New York City has reached an agreement with the state on funding for the renovation and possible expansion of the city’s Penn Station transit hub, along with revitalization of the surrounding area..
Governor Kathy Hochul and Mayor Eric Adams announced the agreement Monday (July 18).
The financial framework will ensure the city maintains a current and consistent level of property tax revenue while requiring that funding for the station, vibrant open space, and public realm improvements, comes in part from private development.
The agreement also affirms the state’s ongoing commitment to rebuilding Penn Station without raising taxes on New Yorkers or fares for transit riders, the governor’s office said.
As part of the agreement, the city and state committed to establishing a shared city-state governance entity to oversee public realm improvements and ensure comprehensive and coordinated planning and implementation.
“The current Penn Station is unsightly, inefficient, and impossible to navigate, and New York commuters deserve better,” Hochul said.
“This agreement brings us one step closer to a beautiful, modern station worthy of New York with vibrant open space, lively streetscapes, and better, more seamless connections to local transit.”
“This partnership underscores the commitment by leadership at the city and state level to work together and ‘Get Stuff Done’ for New Yorkers,” Adams said.
“A state-of-the-art transportation system is at the heart of our ability to have a prosperous life and a prosperous city, and the key to an equitable recovery.
“The new vision for Penn Station is to our generation what the Empire State Building was to previous generations: a symbol of our resiliency and a project that will define our city for decades to come.
“Today’s agreement is a win-win for New Yorkers – helping to deliver improved transit access, affordable housing, and quality jobs while also safeguarding future revenue and protecting against financial risk.”
Under the agreement, funds from privately financed development will help pay for a reconstructed Penn Station, the potential expansion of Penn Station, and improvements to the surrounding area that the city-state governance entity will oversee. The project is to include enhancements to the streets and sidewalks, the creation of new public spaces in the area around the station, and the construction of more seamless transit connections between Penn and nearby subway stations.
The state will sell development rights to private developers and collect payments-in-lieu-of-taxes (or PILOTs) on newly constructed, modern, and environmentally friendly office and residential buildings.
The amount of PILOT payments collected in excess of existing property taxes, in addition to revenues from the sale of additional development rights, will help to fund the project, the governor’s office said.
Remaining costs would be funded through a combination of sources from the federal government, New Jersey, New York State, Amtrak and other public funding sources.