Gov. Kathy Hochul said Tuesday she would move forward with the controversial plan to rebuild Penn Station after the head of the company that owns many of the buildings around the transit hub appeared to voice concern over the economic timing of the project.
In an exclusive interview with NY1, Hochul, who is running to retain her post as governor in next week’s general election, said the project would improve the neighborhood and serve as a draw to major employers.
“I am committed to this because that neighborhood needs to be lifted up,” Hochul said. “It should not be looking like a ‘skid row’ neighborhood.”
“The whole train station needs to be just — start over, lift it up, bring it to one level, bring more light in,” Hochul added.
Hochul’s comments came after Steven Roth, the chief executive of Vornado Realty Trust, discussed the difficulty of developing new projects in a shaky economy.
“I must say that the headwinds in the current environment are not at all conducive to ground-up development,” Roth said in an earnings call with investors.
Later in the call, however, in response to a question about the future of office space use in the city, Roth said he believed that New York would remain “the capital of the United States.”
“We are absolutely, strongly convicted about what we’re doing in the PENN District,” Roth said, using the name his company has given to the area around the transit hub. “We think that PENN is going to be another center of New York and an extraordinary success. So we’re very, very, very excited about that.”
Vornado Realty Trust did not immediately respond to a request for comment.
The redevelopment plan, which has a full price tag of $22 billion and which the state has estimated could cost it $7 billion, would see Penn Station overhauled and create 18 million square feet of new building space — a similar number to Manhattan’s Hudson Yards. It may also displace 214 residents living just south of Madison Square Garden.
The state has said it will fund the project in part by effectively offering city tax breaks to Vornado. Mayor Eric Adams voiced his support for the plan after the state agreed to reimburse the city for the lost tax revenue.
The complicated funding scheme that the state has said it plans to use to fund the project has come under fire from watchdog groups. A report from Reinvent Albany, a nonprofit that advocates for government transparency, found that Vornado could receive $1.2 billion in tax breaks in exchange for payments that would support further bond funding to cover the state’s costs for the project.
Yet the report suggested that those payments would only cover about half of the state’s projected costs.
In the interview, Hochul suggested that the state would move forward with the project regardless of the proposed funding deal with Vornado.
“We have other sources of financing for Penn Station,” she said.
Hochul suggested that the mix of uses for the proposed new buildings in the area, such as adding more housing, could change. Earlier this year, when Hochul unveiled the latest version of the plan, her office brought the total number of affordable units included in it up from 163 to 648.
The Penn Station project is the subject of multiple lawsuits, with the latest coming from a neighborhood group claiming that the state authority responsible for the development plan, the Empire State Development Corporation, illegally bypassed city processes for major construction ventures.
The Empire State Development Corporation did not immediately respond to a request for comment.