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Cuomo considers reset for Penn station project

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Governor Andrew M Cuomo is considering a bold move to restart the long-stalled plan to transform Midtown Manhattan's blocklong general post office into a US$900 million transit and commercial hub for Pennsylvania Station: jettisoning the developers, Related Cos and Vornado Realty.

[NEW YORK] Governor Andrew M Cuomo is considering a bold move to restart the long-stalled plan to transform Midtown Manhattan's blocklong general post office into a US$900 million transit and commercial hub for Pennsylvania Station: jettisoning the developers, Related Cos and Vornado Realty.

The developers, selected for the project known as Moynihan Station in 2005, tried twice to move Madison Square Garden into the James A Farley Post Office. They also failed in attempts to lure a community college and CBS to the post office, which is across Eighth Avenue from the Garden and Penn Station.

This year, the developers promised state officials impatient with the lack of progress that they would finally close on the deal without a tenant.

Despite what both sides say was progress on the price, totalling hundreds of millions of dollars, state officials told the developers at a meeting last Thursday that the state was tired of waiting and was considering replacing Related and Vornado.

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The shocked developers were loath to talk about it, for fear of antagonising the governor and jeopardising a project they still hope to salvage. State officials have also been tight-lipped. But word of the state's action has circulated among real estate executives and elected officials, including the project's most consistent proponent, Senator Chuck Schumer.

Many wondered whether the governor had adopted a tough stance to spur the developers into action on the project.

Kay Sarlin Wright, a spokeswoman for the state's economic development agency, was terse and stopped well short of expressing support for the developers. "The state is considering a number of different development scenarios, and no decisions have been made," she said.

The Cuomo administration is eager to fix Penn Station, the busiest station in North America, expand the terminal's capacity and build a new rail tunnel underneath the Hudson River.

Although the deal with the developers has not closed in 10 years, any action to remove the developers would come with consequences. Under the terms of their agreement, the state would be required to reimburse the developers for US$30 million in expenses. The state would also be barred from soliciting new developers for a year, unless Related and Vornado agree.

But state officials insist there would be no delays if Related and Vornado were eventually ousted. "There will be no delay of a year," said John PL Kelly, a spokesman for Mr Cuomo. "This governor is about advancing stalled projects, not continuing the status quo."

Perhaps with an eye toward an announcement at the governor's State of the State speech in January, state officials are considering a Plan B, including reviving the idea of moving the 5,600-seat theater beneath Madison Square Garden across Eighth Avenue to the post office, according to two executives who spoke on the condition of anonymity because they did not want to become embroiled in the dispute. That would allow for an expansion of Penn Station and new entrances on Eighth Avenue.

NYT

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