New York Construction Report staff writer
The Empire State Development Board has approved a plan to transform Penn Station and redevelop the surrounding area with 10 towers, commercial and residential space.
The plan will provide an estimated $1.2 billion in tax breaks to developers.
A financial framework between New York State and New York City was announced as well. The framework ensures funding for the station, open space and public realm will be provided in part by private development. It also affirms the State’s ongoing commitment to rebuilding Penn Station without raising taxes or transit fares.
“The current Penn Station is unsightly, inefficient, and impossible to navigate, and New York commuters deserve better,” Governor Kathy Hochul said.
“This agreement brings us one step closer to a beautiful, modern station worthy of New York with vibrant open space, lively streetscapes, and better, more seamless connections to local transit.”
In June, Gov. Hochul announced that the Penn Station Reconstruction project had entered the design phase and launched a request for proposals for the design of the new Penn Station. Submissions are due later this month; awards are expected to be announced in the fall.
“Penn Station is one of the nation’s major transportation hubs, hosting millions of commuters every year, and yet it has not kept pace with the 21st century,” said Lieutenant Governor Delgado. “To ensure that we can continue to meet the needs of the commuters of today and tomorrow, the city and state are joining together to agree on a financial framework that provides economic viability and works for all New Yorkers.”
Work will include enhancements to the streets and sidewalks, the creation of new public spaces in the area around the station, and the construction of more seamless transit connections between Penn and nearby subway stations.
The State will sell development rights to private developers and collect payments-in-lieu-of-taxes (or PILOTs) on newly constructed, modern, and environmentally friendly office and residential buildings. The amount of PILOT payments collected in excess of existing property taxes, in addition to revenues from the sale of additional development rights, will help to fund the project.The State and the City have agreed that PILOTs can be used to pay for up to:
- 100 percent of improvements to streets, sidewalks, public spaces and other elements of the public realm;
- 50 percent of improvements to transit infrastructure including underground concourses and subway entrances in the neighborhood; and
- 12.5 percent of the cost of the reconstruction and potential expansion of Penn Station
Remaining costs would be funded through a combination of sources from the federal government, New Jersey, New York State, Amtrak and other public funding sources.