Art of the Steal: Congress Sets the Stage For Trump Land Grab To Fund Penn Station

It’s the Great Train Station Robbery.

Congress is laying the track for Amtrak to pay for its cosmetic upgrades to Penn Station by seizing city property tax revenues to allow a Trump-connected local developer to build at a discount around the president’s proposed marble and gold filigreed train hall.

A U.S. House committee last week passed an amendment to the five-year national surface transportation reauthorization bill — known as the Build America 250 Act — to let Amtrak and any “partners” on station redevelopment projects across the country override local zoning laws and siphon off local tax revenues to pay for upgrades at hubs like Penn Station.

First reported by the Daily News, the legislation put forward by U.S. Rep. Addison McDowell (R-North Carolina) would allow Amtrak to “own, lease, license, develop, ground-lease, or enter into joint development public-private partnership arrangements” on land that’s “located on or adjacent to intercity passenger rail stations or other facilities” in order to fund upgrades to the stations.

In plain English, the legislation would let Amtrak leverage the properties around its transit hubs for improvements — without any say from local governments.

McDowell framed the amendment a fiscally conservative way to support transit without spending taxpayer money when he introduced it at a May 21 hearing.

“Amtrak can receive contractual payments from developers, this allows Amtrak to retain the revenues created from the increased value of the developed property and then pour that money back into capital improvements, maintenance, and related passenger facilities,” the North Carolina Republican claimed. “This amendment does not raise federal taxes. It does not require new mandatory spending.”

Federal taxes may not fund upgrades under the amendment, but city and state taxes would: McDowell’s legislation exempts developers from paying any local taxes, including even sales taxes, effectively hollowing out local coffers to fund federal projects.

In New York City, the amendment would let Vornado — the major Midtown property owner recently selected by Amtrak as part of a consortium to redevelop Penn Station — build around the station, avoid paying city property taxes and instead send Amtrak “payments in lieu of taxes” to finance the reported $8 billion project to remodel the train station.

“Because it’s on the Halmar team, any agreement Amtrak makes with that team with Vornado as the partner, Vornado as developer would have unlimited ability to do whatever they want, completely counter to what city zoning laws are, if Amtrak says it’s okay,” said Reinvent Albany Senior Policy Advisor Rachael Fauss.

The amendment — which has yet to become law — would create a situation similar to the how former Gov. Andrew Cuomo and Gov. Hochul had planned to fund a new Penn Station when New York state and the MTA were still in charge of the effort.

Cuomo and Hochul initiated a land-use action called a “General Project Plan” that took zoning powers for the area away from the city and gave them to the state, which planned to use Vornado’s payments in lieu of taxes to fund the station rebuild.

Hochul kiboshed the plan after she won re-election in 2022. Even then, the state scheme still had safeguards that made it more accountable to public scrutiny. For example, the General Project Plan required that each parcel of land developed around Penn be approved by the state’s Public Authority Control Board.

The powers that Congress wants to give Amtrak would preclude even that level of oversight.

As with the original Cuomo/Hochul plan, Amtrak would have to give the city payments to substitute property tax revenue used to fund the station. But those substitute payments would be based on current tax revenues, and would not account for the money the city would have to spend to provide services like trash and sewage for the new infrastructure, Fauss warned.

“If it’s a much larger development, if you build something twice as tall as you otherwise could, the costs for basic city services like sanitation services and water services are unaccounted for,” Fauss said. “And this assumes that New York City would never rezone that area itself, and that the taxes are static and that neighborhood would forever be that neighborhood and never change.”

Both the state and federal schemes sound good on their face, since “transit-oriented development” is a noble and important goal. But Penn Station is not a particularly good model of transit-oriented development, since it is a largely cosmetic upgrade that does not involve capacity upgrades to increase ridership to and through the area.

Transit advocates have long hoped that renovations at the station would allow the MTA and New Jersey Transit to run passenger service through Penn Station and into each other’s territory, but Amtrak’s vision appears to be limited to improving a single platform to make room for “through-running,” Gothamist reported on Monday.

“The whole thing about transit-oriented development is that it’s presuming that the development will occur because transit access is being improved so much,” Fauss explained. “What is the capacity changing here? Are there new people coming in? It’s not like they’re building a brand new train station, they’re just making it look nicer. If you add additional transit service, you recoup that cost. What are they doing to make service better? It doesn’t look like much.”

The Trump administration took the Penn Station project over from New York last year, but has yet to say how it plans to fund the effort.

Trump and Transportation Secretary Sean Duffy brought on the beloved former New York City Transit President Andy Byford to lead the project to give it the veneer of respectability, but Byford has refused to make public any documents or criteria for Amtrak’s selection earlier this month of the Halmar developer team that includes Vornado. (Vornado’s CEO Steven Roth is a longtime Trump confidante.)

Byford has openly suggested that New York City and New York state should chip in to the project, even though neither shows any interest in doing so. The recent maneuvers in Congress would give them no choice, Fauss said.

“Because of how broad the authority is just to rezone and take the taxes, it’s really usurping New York City’s ability to decide what to do with that area. This is not the federal government paying for this project if they fund it through this development. This is New York City paying for it,” said Fauss.

Vornado’s prime position for a windfall at New York City’s expense had retiring Rep. Jerry Nadler (D-Manhattan) fuming during last week’s hearing.

“[Penn Station’s] future should be shaped by writers, New York City, New York State and the public interest,” Nadler said. “This amendment moves in the opposite direction. It would make it easier for Amtrak to structure private development deals, fast track favorite projects for federal financing, preempt state and local taxes and override local zoning and building requirements.”