Turns out the wind was blowing from Vornado Realty Trust’s powerful head, Gov. Kathy Hochul’s plan to sew New office skyscrapers in the Penn Station area On Tuesday, Chief Executive Steven Roth said the timing was not right for a major new development.
Publicly traded Vornado West owns most of the 10 sites slated for the 30s. large-scale reconstruction. Roth made the shocking retreat on an investor conference call on Tuesday. After noting the improvements Vornado had made to the buildings near the station it already owned, he appeared to have called a halt to any new ones.
“I have to say that the winds that are happening in the current environment are not favorable at all for surface development,” Roth said.
“It’s not something we’re going to get into right now,” he said when asked if that meant he would change or scale back the state-approved plan for the Penn Station neighborhood. Apparently he meant that he was not ready to discuss the matter.
But Evercore ISI analyst Steve Sakwa told Crain’s that Roth’s statement means the project is “definitely delayed” due to a lack of office demand. “They are not going to spend billions to build an empty building,” he said.
Roth’s withdrawal doesn’t mean the massive Penn District project is dead, as Vornado couldn’t begin construction for several years anyway.
Although the proposal for 18 million square feet of new buildings has been approved by the state’s Public Authority Review Board, it still faces a number of environmental and other reviews. At least three lawsuits were recently filed to block the scheme.
Still, Roth’s statement overshadowed a controversial proposal to redevelop the Penn district, which would require wholesale relocation of residents and businesses to make room for new towers that would cut into revenues to pay for a new Penn Station. Vornado was credited as the driving force behind the plan, which was blessed by Hochul and his predecessor, Andrew Cuomo. Roth donated heavily to both governors.
Critics say the Penn project would give Vornado tax breaks and enrich the company without providing enough guarantees to build a new train station, which is the main reason for the project.
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