We hate to say we told you so — but only because we weren't the only ones who told you so.
Yesterday's big story was the announcement by Steve Roth of the cash-strapped real estate giant Vornado that its plans to develop skyscrapers around Penn Station had been put on hold for a while.
On a Vornado earnings call on Wednesday, Roth deadpanned, “The headwinds in the current environment are not at all conducive to…development,” as Crain's reported. When investors followed up and asked if Roth had a timetable for his ambitious plans for the area around Penn Station, Roth added (according to the transcript), “That’s not something we’re going to get into now.”
And poof! There goes the money that Vornado was supposedly going to be paying — in the form of payments to the state instead of regular property taxes — to help fund part (and never a big enough part, as Reinvent Albany has long pointed out) of the renovation of Penn Station. Also on hold are the streetscape and public space improvements that Gov. Hochul also promised.
The whole thing has been a bit of a shell game from the start: Hochul (and Cuomo before her) believed that higher rents in the neighborhood after Vornado and other developers built out 18 million square feet of office and residential space around Penn Station would pay to rebuild the nation’s busiest commuter hub.
Problem is, as our own Dave Colon pointed out earlier this year, no one knew exactly how much the state would reap from those "payments in lieu of taxes," which was kind of a big deal since New York State has been very adamant that the PILOTs will cover so much of the cost of the new Penn Station that the state will not have to raise taxes and the MTA won’t have to raise transit fares.
The PILOT funds were also supposed to cover all the public realm improvements, which are apparently now also on hold until Steve Roth builds or sells to someone who will build.
Which brings us back to the headwinds. Reinvent Albany and others have long said that Midtown doesn't need the amount of office space that Roth had been discussing, certainly not now (headwinds!), but perhaps not even in the future, if work-from-home remains a thing.
"The earnings call today confirms the emperor has no clothes and Vornado won’t contribute a dime to the renovation of Penn Station," John Kaehny, the executive director of Reinvent Albany told our editor in a call on Wednesday. "This was a Cuomo-era plan that was created through donations from the contributor class and support from the buildings trades unions, who support any kind of building. The call rips off any fig leaf that this Vornado thing was about funding Penn Station and reveals a straight-up subsidy for Vornado that’s now become a planning disaster."
The Hochul administration said it is staying the course and the Penn Station plan is moving ahead. “Quarterly conditions may fluctuate, but Gov. Hochul’s commitment to revitalizing Penn Station and the area surrounding will not,” a spokesperson for Empire State Development told Crain’s. “We have always said that this was a long-term project — to be built out over more than a decade — designed to withstand temporary market adjustments.”
Other outlets covered (though not that many, frankly):
- The Post played up the fact that this is happening on Hochul's watch.
- Commercial Observer played it straight, but like everyone else, really has no answer for where the state is going to get the $4.1 billion it hoped to get from the Vornado plan.
In other news from a super-slow day:
- Patch covered the Park Slope pedestrian badly injured in a crash on Tuesday, but without the required depth that we provided about what a bloody year this is.
- The Times uncovered more Adams administration corruption.
- The City's FAQ podcast looked into Lee Zeldin's hate-hate relationship with the New York City subway.
- Could Chamber Street get a protected bike lane to fill the gap between the Brooklyn Bridge bike path and the Hudson River Greenway? Community Board 1 hopes so:
- The City covered Council Member Lincoln Restler's tree-mendous plan to bring greenery to his Williamsburg district, which has very little tree cover.
- Hat tip to this downtown citizen who hoisted the NYPD on its own petard:
- Speaking of cops, here's what it's like to live on a precinct block:
