Penn Station Redevelopment Will Happen With Or Without Vornado, Hochul Says

Vornado Realty Trust may have called timeout on the massive redevelopment around Penn Station, but Gov. Kathy Hochul has now said the transit hub’s transformation will go ahead — with or without the developer.

“I’m committed to getting that done,” Hochul said on WNYC’s All Things Considered yesterday, adding that the plan is “not contingent on what Vornado was planning in the entire neighborhood.”

The state’s planned redevelopment of the transit hub was set to bring 10 mixed-use towers to the blocks surrounding the station, with Vornado — which owns five of the development sites — leading the process.

But the developer put its involvement in the project on hold last month, with CEO Steven Roth citing the interest rate environment and calling new construction “almost impossible” during an earnings call.  

The plan was set to develop 18M SF around the station, bringing almost 1,200 apartment units to the site, with the state receiving an estimated $3.75B in payment in lieu of taxes from Vornado. Buildings would also remain off New York City’s tax rolls for 80 years, or until the agreed-upon contributions were met, per the financing deal unveiled by Hochul and Mayor Eric Adams last summer.

But even as the state and city governments finalized arrangements to facilitate the redevelopment, the controversy surrounding it intensified. In the months before Hochul and Adams’ announcement, NYC’s Independent Budget Office found a $20B gap in how the debt financing for the project would be structured.

Last fall, the redevelopment started to face vocal opposition from local groups including ReThink NYC, the Penn Community Defense Fund, the City Club of New York and residents of 251 West 30th St. In October, the groups filed suit together against the redevelopment, alleging that the state did Vornado’s bidding when drawing up its plans and skirted environmental regulations, The Real Deal reported at the time. A separate suit, filed by the same lawyers a month earlier, alleged that the state was “zealous in concealing the central role played by Vornado Realty Trust.”

But Hochul appears to be standing firm on the controversial redevelopment.

 “My plan is simply to give New York commuters an experience that is not equated to a living hell, OK?” Hochul said during the radio broadcast, according to TRD.