The future of the former Hotel Penn site is a tennis court, a mixed-use tower or, according to the latest vision, a public space that could rival Bryant Park.
The last of those is the hope of Manhattan Assembly member Tony Simone, who is calling on the Gov. Kathy Hochul’s administration to change its plans for the paused megadevelopment that could rise around Penn Station. Simone wants the state to add more housing to the plan to allow thousands of apartments, up from the 1,798 residential units pitched by the governor, and to shrink the amount of office space.
Under Simone’s proposed changes, upwards of 4,900 residential units could be built, though that figure would likely include hotel rooms as well.
The vision is still far from reality, and has an unclear path to being financially viable. Executives at Vornado Realty Trust, which controls five of the eight sites selected as part of the original plan, have repeatedly made clear that they view ground-up development virtually impossible in the current economic climate.
In an earnings call in February, Vornado CEO Steve Roth said the former Hotel Penn site was “ready to go,” but high interest rates, a lack of eager capital and the threat of federal tariffs on key construction materials likely stood in the way of the project moving forward, at least in the short-term.
Roth said the company was considering its options for the site, but would likely build a mix of office and residential space. The company has floated short-term uses for the site — including tennis courts — but it seems unlikely that the real estate investment trust would be keen to scrap development plans for the site in favor of a non-revenue-generating park.
The real estate investment trust declined to comment.
The state would also likely need buy-in from the other owners of the buildings where Simone envisions adding more residential space — a dozen properties, mostly on 34th Street.
Simone acknowledges that his proposed changes are a starting point and not likely the final plan for the sites. He hopes the proposal, at least, gets the project moving again.
“It’s the beginning of a grand vision for a neighborhood around Penn Station,” he said in an interview.
In statements, Council member Erik Bottcher, Manhattan Borough President Mark Levine and Sen. Brad Hoylman-Sigal voiced support for revisiting the general project plan for the Penn Station megadevelopment and for including more housing.
Nearly two years ago, Hochul paused the plan for the Penn area, which called for 10 towers across eight sites, netting 18 million square feet of commercial space and more than 1,700 apartments. At the time, she rebooted efforts to redesign the station itself, though the state has not provided updates on the project.
Developers of the surrounding projects were expected to make payments in lieu of taxes, or PILOTS, that would help finance upgrades and a possible expansion of the station. When she put the broader development on ice, Hochul said that she would not wait for that revenue to move forward with work on the station but would seek federal funds.
But it is unclear how this work will be financed as threats to federal funding loom and the state fights to keep a key revenue-generating source, congestion pricing. The combined price for the station upgrades and expansion was $22 billion as of 2022. In November, Sen. Chuck Schumer announced that he had secured $72 million in federal grants to help pay for design work for station upgrades.
A representative for Empire State Development said in a statement that Hochul “remains committed to her vision for a new and improved Penn Station, anchored by hundreds of new homes, seamless access to transit, and major improvements to the surrounding streets and sidewalks.”
When Hochul paused the broader development, she indicated that she was open to rethinking the makeup of the new towers, potentially by adding more housing. The state budget last year lifted the city’s residential floor area ratio cap, potentially allowing for more residential density in the area.
Read more
Development
New York
State greenlights massive Penn Station development plan
Politics
New York
Hochul shelves Vornado-led Penn Station megadevelopment