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Good government groups and local officials have criticized the major infrastructure project because it would primarily benefit one developer, Vornado, which owns much of the land in the immediate vicinity of Penn Station. Vornado CEO Steve Roth donated the maximum allowable amount of $69,700 to Hochul’s reelection campaign and was also a major donor to her predecessor, Andrew Cuomo, who crafted an earlier version of the plan.

But state officials say its the surest way to upgrade Penn Station, which even opponents of the plan agree is in desperate need of renovations. The dilapidated train hub wasn’t built to accommodate the nearly 600,000 people passing through it daily before the pandemic.

The move comes as state officials prepare to apply for funding from the Biden administration’s federal infrastructure package, which set aside roughly $30 billion in competitive grants that could go toward rail projects in the Northeast Corridor. Projects that have confirmed funding from local revenue sources are more likely to win larger portions of federal funding.

“The way everybody is approaching it is, if you can get a commitment in the next six to 12 months, you have a real chance,” said Tom Wright, the president and CEO of the Regional Plan Association, a transportation advocacy organization that supports the Penn Station redevelopment plans. “But if you’re in a process that will take two to three years, you’re probably kidding yourself and the funding won’t be available in that kind of time frame.”

To that end, Hochul and New Jersey Gov. Phil Murphy recently struck a separate agreement on how to split the costs of the first phase of the Gateway Program, a $10 billion effort to rebuild and expand the rail tunnels under the Hudson River. Hochul and Murphy are also trying to secure funding from the federal infrastructure package for that project.

Transportation experts say state officials should lock down federal funds before November's midterm elections, warning that a change in congressional leadership could erect roadblocks for future infrastructure initiatives. The Gateway Program was delayed for years after former President Donald Trump refused to move it forward amid political infighting with its biggest supporter, Senate Majority Leader Chuck Schumer.

“All of this is made against the ticking clock of midterm elections and the potential of a changed Congress and congressional leadership to make things harder for us,” Wright said.

New York officials want to tear down Penn Station and transform it into a single-level train hall with wider corridors and an easier layout to navigate. A key component is the addition of a new glass atrium over a former taxiway to allow more sunlight to enter the train station, which requires securing certain development rights from Madison Square Garden, as POLITICO first reported. The plan also involves creating roughly eight acres of public space and new protected bike lanes nearby.

Developers plan to add 10 skyscrapers, containing mostly amenity-rich office space. The proposal adds 1,800 units of housing, of which 540 apartments would be rent-regulated.

Under the agreement crafted by the city and state, the amount of PILOT payments collected in excess of existing property taxes will help fund the project. Revenues generated from the sale of additional development rights will also go toward the decades-long initiative. ' 

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