Opponents of Penn Station Plan Urge ESD to Pause Plan in Light of Vornado's Downgraded Default Rating

NEW YORK, NY (07/07/2022) (readMedia)-- Trains Before Towers – a new initiative supported by community residents, housing and transit advocates, and local business owners – urged Empire State Development (ESD) to pause the controversial plan to authorize 10 huge towers and 18 million square feet - largely to be built by Vornado Realty Trust - around Penn Station later this month in light of news that Fitch Ratings has downgraded Vornado from "BBB" to "BBB-." According to Fitch Ratings, Vornado's portfolio "has faced challenges since the onset of the pandemic and its impact on New York property market fundamentals, including higher vacancy rates."

"This secretive, shoddy plan to redevelop Penn Station is a runaway train that must be stopped. Last month, lawmakers probed ESD for answers to questions that elected officials, advocates and experts have been raising for months – and those questions were left unanswered. Now, Vornado, the primary developer of this plan to upgrade Penn, has had its financial outlook downgraded yet again, and the ratings outlook remains negative. The State is gambling with our tax dollars, transit system and the future of Penn by relying solely on a developer with a deteriorating rating that is approaching junk bond status. ESD cannot in good conscience vote on this plan in the coming weeks in light of this news – we urge that the plan is paused until another developer with stronger financials is located. The current plan will simply enrich a billionaire mega-donor at the expense of desperately needed transit improvements," said Diana Gonzalez, campaign manager of Trains Before Towers.

The plan, which would usurp City land use authority, would enrich billionaire developer Steve Roth of Vornado without any guarantees the scheme would adequately fund transit improvements at Penn Station. Roth is also a major donor to Gov. Kathy Hochul's campaign.

Despite serious and unanswered concerns raised by New York City's Independent Budget Office, the New York City Planning Commission and nearly every State Senator representing the five boroughs, ESD is also planning a final vote on the plan in a matter of weeks.

Last month, the City's Independent Budget Office released a report, raising serious questions about the financial viability of the project and whether there were enough details to gauge the plan's impact. The IBO report also concluded that while the State would collect payments from Vornado, the City would lose out on property tax revenue that it would have earned in a standard rezoning process. A majority of the city's Senate delegation have voiced opposition to the plan. The Senators specifically voiced concerns about how much Vornado will receive in subsidies and other State-sponsored benefits as part of the plan and how much the City stands to lose in property taxes, urging ESD to halt the plan until there are "??explanations provided and agreements made associated with the cost, design, scope, bond liabilities, and other aspects of the project that remain unknown." Good government groups including Common Cause, Reinvent Albany, BetaNYC, League of Women Voters and NYPIRG have also voiced opposition to the plan.

About Trains Before Towers

TBT is a coalition of community organizations, transit advocacy groups, preservation organizations, affordable housing advocacy groups, and good government organizations dedicated to improving the transit infrastructure at Penn Station.