Penn Station revamp plan to cost $2B more than first claimed: records

July 2024 · 5 minute read

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One of the two major renovation plans to revamp and operate Penn Station is likely to cost $2 billion more than its supporters initially claimed, The Post has learned.

Former MTA chairman Pat Foye and his new employer, Italian transportation conglomerate ASTM, have been claiming their bid to rebuild and privatize the station will cost no more than $6 billion – but records obtained by The Post show it will come in at more than $8 billion.

The newly surfaced estimates were included in a 200-plus page engineering analysis authored by the MTA and its consultants back in 2020 — when Foye was still helming the agency — as they examined a variety of plans for rebuilding the station.

The report was finalized a year before Foye departed the MTA and ended up on ASTM’s payroll as a top executive.

ASTM and the MTA are the only two parties now vying for the lucrative contract to overhaul the Midtown Manhattan transport hub.  

Under the ASTM and MTA’s plans, both would spend $4.7 billion to tear apart the station’s warren of floors and narrow corridors and turn it into a new and easy-to-navigate structure that would consolidate all passenger-related functions on a single level.

Both the MTA and ASTM proposals would gut and rebuild Penn Station’s warren-like interior and transform it into a complex where all the passenger functions are on a single shared level with high ceilings and wide corridors.
Here’s what ASTM says the unified passenger level would look like. ASTM North America

ASTM’s pitch, however, would then build a grand new Eighth Avenue entrance by blowing out the west side of Penn Station and the Madison Square Garden’s Hulu Theater above it.

The MTA’s analysis considered a nearly identical proposal to ASTM’s plan, which found that it would cost another $1.2 billion to carry out that work, the records show.

And that’s before paying MSG’s controversial owner, James Dolan, for the land, which ASTM has publicly estimated would cost another $500 million.

The pandemic-era inflation bubble of 2020-2022 would push that $6.4 billion total up to $8.1 billion — assuming there’s not a drop of debt required to finance the proposal.

Foye and ASTM have gotten powerful Manhattan elected officials onboard with their pitch by claiming they could finance the overhaul, run the station and turn a profit by charging the MTA, Amtrak and New Jersey Transit a seemingly incidental annual fee of $250 million for 50 years.

However, the engineering docs and subsequent analysis by The Post show that would only generate $7.5 billion over three decades, meaning the operation would be deep in the red for years unless taxpayers and riders shell over larger payments.

A rendering of the grand entrance that ASTM proposes to build on the Eighth Avenue side of Penn Station. An MTA analysis prepared while now ASTM-exec Pat Foye was MTA chairman showed an Eighth Ave. entrance would cost nearly $1.2 billion. ASTM North America

“Press releases are not financial plans and are not comparable to a thorough analysis of cost completed by the MTA,” said Rachael Fauss, an MTA expert at watchdog group, Reinvent Albany. “Transit riders need more than a PowerPoint to explain how the costs are going to add up.”

“Trust us, ‘you’ll get a steal on the front end and you’ll just have to pay a bit over the years’ — it’s a gimmick,” she added. “We’re going to pay either way. What appears to be cheaper will likely cost more in the end. The amount of risk they’re asking taxpayers to take on is enormous.”

In comparison, the MTA’s plan swaps out the grand Eighth Avenue train hall proposal for a dramatic midblock entrance, which would replace the existing shuttered taxi way and require a complicated reworking of the skybridge that links MSG to a neighboring office tower.

The midblock proposal was estimated to cost approximately $750 million in 2020.

Pat Foye was a top advisor to Gov. Andrew Cuomo and served as his head of the Metropolitan Transportation Authority and the state’s economic development agency. Matthew McDermott
The MTA favors constructing a new glass-ceilinged train hall in the middle of the block between Seventh and Eighth Avenues instead of a new entrance along Eighth Avenue, which the agency argues is already served by Moynihan Train Hall. New York Governor's Office

All in, the MTA’s proposal was estimated to cost $5.45 billion in 2020, a price tag that’s been pushed to $7.1 billion by inflation, the agency has said.

Dolan has fiercely opposed the MTA’s plan and claims it could interrupt operations at the MSG, potentially forcing the Knicks and Rangers to play elsewhere.

His company has provided engineering support and other assistance for ASTM’s proposal, which MTA insiders have viewed as a stalking horse to score a large property payout from demolishing the Hulu.

Government watchdog groups have flagged Foye’s involvement as a likely violation of state regulations that bar him from any interactions with his former agency for two years and impose a lifetime ban on matters he was personally involved with.

“Our focus is on delivering critical transportation benefits for the best possible value,” MTA spokeswoman Meghan Keegan said when asked about the analysis.

“A competitive process will ensure that.”

ASTM declined to comment.

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