Amtrak’s Byford Still Searching for Funding on Penn Station Rebuild

Amtrak’s man in charge of rebuilding Penn Station stepped on a local political landmine by asking New Yorkers to be “open minded” about letting Amtrak collect payments from neighborhood developers to help fund the project.

The federal official, Andy Byford, spoke to a Crain’s New York breakfast of business leaders about the challenge of funding the $7 to $8 billion to rebuild the station and expand its capacity.

“If we’re not careful, ladies and gentlemen, we will fall into the same trap we’ve fallen into for the past 40 years, and another opportunity will be lost,” Byford said. “So, let’s at least be open-minded about this and look at opportunities and have the discussion to make sure there’s safeguards.”

But local elected officials made it instantly clear they were not open to the idea, endorsed by the Trump administration and now pending in the Senate, to give Amtrak authority here and across the country to divert local property taxes to funding redevelopment of its facilities.

“In plain English: a federally controlled entity operating under Trump’s direction could gain the power to reshape land use around Penn Station while exempting itself from New York’s laws, weakening our tax base, and bypassing our communities,” said the neighborhood’s representative, Jerrold Nadler. “Not temporarily. Permanently.”

His comment came in a joint statement from six Manhattan elected officials, all Democrats. In addition to Nadler, they are: State Senator’s Liz Kreuger and Erik Bottcher; Assembly member Tony Simone; Manhattan Borough President Brad Hoylman-Sigal and Council Member Carl Wilson.

The officials made clear that their objection was not to diverting property taxes to the project, an idea first proffered by then Governor Andrew Cuomo, but to letting the Trump administration do the diverting.

“Value capture can be used effectively with proper safeguards under a state GPP,” said a spokesman for Simone, using the acronym for the General Project Plan originally drawn up by Cuomo. “Assemblymember Simone has supported amending the old Cuomo GPP which would capture new revenue for improvements to the area.”

An obvious source of such revenue is the 1,000 foot tower Vornado Realty wants to build across Seventh Avenue on the site of the old Pennsylvania Hotel.

Byford said he is pressing the Trump administration to pay for most of the Penn Station project. But even if he collected 80 percent from the federal government, a goal he once set, that would still leave a hole of more than a billion dollars.

Byford said he was currently negotiating with the consortium that won the contest to be Amtrak’s private partner in rebuilding the station. Those talks will produce a more detailed plan and an exact price tag by next spring. Byford said he would then go to the Federal Government for as much of that price tag as possible.

Speaking after the breakfast, Byford said he was not counting on the revenue from development around the station in putting his plan together, but was determined not to impose added costs on riders of Amtrak or the two commuter railroads who are the stations tenants, NJTransit and the Long Island Railroad.

When a reporter asked why he didn’t just ask Governor Hochul to divert city property taxes through the old GPP, which is still on the books, Byford replied: “Time will tell. The governor has made it very clear that New York State is not contributing any money to this. They expect this to be a fully federally funded project. I respect her position on that. As a public servant I’m just trying to get this station built and trying, somehow, to find the money to do that. That’s all.”

The state had originally allocated more than $1Billion to rebuilding the station, but after the Trump administration took control of the project from the MTA, a state agency, Hochul withdrew the money and said she would spend it instead on the Interborough Rail link connecting Brooklyn and Queens.

The chair of the MTA, Janno Lieber, has criticized the Penn project as overly expensive and misshapen, and refused to sign an agreement, accepted by New Jersey Transit, to partner with Amtrak on the project.

At the breakfast Byford suggested the relationship with the MTA was improving. He said governor Hochul had been mediating between Amtrak and the MTA and an agreement was at hand.

But officials said the agreement was not a replica of the NJ Transit deal. Rather, it was “technical” to allow Amtrak and its private partner into the LIRR portion of the station to gather information necessary for the project.

“The MTA has made clear it won’t give up rights under the existing long-term Lease and won’t put New York taxpayers on the hook for the project,” said Mitch Schwartz, the MTA’s Senior Advisor for Policy and External Relations. “We are happy to work with partners to build on our improvements at Penn, but existing protections for our riders aren’t going anywhere.”

The Trump administration has said it wants construction underway by the end of next year, with completion by 2034.