Vornado Unveils New Rendering for Tower Across from Penn Station

Vornado Realty Trust, the largest property owner around Penn Station, has cut both the height and mass of the luxury office tower it has for years wanted to build across Seventh Avenue from the station.

The change appears to be an effort to fit the project into the resurgent, but still challenging, market for office space in New York City.

The companies pitch documents make clear that it believes the value of the supertall office tower is enhanced by improvements, both completed and envisioned, of Penn Station. Yet at the same time the company makes no mention of two widely discussed links:

*That the office tower will include a rebuilt “Gimbels passageway” between Penn Station and Herald Square.

*That property tax payments could be diverted to help pay for the multi-billion dollar transformation of the station that Amtrak, the owner, is now pursuing.

Neither of those will happen, of course, if Vornado does not build the tower, which it originally won approval for in 2010. That version would have been 67 or 68 stories and about 1200 feet, nearly as tall as the Empire State Building, two blocks away, not counting The Empire State’s antenna.

The Vornado tower, which it calls 15 Penn, was never built, derailed by the gyrations of the New York office market, first after the 2008 crash and then Covid. As New York emerged from Covid in 2022 Vornado tore down the Pennsylvania Hotel, to make way for the new tower. But there has been no visible progress since, other than some billboards on the site.

Now Vornado has circulated a revised version, 52 stories and 1,050 feet in height. It would be the fifteenth tallest building in the city, four feet taller than the Chrysler building.

Vornado has offered no explanation for scaling back the tower. But it does still need two things to get work underway: lower interest rates and an anchor tenant that would lease all or most of the space and thus guarantee the financing of the construction.

While several new office towers have risen on the east side, Vornado is still wooing potential tenants to its new tower with visions of the improving Penn District, as it calls the neighborhood around Penn Station.

Vornado describes the tower as a “Global Headquarters Opportunity” that “will become the new standard for office design in New York City.” The architect is Foster + Partners.

The location, Vornado says, is “the epicenter of New York City.” Part of the pitch is improvements already made to the Amtrak and Long Island Railroad portions of Penn Station, although the plan to transform the entire station is not directly mentioned even though Vornado is a partner in the consortium that won the competition to be Amtrak’s partner in redeveloping the station.

What is mentioned is the work already under way to connect the MTA’s Metro North Service from the prosperous northern suburbs in Westchester and Connecticut, as well as the East Bronx, to Penn Station. Vornado notes that 102 New Haven line commuter trains will arrive in Penn Station everyday starting next year.

Next year is also when the Trump administration has promised to have “shovels in the ground” on the dramatic rebuilding of the entire station. The executive in charge of the project, Andy Byford, has said he is focused right now on financing the project.

He has said 80 percent of this should come from the federal government. But there has also been discussion of developers around the station making payments in lieu of property taxes – so called PILOTS – to help fund the project. Vornado’s would be one of those developers, if not the principal developer, to make such payments.

The Trump administration has proposed giving Amtrak the power to collect such payments. Legislation to do that is currently pending in the U.S. Senate.

The state of New York already has the power to do this, and then- Governor Andrew Cuomo had proposed a major development scheme to build up to 10 new office towers around Penn Station and collect revenue from them to finance the station. Vornado’s 15 Penn was one of those towers.

Governor Kathy Hochul has said President Trump, who took over the rebuilding of the station, should now pay for it. But her ability under her predecessor’s plan to collect revenue from Vornado or other developers remains a bargaining chip she can use.