New York Auctions Vornado on Penn Project

Steve Roth and Governor Kathy Hochul of Vornado with Penn Station plans (Getty, FXCollaborative)

The Penn Station megadevelopment was hit by another lawsuit on Wednesday alleging that Vornado Real Estate Trust unduly influenced the project and that the state circumvented environmental regulations to advance it.

Community groups and tenants living in buildings slated for demolition accuse Empire State Development of failing to answer basic questions about how the development of 10 new commercial towers will fund the renovation and expansion of the station.

The lawsuit asks the court to overturn the state agency’s approval of the project’s master plan and final environmental impact statement, calling the decisions “arbitrary and capricious” and an “abuse of power”.

The development is expected to result in 18 million square feet of new retail space and at least 1,172 apartments near Penn Station. Officials said revenue generated from the projects will help pay for the station’s revamp and expansion to the south.

But the lawsuit criticizes the separation of the project’s overall plan, which covers commercial towers, from the larger vision for the Penn District, saying examining the impacts of each in isolation violates the City Review Act. state environmental quality.

The lawsuit, filed by the Penn Community Defense Fund, ReThink NYC, the City Club of New York and residents of 251 West 30th Street, a 16-story building that would be demolished as part of the overall plan for the project, also targets Vornado.

Steven Roth’s real estate investment trust controls five of the eight development sites and will likely develop the towers on those plots. The lawsuit accuses state officials of drawing inspiration from Vornado while shaping the project’s overall plan. He notes that Vornado and the state split bills for various consultants on the project.

“It was not a government action; it was a joint venture between a state agency and the chosen private company that would – extravagantly – benefit from the plan,” says the lawsuit, filed Wednesday by attorney Charles Weinstock. “Nobody has to win anymore [plan] than Vornado. In fact, Vornado may be the only developer to win.

A court case filed in September by the same lawyer alleges that the state was “zealous to conceal the pivotal role played by Vornado Realty Trust” in the project. This complaint seeks documents detailing the REIT’s involvement.

In July, the State Public Authorities Control Council approved a city and state plan to partially pay for the renovation and expansion of Penn Station. State officials estimate that payments in lieu of taxes, or PILOTS, from private developments could generate up to $3.75 billion.

It’s unclear how the state will pay the estimated $3.25 billion share of New York’s bill. The state has not yet entered into individual PILOT agreements with owners.

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