(rshsdepot) Penn Station, NY

[Bernie Wagenblast <brwagenblast_@_comcast.net>]

Is Penn Station Being Stalled? Moynihan Back
by Tom McGeveran



On April 1, while in his offices at the Woodrow Wilson Center in Washington,
D.C., former Senator Daniel Patrick Moynihan received a phone call from
Mayor Michael Bloomberg. The topic was close to Mr. Moynihan's heart, and
now it's close to Mr. Bloomberg's: the redevelopment of Pennsylvania
Station, and its expansion into the James A. Farley General Post Office.

Would the former Senator like to leap back into the project?

You bet.

When he still was in office and monitoring the project's progress, Mr.
Moynihan was known to describe the restoration as "a fat dolphin swimming in
a sea of sharks." It served as a gentle admonition that the longer the
project languished, the greater the chance of unacceptable or unworthy
deviations from Mr. Moynihan's vision for a new temple of transportation on
Eighth Avenue.

It has languished long indeed-for 10 years-and the compromises have been
substantial. But it is not into a sea of sharks that Mr. Moynihan will be
wading now that he has agreed to be Mr. Bloomberg's appointee to the
Pennsylvania Station Redevelopment Corporation's board. According to sources
with knowledge of the deal, the mood on the board is cautiously optimistic.

"There are still a couple of hurdles," said one source close to the talks.
But several others close to the deal predict that a final agreement between
the U.S. Postal Service-the last party left to sign onto the $788 million
deal-and the PSRC is only weeks away. The Postal Service is due to move most
of its operations out of the building, allowing for its conversion into a
rail gateway.

There is still much to be done. The PSRC itself isn't ready to bank on the
deal going through-the agency has yet to float $155 million in bonds
guaranteed against income from leases in the planned retail concourse of the
new station. It had been nearly a year since Governor George Pataki signed a
state law authorizing the bond issue, which already has gotten a favorable
preliminary rating from Standard and Poor's. In reply to a question about
the delay in issuing bonds, the PSRC offered a terse statement through a
spokesperson: "We will continue to work with the Postal Service to ensure
that Governor Pataki's vision for a commuter-friendly, state-of-the-art Penn
Station is built at the current site of the Farley Post Office." The
protocol of election-year politics apparently has shifted paternity of the
Penn Station renovation.

Meanwhile, architects at Skidmore, Owings & Merrill have been biding their
time after creating an award-winning design that mirrors the classic train
stations of Europe's world capitals, with a large bow of glass and steel
that will direct dappled light onto a ticketing and retail concourse. Those
ambitious plans have taken on a heightened significance since Sept. 11, when
New York's resurgence became not just a rallying cry for the civic-minded,
but a brutal necessity for the city's future.

It was around the time of the terrorist attack that the project seemed to
suffer its greatest blow. A Sept. 21 letter from the Postal Service's vice
president for facilities, Rudy Umscheid, to the RSDC seemed to say the deal
was off entirely.

Charles Gargano, chief of the Empire State Redevelopment Corporation, leaked
news of the Postal Service's apparent change of heart to the editorial board
of the Daily News. A week later, on Oct. 11, Mr. Gargano accompanied Mr.
Pataki to the White House to discuss ways the federal government could
assist in rebuilding New York. The two emphasized the importance of the Penn
Station project and, many say, asked the White House to put pressure on the
Postal Service to come back to the table.

The next day, Mr. Umscheid sent a letter to Kevin Corbett of the ESDC. "The
Postal Service recognizes that this may be a unique opportunity to advance
the project,"  Mr. Umscheid wrote. "We are prepared to negotiate in good
faith."

But nearly six months later, there is still no deal.

Meanwhile, half a million rail passengers a day still make their way through
the dimly lit, narrow and low-ceilinged tunnels under Madison Square Garden,
that joyless drum of ochre stucco looming over Seventh Avenue. Until the
Postal Service finally gives its approval to the project, New York's Amtrak
portal will continue to have all the charm and grace of an unfinished
basement.

The deal that had been on the table before Sept. 11 already was altered to
meet the Postal Service's demands. The PSRC would buy the huge,
white-columned building on Eighth Avenue between 31st and 33rd streets from
the Postal Service for $140 million. A third of the space-more than was
envisioned-would be leased back to the Postal Service for a nominal sum for
15 years, after which the Postal Service would have had to find a new home
for its Farley operations.

Parties to the deal expected those terms to be agreed upon by March of last
year, guaranteeing that money set aside for the project in a complex
financial scheme arranged by former PSRC president Alexandros Washburn would
still be in place.

But last year was horrendous for the Postal Service. Declining revenues had
forced the agency into a round of belt-tightening that included a freeze on
large-scale capital projects-including the move out of the Farley Post
Office. When the Sept. 11 terror attack damaged the Postal Service's Church
Street processing facility, the Farley Post Office was commandeered to pick
up the slack. With anthrax scares gripping the country through much of
October, a heightened advertising recession and a slackening economy, the
Post Office came in $521 million under its projections. Overall mail volume
dropped some 2.8 billion pieces below the same period in 2000, the single
largest quarterly mail-volume decline in recent history.

"We are dealing with a lot of financial challenges within the Post Office,"
Postal Service spokeswoman Diane Todd told The Observer. "We're going to
look at the agreement that's being drafted up right now .. The Postal
Service is working closely with all of the involved parties to come to some
resolution with this whole project."

Ms. Todd would not say what part of the earlier deal had become a sticking
point in the negotiations. But according to sources on Capitol Hill who have
been watching the negotiations closely, disputes over the cost of the Postal
Service's refurbished offices in the Farley building and the terms of its
lease on a portion of the building, as well as over who will be responsible
for finding a new home for the Postal Service's main midtown office, have
occupied negotiators over the last six months.

A Common Enemy

They've been close to a deal before, of course. If the project has been
stalled in the past for garden-variety reasons-bureaucratic tangles;
internecine squabbles between federal agencies like Amtrak and the Governor'
s office; hostility from members of Congress, who are generally loathe to
support a civic Taj Mahal on the Hudson-now everyone appears to be arrayed
against a single foe: the U.S. Postal Service.

Mayor Bloomberg had personally lobbied the President to push the Postal
Service to make a deal with PSRC before his election. The President has been
seen as a likely source of support now, given his friendly relationship with
Governor Pataki, especially since Sept. 11. And the pressure to close the
deal has only increased since that fateful day. New York's Congressional
delegation finds itself defending a decade-long project before
appropriations committees and federal agencies already chafing under the
pile of requests for funding that have come in from the city since the
terrorist attack.

"We've made sure that the federal dollars are there, and it is imperative
that the project go ahead as soon as possible for the safety and economic
development of the city," said Karen Dunn, spokeswoman for Senator Hillary
Clinton.

The mood is more defiant at Senator Charles Schumer's office.

"The Congress has taken every conceivable step to provide the funding the
Post Office needs to recover from 9/11, to deal with any costs related to
moving and making way for the new Penn Station," said Mr. Schumer's chief of
staff, Bradley Tusk. "There's no excuse. This should be happening
immediately."

It's a problem Mr. Moynihan remembers well.

"They have everything in place: They have the site, they have a great
design, they have the money-we cobbled together $800 million," he said. "The
problem is nothing more or less than that money migrates. It disappears. You
have it one day and you don't spend it, and you look up and it's not there
anymore."

Indeed. On March 14, a $240 million loan agreement with the Department of
Transportation expired; in two weeks, members of New York's Congressional
delegation will once again have to defend a $20 million appropriation that
has not been spent since it first appeared in their requests for fiscal year
1998. Last year, an appropriations subcommittee cut $40 million from the
project.

There are political concerns, too. Mr. Pataki, who has taken a leading role
in the development of civic projects in New York City, from a redeveloped
Penn Station to the Hudson River waterfront park to the privatization of the
World Trade Center, now will have to bear the scrutiny for those projects:
one stillborn, another half-complete and the last reduced to rubble. A
reversal of fortune on the Penn Station project could reverse that
perception and persuade New Yorkers that progress is possible.

But that will require cooperation from the Postal Service. The longer that
takes, the more morale sinks among the parties trying to keep the deal from
the sharks.

"Our biggest fear is that we keep getting these advance appropriations and
they're not using it," said one Capitol Hill staffer. "We're being put in a
very awkward position, because we're using a lot of political capital to
make this happen."

You may reach Tom McGeveran via email at: tmcgeveran_@_observer.com.


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The Railroad Station Historical Society maintains a database of existing
railroad structures at: http://www.rrshs.org

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