Not So Fast: Trump Admin Says It’s Not Footing Entire Cost to Renovate Penn Station

When the Trump administration seized control of plans to renovate Penn Station, Gov. Hochul said New Yorkers had won a major victory. “I want to thank the President and [Transportation ] Secretary Duffy for taking on the sole responsibility to deliver the beautiful new $7-billion station that New Yorkers deserve,” she said.

Her enthusiasm, not surprisingly, spread rapidly to Manhattan politicians who quickly offered up alternative ideas for how to spend the $1.3 billion in state funds that, as the governor said, “would have otherwise been necessary for this project.”

Not so fast.

Trump administration officials say there is no promise to pick up the full tab.

“The answer is no,” said Warren Flatau, a spokesman for the Federal Railroad Administration, a part of the US Department of Transportation. “FRA/DOT never committed to pay the full cost of Penn Station’s renovation.”

Flatau said the FRA is only committed to a project development grant it announced this month to Amtrak for preliminary engineering and environmental review of plans for reconstruction and possible expansion of the station.

That grant got more attention than your typical preliminary engineering grant because it involved rescinding a grant to the MTA, which up to then had been in charge of renovations, and turned the entire effort over to Amtrak, under the supervision of the FRA.

“We recommend that you go back to the governor and State for additional clarification,” Flatau said.

In offering that “clarification,” state officials suggested, in effect, that the governor’s response to the Trump administration should be taken seriously but perhaps not literally, to borrow a phrase once used to describe statements by Donald Trump.

The governor, one state official said, was drawing a line in the sand. If the federal government wanted total control of the station renovation, then they should take total financial responsibility, the official suggested.

In other words, it was up to the Trump administration to explain how they planned to pay for any renovation.

”As we noted in our press release,” an FRA spokesman said, “we will provide funding for the preliminary work, but the ultimate goal is to create a public private partnership managed by DOT and Amtrak that solicits bids for the best possible plan. This is a far more efficient process for the taxpayers and the people of New York City.”

More efficient means “public private partnership will undertake the reconstruction more speedily and ably,” the spokesman said.

A few hours after the Trump administration shared its statement, Hochul doubled down on her description of the takeover as a victory that would save New Yorkers money. She even said she’d entertain calling the rebuilt facility Trump Station.

“It would not be my favorite thing to call it, but it will save us $1.3 billion that I’m not planning to spend that can help me manage other costs,” the governor said. She said that she was already working to reallocate the $1.3 billion to, among other things, programs to combat fare evasion.

“Thank you for taking over this,” the governor said, the sarcasm beginning to break through. “I expect to see immediate progress, given how efficiency is so important to you. Elon Musk could be in charge of it and get it done really fast, and I look forward to seeing that.”

This may be more than yet another twist in the ongoing feud between New York and Transportation Secretary Duffy, who has criticized the safety of the subways, sought to undo congestion pricing, and attacked the competency of the MTA, whose Long Island Railroad is the station’s largest tenant.

The idea that the state’s $1.3-billion share of the renovation costs, first committed in 2023, was no longer needed for the renovation has been repeated in recent days by both Janno Lieber, the MTA chair, and by three Manhattan lawmakers who said they had a new idea for the money.

“Following the announcement that the federal government will assume sole responsibility for the redevelopment of Penn Station,” Assembly Member Tony Simone, State Senator Brad Hoylman-Sigal, and Council Member Eric Bottcher are urging Governor Hochul to reallocate the state’s $1.3-billion commitment toward enhancing the surrounding Penn neighborhood, said an announcement from the trio.

Simone noted that he had recently unveiled a plan to build more housing in the neighborhood and a park across Seventh Avenue from the station, on the site of the old Pennsylvania Hotel, torn down by its owner, Vornado Realty Trust, which wants to build a supertall office tower there.

“With the federal government picking up the tab for Penn Station, Gov. Hochul has affirmed that $1.3 [billion] in previously allocated state funds for the Penn Area is now fully free to use outside the station redevelopment,” said Assembly Member Simone. “We now have the funding to meet the vision I unveiled last month to build thousands of units of desperately needed affordable housing, improve public safety, deliver new green space by building a grand new park, and make the Penn neighborhood a vibrant 24/7 live, work, play community.”

Asked about the idea of reallocating state money the federal government had not yet said it did not need, Simone’s spokesman, Jacob Golden, noted that the Trump administration had announced that they planned to finance the renovation of the station through what is known as a P3, a public-private partnership.

In these partnerships, which have been used for major infrastructure projects including the rebuilding of LaGuardia Airport, a private developer is brought in to finance and build the project and is repaid over many years, often from revenue generated by the project.

ASTM North America has already proposed such a partnership for Penn Station.

But while this changes the financial calculus, the long-term repayment still has to come from somewhere. The Trump administration has yet to say how those payments would be financed or whether it would expect New York to pay a share.

In his announcement, Duffy focused heavily on holding down the cost of the project to save taxpayers money. So, it is not clear if he even embraces the $7-billion cost estimate for renovation. The previously separate, but now combined, expansion would cost billions more.

Before the feds took control of the project, the MTA had ratcheted back its renovation plans and was focusing heavily on improving access to the platforms and on improving ventilation systems, both important safety issues.

“It doesn’t have to be an entire rebuild to the station,” Lieber said on the Brian Lehrer show. “You could get something significant done in the short term. And you know, if that’s what they want to do, we’re all ears. We’re ready to work with them. . . . “

A more ambitious vision, however, has been offered by a group funded by a major Trump supporter, Thomas Klingenstein. He has underwritten a $3-million architectural process that produced a plan to move Madison Square Garden to the now-vacant site of the Pennsylvania Hotel and build a park and a train hall where the Garden had been.

That plan, from the Grand Penn Alliance, would also cost the same $7 billion, its chief architect, Alexandros Washburn has said. Although the Garden, owned by James Dolan, has not agreed to move, nor has Vornado agreed to put it on the site of its former hotel.