Rival developers cheer Zeldin vs Hochul’s Penn Station plan


Two city development honchos cheered Republican gubernatorial candidate Lee Zeldin’s attack on the Gov. Kathy Hochul-backed Penn Station-area redevelopment proposal.

The real estate  insiders, who unsurprisingly insisted on anonymity for themselves and their firms, said they don’t support Zeldin on some other issues — but cheered his  thumbs-down  of the Penn plan, which would give Vornado Realty Trust a head start  in future office projects.

As we reported last week, Zeldin called Hochul’s proposal a “deeply flawed boondoggle” that would “waste away billions of tax dollars.” 

Zeldin’s opposition marked a rare alignment of left and right. Most prior criticism of the plan came from liberal Democratic elected officials and community board activists who called it a “giveaway” to Vornado.

The Penn proposal, drawn up under former Gov. Andrew Cuomo and only slightly tweaked by Hochul, would give Vornado, led by founder Steven Roth,   the inside track  to build on at least five mostly low-rise sites that it owns in the zone earmarked for major new commercial building around the station. (Vornado is already upgrading two others that it owns, PENN 1 and PENN 2, which are not part of the larger proposal.)

Lee Zeldin has found unexpected support in his criticism of the Penn Station plan -- in the form of developers who are rivals to Vornado Realty.
Lee Zeldin has found unexpected support in his criticism of the Penn Station plan — in the form of developers who are rivals to Vornado Realty.
Polaris

One official of a rival development company told Realty Check: “The issue is the long term. Everybody knows there’s no market for big new office buildings right now. It would take years before they got all the green lights they still need  in any case.”

In fact, while the state Public Authorities Control Board blessed a loose framework for financing the scheme last summer, it would still need a bevy of federal and environmental approvals.

“But if demand for new construction  eventually comes back, which it will, Vornado would have a big advantage,” the source continued. “Payments [to the state and city] in lieu of taxes would save them a lot.” Watchdogs estimated Vornado’s tax saving at $1.2 billion.

Some critics say Kathy Hochul's plan to renovate Penn Station is doomed without incorporating a revamp of adjoining Madison Square Garden.
Some critics say Kathy Hochul’s plan to renovate Penn Station is doomed without incorporating a revamp of adjoining Madison Square Garden.
AFP via Getty Images

“Plus,  Vornado  wouldn’t have to struggle to get zoning variances, because Empire State Development would override city zoning under the master plan.”

That’s true but misleading, however. The state would first need to condemn land at each    site and then have the PACB approve specific  plans for it — a process that, in theory, could prove as prolonged and contentious for Vornado as the city’s ULURP system.

A different  insider fumed, “The whole rationale that Hochul always talks about is to give us a new Penn Station. But they don’t need a $22 billion plan to upend a whole neighborhood and evict people just to improve the station.”

For sure, commuters might be forgiven any confusion. Wasn’t the Moynihan Train Hall supposed to be a “new Penn Station?” What about signs all over the existing station complex touting a “transformation” already in progress, mostly in the LIRR portion?

The messy truth is that  Amtrak-owned Penn Station can’t be meaningfully redesigned for any price  as long as Madison Square Garden sits on top of most of it.

Zeldin pointed out that the issue of renewing its license  with the city, which expires in 2023  hasn’t been resolved. But a source scoffed,  “The idea of moving the Garden is a fantasy. All the politicians, Democrats and Republicans, are afraid of the Dolans,” who have no intention of moving.  

Steve Roth last week told jittery Vornado investors that the time is “not conducive” to ground-up Penn-area construction soon.
Steve Roth last week told jittery Vornado investors that the time is “not conducive” to ground-up Penn-area construction soon.
New York Governor’s Office

Roth last week told jittery Vornado investors that the time is “not conducive” to ground-up Penn-area construction soon. He even said, “I’m going to duck that question” when asked about the site of the Hotel Pennsylvania, which is being demolished and  where the largest of the proposed skyscrapers was supposed to rise.

We’re told that his pause-button statements  blind-sided state officials who didn’t know they were coming.

The project has also been hit with three major lawsuits that challenged its legality and lack of transparency.



Source link