When Vornado and Related remake the eastern portion of the Farley building, the developers will have the rights to lease out about 850,000 sq. ft.
(Bloomberg)—In a few years, as many as 150,000 commuters using the new Moynihan Station will be bathed in natural light under vaulted steel-trussed ceilings spanned by glass. They’ll be able to dine at new restaurants in the grand train hall, all part of a partnership between the state and two prominent developers.
But for more than twice as many riders at New York’s Pennsylvania Station across Eighth Avenue, it’ll be a different story. Those travelers are doomed to keep arriving in the city, as historian Vincent Scully once said, scuttling in like rats through the underground maze.
The plan under way to ease overcrowding at the Western Hemisphere’s busiest transit hub falls short of the late Senator Daniel “Pat” Moynihan’s original dream to devote the entire James A. Farley Post Office Building to a new transit hub that would replace Penn Station. It also misses the cherished goal of urban planners for a world-class landmark at the site of the original Beaux-Arts gem that was demolished in the mid-1960s.
Instead, it’s an example of the sort of compromise that results from public-private partnerships, where community interests compete with profit motives.
“At the end of the day, there have to be revenue streams,” said Tom Wright, president of New York’s Regional Plan Association and a member of a state panel examining the future of Penn Station. “By transferring some of the risk to the private sector, these projects really have a much better track record of getting done on time and budget.”
Adding Offices
When Vornado Realty Trust and Related Cos., working with construction company Skanska AB, remake the eastern portion of the 1.4 million-square-foot (130,000-square-meter) Farley building for Amtrak and Long Island Rail Road passengers, the developers will have the rights to lease out about 850,000 square feet, most of it to office tenants, on the western side. They’ll be investing $630 million in the $1.6 billion project, set to be finished in late 2020.
Those offices preclude a proposal to have Madison Square Garden, currently atop Penn Station, relocated to the west side of Farley.
New York Governor Andrew Cuomo, who has championed a revamping of the transit hub as part of a broad mandate to upgrade infrastructure, has shorter-term challenges. He has predicted a “summer of hell” for commuters, starting today. Tracks will be repaired, lengthening travel times and even forcing some New Jersey trains to be rerouted to Hoboken, never crossing the Hudson River. That’s on top of the congestion and delays train riders have endured for years. On Thursday night, Penn Station had its third train derailment since April.
‘Cramped, Unpleasant’
With Madison Square Garden remaining at its current site, Penn Station will be “cramped, unpleasant and continue to have poor passenger circulation,” said Justin Shubow, president of the National Civic Art Society, which advocates replicating the building that was destroyed. “Cuomo has said he wants a station as grand and triumphant as the original, but there’s no way we can get that as long as the Garden is in place.”
The state’s idea is that Penn Station will become friendlier, not as crowded and less oppressive once thousands of commuters are across the street. A separate plan to almost triple the width of the Long Island Rail Road concourse — running under West 33rd Street between Seventh and Eighth avenues — also will improve experiences for all commuters, including NJ Transit riders, according to Empire State Development, which is overseeing Cuomo’s directives.
The Moynihan project “will bring New York City the world-class train hub it deserves,” Howard Zemsky, president of Empire State Development, said in an emailed statement. The train hall “will open by the end of 2020 — far faster than any other option — and it does not preclude additional future improvements.”
‘Innovative Partnerships’
When Cuomo announced the Moynihan Station deal last month, he called public-private partnerships “the way we like to build.” In that, he was echoing comments from President Donald Trump, who said at a June 9 round table at the U.S. Department of Transportation that “innovative partnerships with the state, local and private-sector leaders will translate into dramatic improvements all across the country.”
Penn Station is “the poster child for the state of American infrastructure,” Jim Barry, global head of BlackRock Inc.’s real assets group, said today in an interview on Bloomberg Television. While institutional investors such as BlackRock, the world’s largest money manager, are interested in infrastructure projects like the train hub, “just saying come and put money into Penn Station won’t work,” Barry said. “It needs to be offered in a way that makes sense, such as a public-private partnership.”
Related and Vornado are operated by two of the nation’s biggest and most politically connected developers, Stephen Ross and Steven Roth, respectively. Ross, a longtime donor to both Republicans and Democrats, is building the $25 billion Hudson Yards project west of Penn Station, mostly atop a yard used for LIRR trains.
Vornado is the Penn Station area’s biggest property owner, with about 9 million square feet, including two buildings that sit on top of the train hub. Roth, whose company also owns skyscrapers in New York and San Francisco on which Trump is a minority partner, also is co-chairman of the president’s infrastructure task force.
Private Funds
Trump’s administration is making plans for $1 trillion in infrastructure spending across the U.S. Four-fifths of those funds are expected to come from sources other than the federal government.
Even with their compromises, there’s much offered by public-private partnerships, according to Wright of the Regional Plan Association, who along with Roth was appointed by Cuomo to the Penn Station Task Force. For one thing, they’re very project-specific. Private companies know exactly what they’re required to do and what they would get in return, which in the case of the Farley project is revenue-generating rentable space.
The developers have been looking ahead to leasing the offices. On Vornado’s earnings call in May, New York chief David Greenbaum said the Farley building’s open floors and high ceilings would appeal to creative companies in the market for large blocks of space. Related last month said it has already seen “great interest from tenants in this very compelling location.” Representatives for the companies declined to comment beyond their public statements.
The developers expect to have 730,000 square feet of offices to lease, plus 120,000 square feet of retail space. Floors can exceed 150,000 square feet, the size of two World Cup soccer fields.
Moynihan’s daughter Maura, who had taken up the cause of using the Farley building as a successor to the lost Penn Station after her father’s death in 2003, said she recognizes that the current plan isn’t going to be all things to all people.
“It would be nice if all of them could go — that was Dad’s original vision,” Maura Moynihan said. “But, you know, Governor Cuomo is doing the best he can. So much time has been lost.”
–With assistance from Elise Young and Mark Niquette.To contact the reporter on this story: David M. Levitt in New York at dlevitt@bloomberg.net To contact the editors responsible for this story: Daniel Taub at dtaub@bloomberg.net Christine Maurus
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