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Penn Station expansion moving forward with $1.3B in new state budget

Gov. Andrew M. Cuomo's proposed annex, bordered by

Gov. Andrew M. Cuomo's proposed annex, bordered by Seventh and Eighth avenues and 30th and 31st streets, would be part of a new Empire Station Complex. Credit: Charles Eckert

A $1.3 billion cash infusion in the new state budget will kick-start a massive renovation and expansion of Penn Station, despite growing concerns over plans to knock down and replace several buildings around the LIRR’s Manhattan hub.

The budget agreement reached earlier this week between Gov. Andrew M. Cuomo and the State Legislature includes the first wave of funding for the development of the new Empire Station Complex, which aims to rebuild the existing Penn Station and expand it by razing the block south of the facility. The facility will add up to nine new tracks underneath it.

"The fully renovated Penn Station … will comprise a widened and completely reconstructed 33rd Street LIRR concourse and an expanded and completely transformed station," Cuomo’s office said in a statement earlier this week.

The broader development plan, proposed by Cuomo in January 2020, aims to erect 10 new skyscrapers around the station — the tallest reaching up to 1,300 feet — that would be used for office and retail space, hotels, and potentially apartments. Revenue generated by the new buildings — including potential payments in lieu of taxes and air development rights — would be used to help finance transportation infrastructure improvements underground.

But developing the properties above the ground means acquiring 38 private properties, displacing hundreds of residents and businesses, and demolishing several existing structures — including some historical ones. That has prompted opposition from community leaders who suspect the proposed transportation improvements are being used to justify an oversized and intrusive real estate deal.

"The premise of the development is inherently flawed, because of the enormity of it and the fact that they’re using this very heavy-handed approach for such a densely packed neighborhood," said State Sen. Brad Hoylman (D-Manhattan), who represents the project site’s surrounding community and has opposed the plan. "It puts elected officials and local representatives in an impossible position, to be honest. How on earth could we ever endorse such a process?"

As a minor compromise between Cuomo and lawmakers, the final language in the budget bill specifies that the earmarked $1.3 billion must be used for the expansion of Penn and related transportation improvements "and not for above-grade development contemplated in the general project plan."

Project officials said the money was always intended to go toward the Penn Station work, including by funding early engineering and design work. But, they said, it also could be used to buy the properties underneath, where the new tracks would be built.

While project officials already have published extensive plans for the street-level real estate development, few details exist about the subterranean transit improvements. Officials with the Metropolitan Transportation Authority, which will lead the Penn Station reconstruction and expansion effort, said those details will come as part of a separate environmental review process that could begin later this year.

"We think the priority should be transportation first, and there should be sufficient input from the community," said Liam Blank, spokesman for the Tri-State Transportation Campaign, a Manhattan-based transit advocacy group. "It shouldn’t be the other way around, where we’re starting with real estate development and then, potentially, getting transportation improvements later."

Some opponents have raised concerns with the effort being advanced by the state as a "general project plan," thereby sidestepping oversight by the New York City Council, local planning and zoning bodies, and community boards. Project officials said the model is the same one used for other successful state-led development projects, like the redevelopment of the World Trade Center, and should greatly reduce the timeline for improvements.

The renovated and expanded Penn Station is projected for completion by 2028, ahead of the completion of Amtrak's proposed new "Gateway" rail tunnel across the Hudson River. The aboveground property developments could take until 2038 to complete.

Although the new tracks are expected to primarily serve NJ Transit, Philip Eng, president of the LIRR, which operates most of the trains at Penn, said "great benefits" are in store for Long Island commuters.

"The ability for other transit agencies to have more capacity at Penn Station actually frees up space for us," Eng said. "That extra capacity will go a great way to giving the Long Island Rail Road and our riders more room, more flexibility to make sure that service can continue."

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