Trump Admin Wants to Divert Property Taxes and Seeks New Name for Penn Station

The Trump administration for the first time publicly said it wants to divert New York City property taxes from development projects around Penn Station to help pay for its $8 billion plan to transform the station into a world-class rail hub.

The feds would then like to rename the station, but they won’t say for whom!

Both thoughts are contained in a letter from the US Secretary of Transportation, Sean Duffy, to the Republican chairs and ranking Democrats on the Senate Committees with jurisdiction over transportation and infrastructure.

“New York Penn Station will be rebuilt into a brand-new, world-class station,” Duffy told the Senators.

He asked them to help by authorizing “an additional $1 billion” for design and construction work on the new station. Additionally, he asked the Senators to incorporate into transportation legislation an amendment that would give Amtrak authority to collect what are known as PILOTS, payments in lieu of taxes, from development projects around Amtrak stations.

This amendment was approved in committee recently over the lone objection of Representative Jerrold Nadler, Democrat of the West Side, who has launched a campaign to stop the Trump administration from proceeding with the rebuilding of the station.

“Now, after months of hiding from the public, Sean Duffy has confirmed that the Trump administration is waging a hostile takeover of Penn Station, including delivering Trump his dream of renaming Penn Station after himself,” Nadler said. “I strongly oppose this ridiculous proposal and am once again demanding answers on the funding.”

Straus News reported last May that, as part of their effort to identify the needed $8 billion, Trump administration officials were saying they planned to use payments from real estate development around Penn Station to help fund the rebuilding of the station itself.

But at the time no official put their name to the plan nor did they identify specific development projects, although sources said the prime focus was on a luxury office tower Vornado Realty wants to build across Seventh Avenue, on the site of the Pennsylvania Hotel, which Vornado tore down.

Vornado, the largest property owner in the neighborhood, is a part of Penn Transformation Partners, the consortium that won the competition to be Amtrak’s private partner in redeveloping the station.

“Since the very beginning of the Penn Station renovation project,” Nadler said, “I and other New York elected officials, community advocates, and local residents have called on the Trump administration to provide transparency on the process and funding. As the only member of the Transportation and Infrastructure Committee from New York City, I have repeatedly warned that the Trump administration is weaponizing the Surface Transportation Reauthorization to strip control of Penn Station away from local authorities at New Yorkers’ expense.

Nadler added: “This will be one of the most expensive projects in the country, yet the administration still has not disclosed how it will be funded or who will pay the bill. New York taxpayers and transit riders must not be forced to foot the bill for a Trump vanity project.”

An Amtrak spokesperson in New York referred all questions to Secretary Duffy’s press office, which did not respond.

The concept of diverting local property taxes to rebuilding Penn Station was original proposed by then Governor Andrew Cuomo, who drew up a plan, known as the GPP, to build as many as ten office towers and devote payments from them in lieu of taxes to Penn Station.

The Vornado tower on the Penn Hotel site was one of the new buildings in the GPP.

That plan is still officially on the books, although it stalled in large part because of the Covid induced real estate crash. In any case, the Trump Administration seized control of the Penn Station project from New York State last year.

Vornado in the meantime has signaled that, with the high end of the office market booming again, it now wants to build the office tower on the Pennsylvania Hotel site.

Pennsylvania Station was named for the now defunct Pennsylvania Railroad, which built the station to go with the spanking new tunnels it burrowed under the Hudson River in 1910 so its passengers would not have to get off in New Jersey and take a ferry boat to New York City.

Trump administration officials have hinted several times that the remade station should be named for Trump. Duffy said last year he liked the sound of that. But in his letter, Duffy specifically asked the Senators to “direct Amtrak to rename New York Penn Station.” He just did not say for whom.