For developers, buying and bulldozing properties to build something better takes cunning, creativity and cash. Gary Barnett is adept at it, and he has lots of company. Al Laboz, for example, has been assembling a Downtown Brooklyn site since 1996.
Politicians don’t have that kind of patience; their next election is never more than a few years away. The government, however, can use eminent domain to purchase properties for fair market value even if the owners don’t want to sell.
That makes the story of Block 780, across West 31st Street from Penn Station, quite interesting.
When the Cuomo administration in 2019 planned to buy it to build a train terminal with tracks below, I had The Real Deal’s research desk create a spreadsheet about the properties. The idea was to write a David-versus-Goliath feature about old-school building owners battling a powerful governor.
I should have known better. Today, the terminal project is further away than ever. At Penn Station, news about dreamy projects has always outpaced news about actual ones.
Because there’s no new terminal, a Gothamist piece noted this week, the $16 billion being spent to build two rail tunnels from New Jersey to the transit hub won’t expand service. There is simply no space at Penn to park more trains.
Gothamist’s angle is new, but insiders have long understood this sobering reality. Way back in 2021, Gov. Kathy Hochul shelved her deposed predecessor Andrew Cuomo’s plan for the new terminal.
Acquiring the block’s commercial buildings would cost north of $1 billion and require the use — or at least the threat — of eminent domain. That would take years, and Hochul couldn’t wait that long.
Her decision spared Block 780 for the indefinite future.
But indefinite is not forever. All the transit agencies involved remain hopeful that a Penn Station extension will eventually be built, allowing the new and old tunnels to be used to their full potential. That has not been lost on the owners of Block 780, who have been lying low but keeping their lawyers’ numbers handy.
Meanwhile, a hardy group of transit activists and urbanists has been anything but quiet. They have been fighting the prospect of a Penn South terminal for years, in part to save the West 31st Street buildings but more to promote an alternative: making Penn a “through running” station. If trains from New Jersey could continue to Queens and Long Island, and vice versa, a new terminal would not be needed.
Penn Station owner Amtrak, the MTA, New Jersey Transit and the last two governors have never warmed up to that idea. Hochul only put Penn South on ice because, up for election in 2022, she wanted quicker improvements on the ghastly existing station.
Another issue arose: The environment for office development, already cooled by remote work, froze up when interest rates started rising in 2022. That undercut plans for Vornado Realty Trust and other private firms to build 10 Penn District towers that would generate payments in lieu of taxes to help pay for a new terminal.
Despite these hiccups, the flattening of Block 780 for a south terminal might yet happen. The extended pause has bought time for through-running advocates to build support for their idea, which they have been doing with events, policy papers and press releases. A recent one unveiled a new design by Alexandros Washburn to move Madison Square Garden and create a gorgeous green space.
Former Silverstein Properties executive Janno Lieber, who now runs the MTA, has been trying to stop the activists in their tracks. And now their old foe, Cuomo, is poised to return as mayor. He wouldn’t have the pull he had as governor, but could still give the terminal project a boost.
Or maybe he would opt to torment Hochul by changing sides and becoming a proponent of through-running — a far more elegant solution than reducing Block 780 to rubble.
Crazier things have happened.