Federal takeover of Penn Station could be Trojan horse for new Midtown skyscrapers

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President Donald Trump’s plan to rebuild Penn Station could pave the way for a skyscraper building bonanza around the transit hub, according to documents published by Amtrak last month.

In a notice to potential builders, the national railroad wrote it’s open to proposals that would extend the redevelopment “outside of the station and/or Amtrak’s property boundaries.”

That leaves open the door for a developer to erect new buildings in the neighborhood to help cover part of the cost to overhaul the beleaguered train hall.

The notice seems to contradict recent comments from U.S. Department of Transportation officials, who promised the Penn Station rebuild would be contained within the existing footprint. For years, Manhattan residents have protested plans to overhaul the entire neighborhood as part of the project.

The idea of financing parts of the Penn Station reconstruction with revenue from new skyscrapers isn’t new. Gov. Kathy Hochul and former Gov. Andrew Cuomo both pitched different versions of the concept. But they ultimately fizzled after the company Vornado, which owns the bulk of the real estate around Penn, reported in 2022 that there wasn’t enough demand to build new office space in the area due to remote work habits that began in the COVID-19 pandemic.

But now, after the Trump administration seized control of the station’s rebuild from the MTA, the company is bullish.

On a call with investors last week, Vornado CEO Steven Roth said the company’s leases this year have skyrocketed to the highest in a decade and the second highest on record. He reported “the Penn District will be a growth engine for our company for years to come, with rising rents and future development projects.”

Roth also said Vornado planned to work with a builder on a pitch for the Penn Station rebuild.

“We will be involved in the process with one of the bidding groups, primarily with respect to the retail that we dominate in the station and in the surround[ing area],” he said.

Amtrak spokesperson Jason Abrams said it would be “premature to speculate” on any real estate plans tied to Penn Station.

“Our priority is to identify private-sector partners who can deliver this project efficiently and cost-effectively — ensuring it stays on schedule, within budget and minimizes costs for taxpayers,” Abrams wrote in a statement.

Nicole Gelinas, a senior fellow at the Manhattan Institute, said the Trump administration might be working with Vornado and other developers on a Midtown land grab.

“I think people who live in the area, including on the residential and commercial block just south, should still be concerned that we've only moved the possibility of a land seizure by the state to a land seizure by the federal government,” Gelinas wrote in an email. “There is a risk of federal eminent domain to fund some of this — e.g. that Trump sees this through Vornado's eyes as an above-ground urban renewal project and not a modest underground train station project.”

New office space near Penn could also undercut other major construction plans elsewhere in Manhattan, said Steve Cohen, a former Port Authority vice chair who also oversaw the construction of Moynihan Train Hall as head of the state’s Empire State Development nonprofit.

Cohen pointed out the Port Authority is seeking to finance the rebuild of its Midtown Bus Terminal with fees on new skyscrapers in the area. He wasn’t sure there was enough demand for new office space near Penn Station and the bus terminal only seven blocks north.

“Somebody should look at what the impact of that is going to be on the real estate market and also in terms of the impact on infrastructure,” said Cohen. “It becomes a potential for there to be a bit of a mess or something that just doesn't work together as a series of projects.”

For now, the feds say they’re moving ahead on Penn Station. They’re collecting proposals for the rebuild over the next year and hope to get shovels in the ground in 2027.

NYC transportation news this week

The fight over “daylighting.” Lawmakers and street safety advocates rallied Wednesday in support of a bill to ban parking at the corners of thousands of city intersections, arguing the practice would prevent fatal crashes. Mayor Adams just two years ago vowed to accomplish exactly what the legislation calls for, but his administration changed course last year after releasing a report arguing “daylighting” actually made many intersections more dangerous.

Two new ferry routes. Starting Dec. 8, NYC Ferry will run boats directly from Throgs Neck to the Rockaways and from Bay Ridge to St. George Terminal on Staten Island.

One short day for the Holiday Open Street. This year, Fifth Avenue will be shut to cars between 47th and 57th streets from noon to 6 p.m. on Sunday, Dec. 14.

Bigger cruise ships. Officials have laid out new plans to overhaul the aging Manhattan Cruise Terminal with new facilities and modern piers capable of handling some of the world’s biggest passenger ships.

Curious Commuter

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Question from Auxil in Brooklyn

How much does the MTA spend on private security officers posted at turnstiles and have they cut down on fare beaters?

Answer

The MTA reports it spent $70 million on subway gate guards last year. And the agency believes it's worth the cost. Last year, Chair Janno Lieber said fare evasion fell 25%-30% at stations with gate guards.

“MTA is evaluating ways to decrease that number in 2026 as the agency continues to roll out more infrastructure changes to combat fare evasion,” spokesperson Amanda Valdes told Gothamist.

The MTA has also implemented 15-second delays at exit gates at 150 stations and outfitted turnstiles with fins and medieval-looking spiked metal sheets to prevent people from clambering over them.

Yet the problem of fare beating persists. Recent stats show 11% of riders don’t pay the subway fare, a number that’s remained pretty steady and is only down from a recent high of 14% last year.

So are the gate guards worth it? In 2022, the MTA claimed it lost $285 million a year to subway fare evasion. This year, the Citizens Budget Commission crunched publicly available data and found in 2024 the MTA lost $350 million to fare evasion.