NY Governor Kathy Hochul should consider canceling former NY Governor Cuomo’s proposed Penn Station “Empire Station Complex” managed by the Empire State Development Corporation. It faces many financial, legal and operational conflicts and issues. This $16 billion project, just like the Port Authority $10 billion new 42nd Street Manhattan bus Terminal, are both counting on the sale of air rights as a source for billions to help defray construction costs. There is a glut of surplus office space in Hudson Yards and other Manhattan neighborhoods Both projects are located on the west side of midtown Manhattan only eight blocks apart. They will be competing against each other for tenants.
If the air rights sale generates less than anticipated revenue, the shortfall could be billions. This deficit will have to be made up by ESDC – the project sponsor. They will look toward the states of NY and NJ, the MTA and NJ Transit for a bailout. This means higher MTA and Port Authority bridge tolls, fare increases for NJ Transit, LIRR and NYC Transit subway riders along with other tax increases and user fees.
In our new COVID-19 world, the MTA and NJ Transit need to reevaluate previous anticipated future ridership growth projections for investments such as the Empire Station Complex. Will there really be thousands of new riders who will work in this new development? More people are going to continue telecommuting from home part or full time. There will be fewer face to face meetings and conferences, with increased useage of Zoom and other teleconference technologies. Many Manhattan based corporations are downsizing existing office space. There really is no need for new office space that would be built as part of the Empire Station Complex. .
(Larry Penner is a transportation advocate, historian and writer who previously worked for the Federal Transit Administration Region 2 New York Office.)