The Penn Community Defense Fund takes on Vornado Realty Trust and Governor Hochul in a fight over Penn Station’s future

Rumble on 34th Street

The Penn Community Defense Fund takes on Vornado Realty Trust and Governor Hochul in a fight over Penn Station’s future

(valerii eidlin/Shutterstock)

Yesterday, members of the Penn Community Defense Fund (PCDF) filed a lawsuit against the State of New York in New York State Supreme Court in Manhattan. PCDF consists of good government groups, advocacy organizations, and concerned citizens that are opposed to the current plan to redevelop Penn Station.

The central claim of PCDF’s lawsuit is that the State’s environmental review for the Penn Station master plan was illegally “segmented” and that the State sidestepped the Uniform Land Use and Review Procedures by declaring the area around Penn Station “blighted.” PCDF’s goal is that Empire State Development Corporation’s General Project Plan is “declared illegal and better alternatives can be presented and debated by the public utilizing the proper review processes,” Sam Turvey, a coordinator in the PCDF and chairperson at ReThinkNYC, told AN.

In a document titled Discussion Points: Litigation Challenging the State’s Redevelopment Plan for the Properties Surrounding Penn Station reviewed by AN, PCDF aired its grievances. “New York State’s Empire State Development Corporation (ESD) has proposed to override the City’s zoning laws and grant the owners of eight sites surrounding Penn Station approximately 18 million square feet of development rights—a 76 percent increase above current zoning,” the report stated. (ESD is “the umbrella organization for New York’s two principal economic development financing entities: The New York State Urban Development Corporation and the Department of Economic Development.”) The argument continues: “The proposal is ostensibly intended to fund the expansion and reconstruction of Penn Station, but its primary purpose is to enrich Vornado Realty, one of the largest contributors to Governor Hochul (and before her, Governor Cuomo) and the owner of five of the eight sites that would benefit from this plan. There is near-unanimity — at least, among those who don’t have a financial interest in this project — that it is an abuse of state power, grounded in self interest, and a usurpation of the City’s quintessentially local power to zone. Nevertheless, ESD ploughs ahead.”

PCDF claims that nearly every transportation change the State has made for improving Penn Station is purely “cosmetic,” suggesting its transit strategies don’t address the core issues that make using the station difficult. Moreover, PCDF questions whether or not the “State actually needs this deal in order to fund the reconstruction of the station,” suggesting that the agreement will largely enrich Steve Roth, CEO of Vornado Realty Trust, in exchange for his past campaign patronage. Additionally, PCDF stated its intention to bring its lawsuit to federal court once the Department of Transportation has completed its own Final Environmental Impact Statement (FEIS), which will be “at least a year from now,” the reviewed memo stated.

In their lawsuit, PCDF alleges that ESD has committed “segmentation,” meaning that its Penn Station proposal is being planned separately from Amtrak’s Gateway Program (a multi-billion dollar initiative to deliver a new 2-track rail tunnel between New Jersey and midtown), as well as separately from the surrounding area’s redevelopment plan by Vornado. This action would violate the State Environmental Quality Review Act and thus be illegal.

PCDF’s action also questions the language and reasoning that has been used to validate the State’s takeover of the area around Penn Station, namely the claim that the area around Penn Station is “blighted,” as the State suggests. “The neighborhood comes nowhere near meeting the definition of ‘blight,’ which it must meet in order to qualify as a proper Land Use Improvement Project under the [Urban Development Corporation] Act,” the report read. “In fact, the area is studded with prosperous commercial towers — and historic structures as well, some of which are already landmarked.” The document notes that staffers at Vornado Realty Trust don’t even believe the neighborhood is “blighted,” citing an internal memo Vornado addressed to shareholders. “Day and night, the Penn District is teeming with activity,” the Vornado memo stated. “Our assets sit literally on top of Penn Station, the region’s major transportation hub, adjacent to Macy’s and Madison Square Garden. … The Penn District is our moonshot, the highest growth opportunity in our portfolio.”

Urban Renewal 2.0

While it’s often thought that urban renewal ended in New York in the 1970s, it continues today, as New York City currently has 62 active urban renewal areas. In recent years, there have been several landmark projects built within urban renewal areas. For example, SHoP’s Barclays Center in Brooklyn, completed in 2012, was developed as part of the Atlantic Terminal Urban Renewal Area, and the office’s tower in downtown Brooklyn currently under construction is located within the Brooklyn Center Urban Renewal Area. Additionally, an ongoing 596-acre project in Edgemere, Queens, and an 18-acre development in Brooklyn Triangle are being developed using the same mechanisms as Barclays Center, generating pushback from local community groups.

Officials moving forward with the Penn Station master plan leverage similar mechanisms, albeit at the state level. In 2018, ESD invoked Section 4 of the Urban Development Corporation Act to bypass local zoning processes after making the claim that Penn Station is “unsanitary,” and thus blighted. Section 4 of the UDC Act is the basic instrument that will potentially allow the state to seize properties around the station by eminent domain after declaring them blighted, using language that recalls the racially charged verbiage officials used between the 1940s and the 1970s to clear out non-white neighborhoods.

In the midst of other development initiatives, the redevelopment of the area around Penn Station into THE PENN DISTRICT (a map of the proposed developed sites can be viewed here) is one of the most significant campaigns in the city. Advanced by the State of New York, ESD, and Vornado, the project stands to deliver 18 million square feet of new commercial office space at a time when demand for Class A real estate is at a historic low and entire office buildings throughout Manhattan have stood vacant for years. A recent article found that only about 47 percent of New York’s workforce is going into their offices these days and that remote work could knock 39 percent, or $50 billion, from the value of New York City offices.

Today, organizations like the City Club, ReThinkNYC, Community Board 5, Midtown South Community Council, Trains Before Towers, Tri-State Transportation Campaign, Human Scale NYC, PCDF, various tenant and neighborhood associations, and the general public await information about the megadevelopment. Already, McKim Mead and White’s Hotel Pennsylvania is wrapped in scaffolding and set for demolition after Vornado first purchased the property in 1999. Meanwhile, Vornado has topped out on a new entrance to PENN 2, while also recladding the tower with new glazing. Foster + Partner’s PENN 15, set to rise 1,270 feet above the street, is next in line as part of Vornado’s 7.4 million-square-foot PENN DISTRICT master plan.

Working alongside the PCDF is Charles Weinstock, a New York attorney with experience in land use disputes, who is intent on sourcing answers for the public. On September 1, Weinstock filed a lawsuit at the Manhattan District Court under the Freedom of Information Law demanding, “that Empire State Development (ESD) release records related to the state’s negotiations with the developer Vornado, the largest property owner affected,” according to a recent article by The City. “ESD has been particularly zealous in concealing the central role played by Vornado Realty Trust,” in Penn Station’s redevelopment, Weinstock said. At the core of Weinstock’s argument is that “collusion between a state agency [the ESD] and the private company [Vornado] that would be the project’s primary beneficiary” has taken place.

In his lawsuit, Weinstock claims that the state’s lack of transparency in what may be the most consequential infrastructure plan in New York is “an affront to open government.” Weinstock, however, isn’t alone in making these claims. Richard Ravitch, the former chair of both ESD and the Metropolitan Transit Authority (MTA) said last July that “perhaps the most outrageous thing about the plan is how little we know about it.” He continued: “The ludicrously low level of transparency is reason enough to postpone the plan.”

In his filing, Weinstock noted that the 3D renderings the State has shown the public to represent the project have been gravely inaccurate, suggesting that the visualizations have been intentionally misleading. Every photosimulation in the Draft Environmental Impact Statement has errors, according to detailed analysis by Brian Heagney of George M. Janes & Associates, an office of zoning experts, who reviewed submittals from the State issued on November 3, 2021. In Exhibit C of Mr. Weinstock’s analysis, Heagney summarized that “there are several different types of errors, but most have the same bias: they systematically understate the size of the proposed action and minimize the impacts of the action on the area’s visual resources.” He found that “these errors are serious and render the conclusions drawn within the chapter unusable.”

Weinstock’s lawsuit emphasizes that Vornado Realty Trust is at the center of this operation. Steve Roth, who is the main beneficiary behind the Penn District’s $1 billion tax break, has donated significant sums of money to Andrew Cuomo and Kathy Hochul’s bids for state-wide political roles. In 2015, Roth donated $69,700—the maximum allowable sum that a private individual can give to a political candidate—to former Governor Andrew Cuomo’s campaign for reelection. After Cuomo stepped down from office in 2021 because of sexual harassment charges, he donated $69,700 to Governor Hochul’s campaign to remain in office.

Today, many want to know what Steve Roth is getting in exchange for his financial patronage. To this question, Weinstock claims that “Mr. Roth has gotten his money’s worth. Surely it was not a coincidence that ESD drew the boundaries of the project area to include five Vornado properties. Moreover, as the [State of New York’s] Final Environmental Impact Statement (FEIS) acknowledges, if ESD’s federal partners do not go forward with their still-uncertain plan to extend Penn Station to the block south of 31st street, the project would excise the three sites that Vornado does not own or control.” (Emphasis in the original.) In describing these ties, an article by Politico said the plan may be the “biggest windfall to a politically-connected private developer in recent history.

ReThinkNYC’s Sam Turvey echoed Weinstock’s frustration when describing the plan’s lack of transparency. Moreover, Turvey said that the current gubernatorial administration shows little signs of improvement from the previous one. “When Governor Hochul came into office, she said she would be much more receptive to, transparent, and responsive to the public about alternatives at Penn Station,” Turvey told AN. (Turvey was also the organizer of a protest at Penn Station in August.) “Yet, in many respects, she is behaving worse than the Cuomo administration in that she keeps claiming to be listening to the public, but clearly she is not,” he said. “The local elected officials, community boards, and civic organizations, by a large majority, oppose this project.”

Displacement Ahead?

If the current plan moves forward, it stands to displace thousands of people from at least 1,172 apartments and hundreds of small businesses, many of which have called the area home for decades. This would include Steve Marshall, a 71-year-old retired electrician and musician who lives and works out of his studio on 30th street.

“I moved into my building in 1975 when Tommy Ramone and Steve Gadd lived here. Hundreds of musicians lived on this block, and many of us are still here,” Marshall said in an interview with AN. Marshall noted that his building is where a long list of famous artists rehearsed, including Simon Kirke from Bad Company, Madonna, Billy Idol, The Rolling Stones, and even Carl Bernstein, the investigative reporter who broke the Watergate scandal. “I used to do Mick’s electrical work,” he said fondly, referring to The Rolling Stones’ lead singer.

Marshall’s tone changed from nostalgic to outraged when describing the current plans for his home. If the project goes through, Marshall’s studio would fall by way of the wrecking ball, and like many artists from his generation, he would be forced out of Manhattan. “ESD is lying when it says my neighborhood is blighted,” he said. “Now they’re using bureaucracy and intimidation to move us out. Imagine someone knocking on your door and telling you that they’re going to kick you out to make billions.”

“ESD has totally misrepresented their relationship with the community,” Marshall continued. “And when Governor Hochul goes on air and says, ‘the community wants this project’—I want to know which community she’s talking about, because it’s not mine.” He was also frustrated with other civic officials, including Corey Johnson, the district’s former councilman, who went on record in 2018 saying that the plan should be sent back to the drawing board in a letter he penned with various other state representatives like Brad Hoylman, Carolyn Maloney, and Jerry Nadler. But after stepping down from public office in December 2021, Johnson started a lobbying group, CoJo Strategies, that has since been hired as an advisor to Vornado on the project. This is ironic given Johnson’s statement to voters from 2019 that “New Yorkers are fed up with our pay-to-play political system. They know that real estate developers and lobbyists have had too much sway for too long.”

Solutions and Showdowns

Beyond the real estate scandal, there is widespread consensus that Penn Station needs serious improvement. One solution advanced by RethinkNYC advocates for the relocation of Madison Square Garden (MSG), as this step is critical prior to establishing through-running service to connect Long Island Railroad, Metro-North Railroad, and New Jersey Transit into an integrated regional transit system, much like what London and Paris have today. Moreover, implementing full through-running service at Penn Station would negate the need to build a new terminal hub to service Gateway Program’s new rail tunnel, an elegant strategy that would both prevent the needless demolition of the blocks surrounding Penn Station and unlock the opportunity to build thousands of much needed new homes by increasing the frequency of service at commuter stations throughout the region, thereby opening up suburban communities to higher-density development.

Today, the city faces the consequences of decisions made decades ago when it teetered on the verge of bankruptcy. One hurdle for the above improvement would be convincing James Dolan, owner of the New York Knicks, to relocate MSG. The Dolan family hasn’t paid property taxes on MSG since 1982, when Mayor Ed Koch struck a deal in order to prevent the franchise from moving to New Jersey, an arrangement that will continue in perpetuity. It seems likely that the Dolans will keep MSG at its current location (tax free) until another offer appears.

There is no shortage of workable visions for Penn Station’s future, but the State is advancing one that happens to benefit an individual who has financially supported recent governors. Can New York activists lean into the city’s long, proud history of resistance and make a difference? It’s too soon to tell, but history has shown New Yorkers don’t go down without a fight.

Dan Jonas-Roche is a lecturer at Kean University School of Public Architecture where he teaches about ethics, ecology, and infrastructure. Previously, he was an editor at RethinkNYC.