Developer ASTM North America made headlines on Wednesday when it unveiled its innovative and ambitious $6 billion proposal to transform Penn Station. While the plan has faced some criticism for potentially benefiting Madison Square Garden owner James Dolan, it offers a compelling alternative to the state’s $7 billion rehabilitation plan. This week, Governor Kathy Hochul welcomed outside bids for the project, signaling a fresh start and a departure from the troubled project to construct new office towers at the site.
ASTM’s proposal envisions a revitalized Penn Station that retains Madison Square Garden within a sleek new stone exterior structure. The construction process, pending state approval, could be completed in under six years. The renovated station would include two main train halls, a striking mid-block building wrapped in glass, a well-lit passenger concourse, and improved ceiling heights to enhance the overall passenger experience.
“Our vision is to restore Penn Station to its former glory as a truly iconic transit hub deserving of its status in New York City. With a grand entrance on Eighth Avenue, increased light, space, accessibility, and efficiency, we aim to create an extraordinary transportation hub,” said ASTM North America’s Senior Vice President, Peter Cipriano.
The proposal also calls for the removal of the Hulu Theater to make way for a new entrance on Eighth Avenue. This move has drawn criticism from the MTA, but officials argue that it will create a new train hall for commuters, optimize pedestrian traffic flow, and address vital improvements needed at the loading dock.
Critics, including MTA officials, have taken issue with ASTM’s plan to acquire Hulu Theater from Dolan, claiming it would amount to a $1 billion bailout for Madison Square Garden. Cipriano refutes these claims, stating that the total acquisition cost for the entire project would be less than $500 million. He dismisses the notion that this would unfairly benefit Dolan and emphasizes that no deal has been finalized.
Despite some miscommunication, ASTM maintains that the MTA has neglected to review their plans. However, an MTA spokesperson disputes this, stating that agency officials did meet with the ASTM team earlier in the year but requested additional documentation that they are yet to receive.
The estimated cost of ASTM’s project is $6 billion, with the firm taking responsibility for construction, design, property acquisitions, and long-term asset management. To acquire the necessary property, ASTM plans to invest $1 billion in upfront equity. An additional $2 billion would come from public funding, including a projected $1.5 billion Federal Railroad Administration grant and $500 million from New York’s existing appropriations budget. The remaining $3 billion would be secured through loans from the Department of Transportation.
Once the construction is completed, ASTM plans to remain involved in the operations and maintenance of the revamped Penn Station for a 50-year term. In return, they would receive annual payments from Amtrak, the Long Island Rail Road, and New Jersey Transit, totaling approximately $250 million. These payments would cover maintenance costs, contingent on the station’s financial performance.
Earlier this month, the MTA released a report revealing that Penn Station and Madison Square Garden were no longer compatible. This underscores the urgent need for a transformative project like ASTM’s proposal, which promises to be a game-changer not only for Penn Station but for the entire neighborhood.
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