roth disclosed in an earnings call that the REIT had decided to pause all new construction in the Penn District this year.

Roth said the prospect of new office tower construction in the city for the foreseeable future is “almost impossible” due to tight lending conditions. Vornado, which recently completed an upgrade of its Penn 1 tower, said it will complete a renovation of the Penn 2 tower above MSG.

In announcing the pause, Roth—who had been a leading proponent of the return-to-office push—acknowledged that he believes hybrid work is here to stay, with Fridays a “holiday forever” and Mondays “touch and go.”

The state will begin taking bids this year for the Penn Station rebuild, with the leading contender a plan to wrap Madison Square Garden with a new glass-encased entrance hall for the train station, which served an estimated 600,000 passengers daily at pre-pandemic levels.

The front-runner is a revival of a plan the predates the office tower cluster scheme: a proposal from Italy-based ASTM Group that would wrap a 90-foot-tall rectangular glass entrance to Penn Station around the Reese’s peanut butter cup-shaped oval of Madison Square Garden.

According to the proposal, an aluminum and steel structure with glass facades and a glass roof will create two new light-filled train halls at Penn Station in a project that would be completed by the end of this decade.

Based on a rendering, upon the project’s completion MSG will resemble a gold poker chip sitting on a sparkling glass podium. The Theater at MSG, a 5,600-person venue attached to the Garden on the Eighth Avenue side, would be demolished to make way for the new train station entrance.

The glass entrance to Penn Station would be designed to synch up architecturally to the new Moynihan Train Hall, a $1.6B renovation of the century-old, Beaux Arts-style James A. Farley Post Office Building, nearing completion on the west side of Eighth Avenue across the street from MSG.

Moynihan Train Hall—named for the late Sen. Daniel Patrick Moynihan, who championed the project—is an airy, 90-foot-tall atrium with a glass ceiling, two levels of shops and a 225K SF ticketing hub for Amtrak and the Long Island Railroad.

One of the biggest architectural blunders in NYC’s history was the decision to tear down Penn Station and build the fourth iteration of Madison Square Garden on top of the confluence of rail lines in the late 1960s.

The removal of the Victorian railway palace literally and figuratively turned Manhattan’s largest transportation hub—the place where hundreds of thousands of people get their first glimpse of the Big Apple—into a confusing and cramped underground—okay, we’ll say it again—rat warren.

After they knocked down the original Penn Station in 1967, former First Lady Jacqueline Kennedy Onassis led a successful campaign to save Grand Central Station, the beginning of a citywide effort to preserve historic buildings.