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No taxpayer money is going to the private developers slated to helm proposed skyscrapers around Penn Station, state officials claimed in a letter obtained by The Post — even as they prepare to negotiate secretive tax breaks with Vornado Realty Trust and other property owners.
“There will be no public dollars provided to Vornado or any private developer as part of the proposed project,” the head of the state’s economic development agency wrote in a March 29 letter to state senators.
But the letter also said the state plans to negotiate site-by-site “PILOT” agreements for each of the eight skyscrapers along similar lines to the huge tax breaks the city gave the developers of Hudson Yards.
“We anticipate PILOT paid by the developments in the [Penn Station] area to be commensurate with PILOT or property taxes paid by similarly situated properties in Midtown West,” the letter from Empire State Development President Hope Knight said.
Knight’s letter was sent in response to a March 9 letter from Krueger and colleagues that called on ESD to halt the project — which would fund station renovations using taxes on 10 new office towers — because of a lack of clarity about funding details.
“Vital information about the proposed Penn Station deal has still not been provided to taxpayers and the lawmakers elected to ensure their dollars are spent wisely and their city is developed smartly,” the senators wrote.
The Midtown West proposed during the Giuliani administration eventually became Hudson Yards, whose developers brought in more than $1.4 billion worth of tax breaks in the form of PILOTs.
“It’s disingenuous to say there’s no public dollars, because implicit in PILOTs are often tax breaks. That’s how they’ve been structured in every other area,” said Rachael Fauss of the government watchdog Reinvent Albany. “That money would otherwise be going to fund city services.”
Hochul inherited the effort from Cuomo. In November, she said the state had reduced the size of the towers by 7 percent — but did not walk back Cuomo’s plan to side-step the city’s zoning process to seize and destroy privately owned buildings.
The renovation of Penn will cost around $7 billion, according to ESD’s letter.
Layla Law-Gisiko, the local land use chair and a candidate for state assembly, said the state should unlink the train station and skyscrapers — and has the luxury to do so thanks to an incoming infusion of money from President Biden’s bipartisan infrastructure bill.
MTA officials said last week they are seeking to fund up to 80 percent of the station renovation with federal grants intended for Amtrak’s Northeast Corridor, of which Penn Station is the largest hub.
“There is $35 billion through a grant program that would be allocated by FRA, specifically earmarked for the Northeast Corridor,” Law-Gisiko said. “There is still reluctance from key players to actually admit that the feds are coming to the rescue.”
Krueger declined to comment. A spokesman for Vornado Realty Trust said in a statement that the letter “is consistent with our conversation with the State.”
ESD did not immediately provide a comment.
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