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Deals & Dealmakers

Boston Properties says no thanks to Penn Station

In spite of strong interest for the $3 billion redevelopment of Penn Station and the James A. Farley Post Office among the city’s top real estate firms, Boston Properties did not heed a request for proposals on the project because it was “very complex.”

During an earnings call last week, John Powers, Boston Properties’ senior vice president and regional manager, said that his company had no intention of bidding on the project.
The RFP, which expired on April 22, inspired interest among the city’s largest real estate players, including Extell Development, Tishman Speyer, Silverstein Properties and Brookfield Property Partners.

“We’re not bidding on the Penn Station redevelopment. We looked at it carefully,” Powers said. “It’s very complex, both of them are very complex. Penn is primarily exclusively a retail play and Farley has a combination of retail, probably some hotel and office, but it’s very complex. We analyzed carefully and decided not to participate.”

Governor Andrew Cuomo opened the 90-day bidding process last January, promising that a reworked Penn Station “would be the heart of an entirely new transit system.”

The plan involved connecting Penn Station to the Farley Post Office across the street while leaving Madison Square Garden at its current location on top of the transit hub.

“Penn Station is the heart of New York’s economy and transportation network, but it has been outdated, overcrowded, and unworthy of the Empire State for far too long,” Cuomo said last January.

“We want to build Penn Station to be better than it ever was, and that is exactly what we are going to do.”
According to Cuomo’s plan, the redeveloped version of Penn Station would be renamed Empire Station Complex. The Farley Post Office portion of the structure will contain retail space and a passenger waiting area.

The plan revives a long-dormant effort to restore the structure to the heights of its beauty. The structure’s demolition happened from 1963 to 1966. This was so egregious that it led to the creation of the Landmarks Preservation Commission.
During the ‘90s, a push to rehabilitate the structure was led by Sen. Daniel Moynihan.

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