Beacon News

By John Yeung, Vice President, Beacon Consulting Group

Beacon's New York City office is a short walk from Penn Station, the busiest railway station in North America. More than 640,000 subway, commuter rail, and Amtrak passengers pass through the station on an average weekday. The station is a terminal for trains run by Amtrak (which owns the station), Long Island Railroad, NJ Transit, and the New York City Transit Authority (MTA), with more than 1300 arrivals and departures on weekdays.

Because the station is nearly 60 years old and serves twice the number of daily trains (and passengers) as it did in 1970, Penn Station's underground areas can often feel over-crowded, dark/dreary, and very out-dated. The station has many areas with low ceilings, crowded train platforms, and cramped waiting areas, stairs and escalators. Overall, commuting through Penn Station can feel like being a rat trapped in a dark, funny-smelling maze! Because the station is so busy, and is located beneath Madison Square Garden (a 20,000 seat sports & entertainment arena), undertaking a major renovation is a tremendous challenge.

In November of 2021, New York State Governor Kathy Hochul unveiled plans for a major renovation and revitalization of Penn Station and its surrounding blocks (*See images / artists renderings at the bottom of this page).

When completed, the project will transform Penn Station and the entire neighborhood around the station. In late July of 2022, officials from New York State's economic development agency (Empire State Development) approved a $7-billion redevelopment plan for Penn Station and the surrounding blocks, which will include:

• 10 new skyscrapers to be built by private developers and which will receive approx. $1.2 billion in tax breaks
• The new towers will include about 18 million square feet of office space, up to 1,800 residential units, retail space and a hotel
• Penn Station itself will not add new train tracks or platforms under this project, but the renovation will address the main complaints of commuters by adding taller ceilings, bringing in lots more natural light, adding 18 new entrances, and building larger underground passageways/walkways leading to the subway platforms and rail lines.
• Outside Penn Station, a park-like 0.7-acre plaza will feature wide sidewalks, bicycle lanes, landscaped areas, and lots of seating.

At this stage, there are no details about how large the various new buildings will be. However, it is likely that one or more of the towers will exceed 1000 feet in height, and one of the towers could be among New York's largest buildings in terms of total square footage. The plan is to collect payments from the developers of these new buildings in order to help finance the planned and future renovations to Penn Station itself.

It's not yet clear when construction might start, but planning work on the project could start soon. The project will require the demolition of a number of existing structures to clear the way for the new buildings. Among the structures likely to be demolished will be a building housing a Hooters bar/restaurant, parking garages, tourist shops, an Irish Pub, and 150-year-old church. Vornado Real Estate, one of New York's largest real estate development companies, owns a number of the sites where the new buildings will rise.

New York State officials have also endorsed a separate $13-billion plan to build a new train hall south of the current Penn Station site which would increase the station's total rail and passenger capacity, including adding new lines and platforms. That project is separate from the recently announced Penn Station renovation project and will still need to get federal approval. Thus, its likely that the Penn Station renovation project will happen first (within the next several years). Right now, it's also not clear what will happen with Madison Square Garden (MSG) in the future. The arena's operating permit expires in 2023, but the proposed Penn Station redevelopment project does not seem to impact MSG's existing footprint (*please see images / artists renderings for the project below).