Hochul donor in line for $1.2B tax break in Penn Station overhaul plan: watchdog
A company headed by a big donor to Gov. Kathy Hochul is in line for up to $1.2 billion in tax breaks under her opaque plan to overhaul Penn Station — even though that plan might be billions short of the $7.5 billion to $10 billion needed to make it happen, a government watchdog charges.
The scathing report comes as legislators call for Hochul to restore oversight powers for such projects that were taken away by ex-Gov. Andrew Cuomo.
The report released Tuesday by Reinvent Albany charges that the governor is pushing a sweetheart deal with Vornado Realty Trust – led by billionaire chairman Steven Roth – even though her overall plan to transform the aging transit hub might be billions short.
“The state has not made public the necessary information to determine if the [financing plan] can be successful, including projections of costs and revenues,” reads the report.
Hochul’s plan to overhaul and expand Penn Station, along with helping to fund new tunnels across the Hudson River, would give Vornado tax breaks to construct new buildings around the transit hub. Vornado’s discounted tax payments would hypothetically pay off debt the state would take on to finance the station work.
But Empire State Development, which is overseeing the project on behalf of Hochul, has yet to release details that would prove that the financing scheme would actually work.
“If there were, you know, some difficulty with servicing debt, like I said, we would look towards some of these interest support tools to provide those payments,” Hope Knight, who leads ESD, told state lawmakers last month when asked whether taxpayers might end up on the hook for billions in future debt.
Roth donated $69,700 to Hochul’s campaign weeks after she became governor following the resignation of the scandal-plagued Cuomo, according to campaign finance records.
“We reject any implication that political donations have influence on government decisions,” Hochul spokeswoman Hazel Crampton-Hays said in an email.
State lawmakers are calling on Hochul to sign into law legislation that would give them more power on the Public Authorities Control Board, a state body that thwarted efforts by Cuomo to help Amazon build a satellite HQ in Queens in 2019.
Cuomo later strong-armed lawmakers to effectively give up their ability to veto future projects. Hochul would not commit to restoring such power to lawmakers when asked by a reporter Tuesday.
“I’ll simply point out they passed a law that everyone’s complaining about” she said.
ESD has scheduled a July 30 vote that could move the project forward despite ongoing criticism about project financing highlighted by the Reinvent Albany report
“Since ESD was refused a copy of the report prior to its release, it’s difficult to comment on its accuracy,” ESD spokesman Matthew Gorton said in an email.
“It’s disappointing that an organization that considers itself a citizens’ watchdog would prefer Penn Station remain a junkyard, denying New Yorkers the significant affordable housing, open space and desperately needed transit improvements this plan provides,” he added.
