Lawmakers, advocates call for Hochul to give up control of Penn Station project

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Lawmakers, advocates call for Hochul to give up control of Penn Station project


It’s not the first time this group has made the suggestion, but after a recent public hearing on the project, lawmakers and critics of it are increasingly concerned about how the project will be funded and how much taxpayers could still be on the hook for if developers come up short with their side of the deal.

“To establish clear accountability, including the fulfillment of any and all commitments in the plan, it is essential to establish a multi-party coordinating entity,” Levine wrote in the letter to Hochul.

He cites examples of other major state-backed development projects in the city that had also created similar entities to coordinate big projects such as Hudson Yards, which had the Hudson Yards Development Corporation and the Lower Manhattan Development Corporation, which formed 9/11 as a way of rebuilding the area near the World Trade Center.

There are a total of 14 development corporations that serve as subsidiaries under ESD across the state. Their mandates vary according to its agreed upon bylaws. Each development corporation, composed of its own board of directors, was authorized as an ESD subsidiary after establishing a “statement of justification.” Those justifications could be administering funds, finalizing contracts, or overseeing long-term redevelopment projects.

Hochul is non-committal on the request.

“We have received the letter and thank the local, state, and federal representatives for their thoughtful input,” Hochul spokesperson Justin Henry wrote in a statement. “Gov. Hochul understands the value of coordinating entities to assist with neighborhood planning and looks forward to working with elected partners to develop the comprehensive plan the Penn area needs.”

State Sen. Brad Hoylman, who’s long opposed the project, signed the letter and believes it’s the best way forward with a project that appears to be moving forward.

“Elected officials and community leaders are going to need a one stop shop to understand this extremely complicated and enormous project,” Hoylman told Gothamist.

Creating more transparency

The entire project includes building 10 new office towers, eight acres of open space around Penn Station, as well as redesigned entrances and the mezzanine for the train station, which would be built without moving Madison Square Garden.

Still, not everyone believes a new organization would result in a more transparent or easier to understand process. Nicole Gelinas, senior research analyst with the conservative Manhattan Institute think tank group, said the current set-up, in which transit agencies will manage the upgrades on their property, while real estate developers work within the existing zoning rules, is adequate.

“The last thing we need is more single-purpose entities that quickly become their own fiefdoms,” Gelinas wrote to Gothamist. “As a legal matter, any such entity is likely to be a subsidiary of ESD, anyway, to take advantage of ESD’s powers. Doing this through a special entity, whether ESD or not, is exactly the problem.”

Rachael Fauss, a senior research analyst with the good government group Reinvent Albany said the ESD has failed so far to show how the project will be funded, what the risk to taxpayers might be and why this project is the best way to improve Penn Station. And she thinks a new entity could create an added bureaucratic hurdle toward getting those answers. But if it’s well structured it might help.

“The public has to be able to see into the finances and understand if the taxpayers and MTA riders are getting the best deal possible for this, and so far we haven’t been shown the evidence that this project is the right answer for how to fund Penn Station upgrades,” Fauss said.

shedding light

Lawmakers and opponents of the project had hoped a recent state Senate hearing on the Penn redevelopment might shed some light on the financing structure, which is expected to use a fee to the developers to fund improvements to the neighborhood and part of the Penn Station upgrades.

ESD has previously said taxpayers “would be made whole,” but still hasn’t elaborated on the agreement struck with developers, mainly Vornado Realty Trust, which owns the majority of the properties that would be developed. Its founder, billionaire Steven Roth, and members of his family, have contributed hundreds of thousands to the reelection campaign of Gov. college

Lynn Ellsworth is leading the advocacy against the project as it’s currently being presented, in an effort to preserve the neighborhood around Penn Station, as co-coordinator of the Empire Station Coalition and chair of Human-Scale NYC. She agrees one entity could be a good step toward improving how the project moves forward, but she believes the project now is inadequate to address the needs of commuters, residents and the future of the city.

Should a new entity form, Ellsworth said she’d like to see an independent economist present the cost-benefit analysis that justifies using this project to turn Penn Station into a through running station as opposed to a terminal. This would require the MTA, and NJ Transit to be more coordinated, and allow each agency’s train to share tracks and stations. This could allow Penn to be more efficient, handle more passengers and give commuter railroads passengers more options.

“It’s sort of unprecedented, so maybe we need an unprecedented way to handle it,” Ellsworth said.

But it seems unlikely to happen. The ESD approved the final Environmental Impact Statement for the project at the end of June. At the end of July it will vote on the General Project Plan, the overall structure of the plan, as presented by Hochul.

The plan still awaits approval from the Public Authorities Control Board, the same board who’s lawmakers killed the Amazon deal in Long Island City, Queens. After that incident, under then-Gov. Andrew Cuomo, a bill passed that allows the governor to remove any members of that board.

One of the members of that board, state Sen. Leroy Comrie, has publicly opposed the Penn project. And he’s put forth a piece of legislation that would undo the Cuomo change and restore some independence to the board. While the measure passed both houses, Hochul hasn’t signed it yet, and doesn’t seem willing to do so before the project’s plan is voted on this month.

“I’m not constrained by artificial deadlines,” Hochul said at an unrelated press conference Tuesday. “I have December 31st as my hard deadline, everything will be resolved by December 31st, everything requires a thoughtful response.”

She added that lawmakers are the ones who agreed to the Cuomo-era bill in the first place, “they passed the law everyone’s complaining about.”



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